Question 1

Explain why the discussion about the former Soviet Union illustrates the importance of providing adequate incentives to enable technological change.

Accepted Answer

If people do not have an incentive to in

Question 2

The growth accounting formula was developed by

Accepted Answer

A) Adam Smith. 
B) Thomas Carlyle. 
C) Robert Malthus. 
D) Joseph Schumpeter. 
E) Robert Solow. 
A) Adam Smith. 
B) Thomas Carlyle. 
C) Robert Malthus. 
D) Joseph Schumpeter. 
E) Robert Solow.

Question 3

Prior to 1800, productivity growth averaged

Accepted Answer

A) 1 percent per year. 
B) 0 percent per year. 
C) .5 percent per year. 
D) 3 percent per year. 
E) 2 percent per year. 
A) 1 percent per year. 
B) 0 percent per year. 
C) .5 percent per year. 
D) 3 percent per year. 
E) 2 percent per year.

Question 4

Technology is

Accepted Answer

A) anything that will enable a given amount of capital and labor to produce more output. 
B) another name for capital. 
C) another name for productivity. 
D) any type of invention. 
E) the application of science to production. 
A) anything that will enable a given amount of capital and labor to produce more output. 
B) another name for capital. 
C) another name for productivity. 
D) any type of invention. 
E) the application of science to production.

Question 5

If the growth rate of capital per hour of work is 3 percent over a given period of time and the growth rate of technology is 2 percent, then, based on Solow's growth accounting formula, the growth rate of real GDP per hour of work will be

Accepted Answer

A) 3.67 percent. 
B) 2.33 percent. 
C) 1.33 percent. 
D) 1 percent. 
E) 3 percent. 
A) 3.67 percent. 
B) 2.33 percent. 
C) 1.33 percent. 
D) 1 percent. 
E) 3 percent.

Question 6

Which part of technological change best refers to how technology affects growth throughout the economy?

Accepted Answer

A) The spread of the discovery of new knowledge 
B) The spread of the application of new knowledge 
C) The discovery of new knowledge 
D) The accumulation of scientific knowledge 
E) The application of new knowledge 
A) The spread of the discovery of new knowledge 
B) The spread of the application of new knowledge 
C) The discovery of new knowledge 
D) The accumulation of scientific knowledge 
E) The application of new knowledge

Question 7

Which of the following statements is true about an economy whose production function includes only capital and labor?

Accepted Answer

A) Diminishing returns to capital can occur for the economy as a whole. 
B) Adding more capital per worker cannot raise real GDP beyond some limit. 
C) The production function yields a pessimistic conclusion about economic growth. 
D) To get to the point where the return from an additional unit of capital equals zero requires an extremely large investment share of GDP. 
E) All of these 
A) Diminishing returns to capital can occur for the economy as a whole. 
B) Adding more capital per worker cannot raise real GDP beyond some limit. 
C) The production function yields a pessimistic conclusion about economic growth. 
D) To get to the point where the return from an additional unit of capital equals zero requires an extremely large investment share of GDP. 
E) All of these

Question 8

Capital is not subject to diminishing returns.

Accepted Answer

A) True 
 B)False

Question 9

What test should be performed to determine whether the government should engage in policies that affect economic growth?

Accepted Answer

The test involves answering two question

Question 10

John Nash developed the growth accounting formula and received the Nobel Prize in economics for his significant contribution.

Accepted Answer

A) True 
 B)False

Question 11

Suppose two separate growth-accounting studies between 1980 and 2010 differ on the relative importance of the contributions of capital formation and technological change to growth in productivity. That is, one study argues that technological change has been relatively more important than capital stock growth in contributing to productivity growth, while the second study argues the opposite. How would you reconcile these two studies? (Hint: What did the discussion in the text about the Thompson bagel machine illustrate?)

Accepted Answer

The growth rate of technology is what is

Question 12

The more excludable an innovation is, the less chance of a spillover.

Accepted Answer

A) True 
 B)False

Question 13

An increase in capital per hour of work results in

Accepted Answer

A) an upward shift of the productivity curve. 
B) a downward shift of the productivity curve. 
C) an upward and right movement along the productivity curve. 
D) a downward and left movement along the productivity curve. 
E) a clockwise rotation of the productivity curve. 
A) an upward shift of the productivity curve. 
B) a downward shift of the productivity curve. 
C) an upward and right movement along the productivity curve. 
D) a downward and left movement along the productivity curve. 
E) a clockwise rotation of the productivity curve.

Question 14

Which of the following has not been proposed by mainstream economists as a policy measure to encourage productivity growth?

Accepted Answer

A) Stimulating technology by subsidizing research 
B) Keeping taxes on investment low 
C) Erecting quotas on foreign goods that are technologically advanced 
D) All of the above have commonly been suggested. 
E) None of the above have commonly been suggested. 
A) Stimulating technology by subsidizing research 
B) Keeping taxes on investment low 
C) Erecting quotas on foreign goods that are technologically advanced 
D) All of the above have commonly been suggested. 
E) None of the above have commonly been suggested.

Question 15

Which of the following best describes what occurs when time and resources are allocated to educate and train the labor force?

Accepted Answer

A) Human capital is produced. 
B) Increased specialization is enabled. 
C) Firms will be reorganized. 
D) There will be more inventions. 
E) There is learning by doing. 
A) Human capital is produced. 
B) Increased specialization is enabled. 
C) Firms will be reorganized. 
D) There will be more inventions. 
E) There is learning by doing.

Question 16

Increasing the stock of capital enables more output to be produced.

Accepted Answer

A) True 
 B)False

Question 17

Requiring workers to work on weekends and holidays is an example of

Accepted Answer

A) labor-saving technological change. 
B) creative destruction. 
C) capital-saving technological change. 
D) an invention. 
E) diffusion. 
A) labor-saving technological change. 
B) creative destruction. 
C) capital-saving technological change. 
D) an invention. 
E) diffusion.

Question 18

Which of the following is true?

Accepted Answer

A) Economic growth began to accelerate during the Industrial Revolution. 
B) There has always been economic growth. 
C) Economic growth rates were highest during the Industrial Revolution. 
D) All of these 
E) The best measure of economic growth is the growth rate of output. 
A) Economic growth began to accelerate during the Industrial Revolution. 
B) There has always been economic growth. 
C) Economic growth rates were highest during the Industrial Revolution. 
D) All of these 
E) The best measure of economic growth is the growth rate of output.

Question 19

Nonrivalry means that

Accepted Answer

A) the owner of a good cannot prevent others from using the good. 
B) the use of a good by one individual does not preclude its use by others at the same time. 
C) a good cannot be exchanged in a market transaction. 
D) a good can be exchanged in a market transaction. 
E) a produced good will not be profitable. 
A) the owner of a good cannot prevent others from using the good. 
B) the use of a good by one individual does not preclude its use by others at the same time. 
C) a good cannot be exchanged in a market transaction. 
D) a good can be exchanged in a market transaction. 
E) a produced good will not be profitable.

Question 20

The education and training of workers is referred to as learning by doing.

Accepted Answer

A) True 
 B)False

Exam 21: Productivity and Economic Growth

Explain why the discussion about the former Soviet Union illustrates the importance of providing adequate incentives to enable technological change.

The growth accounting formula was developed by

Prior to 1800, productivity growth averaged

Technology is

If the growth rate of capital per hour of work is 3 percent over a given period of time and the growth rate of technology is 2 percent, then, based on Solow's growth accounting formula, the growth rate of real GDP per hour of work will be

Which part of technological change best refers to how technology affects growth throughout the economy?

Which of the following statements is true about an economy whose production function includes only capital and labor?

Capital is not subject to diminishing returns.

What test should be performed to determine whether the government should engage in policies that affect economic growth?

John Nash developed the growth accounting formula and received the Nobel Prize in economics for his significant contribution.

The more excludable an innovation is, the less chance of a spillover.

An increase in capital per hour of work results in

Which of the following has not been proposed by mainstream economists as a policy measure to encourage productivity growth?

Which of the following best describes what occurs when time and resources are allocated to educate and train the labor force?

Increasing the stock of capital enables more output to be produced.

Requiring workers to work on weekends and holidays is an example of

Which of the following is true?

Nonrivalry means that

The education and training of workers is referred to as learning by doing.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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