Question 1

An economy growing at a steady rate of 3.5 percent per year doubles in size approximately every __________ years.

Accepted Answer

A)  40 
B)  20 
C)  28.6 
D)  16 
A)  40 
B)  20 
C)  28.6 
D)  16 B

Question 2

A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year,it doubles in size approximately every __________ years.

Accepted Answer

A)  70 - Z 
B)  70/Z 
C)  Z/70 
D)  70 * (Z/100) 
A)  70 - Z 
B)  70/Z 
C)  Z/70 
D)  70 * (Z/100) B

Question 3

Economists Barro and McCleary's research regarding the impact of religious beliefs on economic growth noted that a belief in hell matters more to economic growth than the belief in heaven.

Accepted Answer

A) True 
 B)False  True

Question 4

Exhibit 17-3

-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the technology coefficient,there would be a ______________________ which would shift the LRAS curve from LRAS1 to _______________ resulting in _______________..

Accepted Answer

A)  movement along the production function to point C; LRAS2; economic growth 
B)  shift upward of the production function to point B; LRAS2; economic growth 
C)  movement along the production function to point C; LRAS3; a shrinking economy 
D)  shift upward of the production function to point B; LRAS3; a shrinking economy 
A)  movement along the production function to point C; LRAS2; economic growth 
B)  shift upward of the production function to point B; LRAS2; economic growth 
C)  movement along the production function to point C; LRAS3; a shrinking economy 
D)  shift upward of the production function to point B; LRAS3; a shrinking economy

Question 5

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect harder work under the __________ system and less risk taking under the __________ system.

Accepted Answer

A)  former; former 
B)  former; latter 
C)  latter; former 
D)  latter; latter 
A)  former; former 
B)  former; latter 
C)  latter; former 
D)  latter; latter

Question 6

Using the production function Real GDP = T (L,K),and the LRAS curve,describe the process by which a decline in taxes on the returns to capital impacts economic growth.

Accepted Answer

Lower taxes on the returns to capital wi

Question 7

Meta-ideas involve

Accepted Answer

A)  the methods of producing ideas. 
B)  persuading others of the validity of one's ideas. 
C)  putting ideas in a form capable of approval in a "yes" or "no" vote. 
D)  the expression of ideas in mathematical form. 
A)  the methods of producing ideas. 
B)  persuading others of the validity of one's ideas. 
C)  putting ideas in a form capable of approval in a "yes" or "no" vote. 
D)  the expression of ideas in mathematical form.

Question 8

Production functions used in economic growth theory are always limited to two inputs: labor and capital.

Accepted Answer

A) True 
 B)False

Question 9

_______________________ specifies the relation between technology and the factor inputs to output.

Accepted Answer

A)  Neoclassical growth theory 
B)  Meta-ideas 
C)  The LRAS curve 
D)  A production function 
A)  Neoclassical growth theory 
B)  Meta-ideas 
C)  The LRAS curve 
D)  A production function

Question 10

Exhibit 17-3

-Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the quantity of labor,there would be a ______________________ which would shift the LRAS curve from LRAS1to _______________ resulting in _______________..

Accepted Answer

A)  movement along the production function to point C; LRAS2; economic growth 
B)  shifting upward of the production function to point B; LRAS2; economic growth 
C)  movement along the production function to point C; LRAS3; a shrinking economy 
D)  shifting upward of the production function to point B; LRAS3; a shrinking economy 
A)  movement along the production function to point C; LRAS2; economic growth 
B)  shifting upward of the production function to point B; LRAS2; economic growth 
C)  movement along the production function to point C; LRAS3; a shrinking economy 
D)  shifting upward of the production function to point B; LRAS3; a shrinking economy

Question 11

In contrast to neoclassical growth theory,new growth theory lays more emphasis on

Accepted Answer

A)  intangibles than tangibles. 
B)  tangibles than intangibles. 
C)  changes in the money supply than changes in taxes. 
D)  fiscal policy than monetary policy. 
E)  objects than ideas. 
A)  intangibles than tangibles. 
B)  tangibles than intangibles. 
C)  changes in the money supply than changes in taxes. 
D)  fiscal policy than monetary policy. 
E)  objects than ideas.

Question 12

If the annual growth rate in Real GDP is 2 percent,then it will take 50 years for the economy to double in size.

Accepted Answer

A) True 
 B)False

Question 13

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________,and a rise in the technology coefficient __________________.

Accepted Answer

A)  shifts the production function upward; also shifts the production function upward 
B)  moves us up along a given production function; shifts the production function upward 
C)  shifts the production function downward; shifts the production function upward 
D)  shifts the production function upward; moves us up along a given production function 
A)  shifts the production function upward; also shifts the production function upward 
B)  moves us up along a given production function; shifts the production function upward 
C)  shifts the production function downward; shifts the production function upward 
D)  shifts the production function upward; moves us up along a given production function

Question 14

Stan Laurel and Oliver Hardy acted separately in comedy shorts for the Hal Roach Studio for over a decade without greatly distinguishing themselves from hundreds of other screen comedians.Then in 1927,Roach writer-director Leo McCarey tried them out as a comedy team in one more routine short.Only then was the fantastic chemistry between "the fiddle and the bow" realized.The rest is immortality.This story relates to the "new growth theory" idea of

Accepted Answer

A)  employee involvement. 
B)  rearranging. 
C)  exogeneity. 
D)  objects and ideas. 
A)  employee involvement. 
B)  rearranging. 
C)  exogeneity. 
D)  objects and ideas.

Question 15

New growth theory puts emphasis on

Accepted Answer

A)  ideas. 
B)  experimenting with new ways of doing things. 
C)  rearranging resources in ways that are more valuable. 
D)  b and c 
E)  a, b, and c 
A)  ideas. 
B)  experimenting with new ways of doing things. 
C)  rearranging resources in ways that are more valuable. 
D)  b and c 
E)  a, b, and c

Question 16

Exhibit 17-1
Production Function
Real GDP = T (L, K), such that Real GDP = T(L + K)
Assume that the technology coefficient is equal to 0.50.
-Refer to Exhibit 17-1. If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,and labor rises from 6 units to 7 units it would cause a

Accepted Answer

A)  shift upward in the production function to a higher level of Real GDP. 
B)  shift downward in the production function to a lower level of Real GDP. 
C)  movement down along the same production function to a lower level of Real GDP. 
D)  movement up along the same production function to a higher level of Real GDP. 
A)  shift upward in the production function to a higher level of Real GDP. 
B)  shift downward in the production function to a lower level of Real GDP. 
C)  movement down along the same production function to a lower level of Real GDP. 
D)  movement up along the same production function to a higher level of Real GDP.

Question 17

According to new growth theory,technological advances can be promoted

Accepted Answer

A)  from within the economy. 
B)  if only the right fiscal and monetary policies are in place. 
C)  in a few rare cases. 
D)  through industrial policy. 
E)  none of the above 
A)  from within the economy. 
B)  if only the right fiscal and monetary policies are in place. 
C)  in a few rare cases. 
D)  through industrial policy. 
E)  none of the above

Question 18

If an economy can increase its steady annual growth rate from 2 percent to 3.5 percent,this reduces the time it takes for the economy to double in size by __________ years.

Accepted Answer

A)  5 
B)  8 
C)  10 
D)  15 
E)  20 
A)  5 
B)  8 
C)  10 
D)  15 
E)  20

Question 19

"Absolute real economic growth" is defined as an increase in __________ from one period to the next.

Accepted Answer

A)  GDP 
B)  Real GDP 
C)  Real GDP per person 
D)  the inflation rate 
A)  GDP 
B)  Real GDP 
C)  Real GDP per person 
D)  the inflation rate

Question 20

New growth theory holds that technology is __________ and that the more resources that go to develop technology,the __________ technology that is produced.

Accepted Answer

A)  exogenous; more and better 
B)  exogenous; less 
C)  endogenous; more and better 
D)  endogenous; less 
A)  exogenous; more and better 
B)  exogenous; less 
C)  endogenous; more and better 
D)  endogenous; less

Exam 17: Economic Growth: Resources, Technology, Ideas, and Institutions

An economy growing at a steady rate of 3.5 percent per year doubles in size approximately every __________ years.

A useful rule of thumb called the "Rule of 70" states that if something grows at a constant rate of Z percent per year,it doubles in size approximately every __________ years.

Economists Barro and McCleary's research regarding the impact of religious beliefs on economic growth noted that a belief in hell matters more to economic growth than the belief in heaven.

Exhibit 17-3 -Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the technology coefficient,there would be a ______________________ which would shift the LRAS curve from LRAS1 to _______________ resulting in _______________..

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect harder work under the __________ system and less risk taking under the __________ system.

Using the production function Real GDP = T (L,K),and the LRAS curve,describe the process by which a decline in taxes on the returns to capital impacts economic growth.

Meta-ideas involve

Production functions used in economic growth theory are always limited to two inputs: labor and capital.

_______________________ specifies the relation between technology and the factor inputs to output.

Exhibit 17-3 -Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the quantity of labor,there would be a ______________________ which would shift the LRAS curve from LRAS1to _______________ resulting in _______________..

In contrast to neoclassical growth theory,new growth theory lays more emphasis on

If the annual growth rate in Real GDP is 2 percent,then it will take 50 years for the economy to double in size.

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ________________________,and a rise in the technology coefficient __________________.

New growth theory puts emphasis on

According to new growth theory,technological advances can be promoted

If an economy can increase its steady annual growth rate from 2 percent to 3.5 percent,this reduces the time it takes for the economy to double in size by __________ years.

"Absolute real economic growth" is defined as an increase in __________ from one period to the next.

New growth theory holds that technology is __________ and that the more resources that go to develop technology,the __________ technology that is produced.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, Controlled, and Relative

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

Exhibit 17-3 -Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the technology coefficient,there would be a ______________ which would shift the LRAS curve from LRAS₁ to _ resulting in _________..

Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds.We should expect harder work under the system and less risk taking under the system.

Exhibit 17-3 -Refer to Exhibit 17-3 Assume that the starting point on the production function is point A. After an increase in the quantity of labor,there would be a ______________ which would shift the LRAS curve from LRAS₁to _ resulting in _________..

When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis,a rise in labor ______,and a rise in the technology coefficient .

New growth theory holds that technology is and that the more resources that go to develop technology,the technology that is produced.