Question 1

Because the United States is a developed economy, every other country is catching up to the level of
U.S. real GDP per person.

Accepted Answer

A) True 
 B)False

Question 2

-As a result of the rightward shift in the demand curve for labor from LD0 to LD1, the equilibrium level of employment and potential GDP .

Accepted Answer

A)  decreases; increases 
B)  decreases; decreases 
C)  increases; increases 
D)  increases; decreases 
A)  decreases; increases 
B)  decreases; decreases 
C)  increases; increases 
D)  increases; decreases

Question 3

To achieve faster growth, one possibility is to tax

Accepted Answer

A)  immigration. 
B)  saving. 
C)  hiring. 
D)  consumption. 
A)  immigration. 
B)  saving. 
C)  hiring. 
D)  consumption.

Question 4

According to new growth theory .

Accepted Answer

A)  knowledge does not experience diminishing returns 
B)  ever- advancing productivity keeps the population growth rate high 
C)  knowledge is subject to the law of diminishing returns 
D)  growth rates and income levels per person around the globe will converge 
A)  knowledge does not experience diminishing returns 
B)  ever- advancing productivity keeps the population growth rate high 
C)  knowledge is subject to the law of diminishing returns 
D)  growth rates and income levels per person around the globe will converge

Question 5

At the full- employment equilibrium in the labor market,

Accepted Answer

A)  there is no unemployment. 
B)  there are no job vacancies. 
C)  the money wage rate equals the real wage rate. 
D)  there is neither a shortage nor a surplus of labor. 
A)  there is no unemployment. 
B)  there are no job vacancies. 
C)  the money wage rate equals the real wage rate. 
D)  there is neither a shortage nor a surplus of labor.

Question 6

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT associated with the new growth theory?

Accepted Answer

A)  technology 
B)  research 
C)  natural resources 
D)  innovation 
A)  technology 
B)  research 
C)  natural resources 
D)  innovation

Question 8

Most is embodied in physical capital.

Accepted Answer

A)  human capital 
B)  labor productivity 
C)  technological change 
D)  economic growth 
A)  human capital 
B)  labor productivity 
C)  technological change 
D)  economic growth

Question 9

Classical growth theory assumes that

Accepted Answer

A)  there are no diminishing returns to capital. 
B)  population increases when wage rates are above subsistence levels. 
C)  when interest rates increase, savings and investment both increase. 
D)  there are increasing returns to capital. 
A)  there are no diminishing returns to capital. 
B)  population increases when wage rates are above subsistence levels. 
C)  when interest rates increase, savings and investment both increase. 
D)  there are increasing returns to capital.

Question 10

The purpose of growth accounting is to determine

Accepted Answer

A)  how rapidly the capital stock grows. 
B)  how much of GDP growth is a result of increases in capital, how much is the result of increase in labor, and how much is the result of increases in technology. 
C)  the most accurate ways of measuring depreciation. 
D)  how rapidly GDP grows. 
A)  how rapidly the capital stock grows. 
B)  how much of GDP growth is a result of increases in capital, how much is the result of increase in labor, and how much is the result of increases in technology. 
C)  the most accurate ways of measuring depreciation. 
D)  how rapidly GDP grows.

Question 11

A decrease in the real wage rate

Accepted Answer

A)  shifts the labor supply curve leftward. 
B)  shifts the labor demand curve leftward. 
C)  shifts the labor demand curve rightward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve. 
A)  shifts the labor supply curve leftward. 
B)  shifts the labor demand curve leftward. 
C)  shifts the labor demand curve rightward. 
D)  none of the above because a change in the real wage rate does not shift either the labor demand or labor supply curve.

Question 12

The table below shows data for China.   The economic growth rate in China between 2000 and 2003 was percent.

Accepted Answer

A)  98 
B)  1.97 
C)  30 
D)  37 
A)  98 
B)  1.97 
C)  30 
D)  37

Question 13

Which of the following statements about world growth during the last half of the 20th century is correct?

Accepted Answer

A)  Growth rates in South American countries have exceeded those in North America. 
B)  Due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States. 
C)  Real GDP per person in Hong Kong and Singapore are approaching or surpassing that in the United States. 
D)  In every decade, Japan has experienced faster growth than the United States. 
A)  Growth rates in South American countries have exceeded those in North America. 
B)  Due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States. 
C)  Real GDP per person in Hong Kong and Singapore are approaching or surpassing that in the United States. 
D)  In every decade, Japan has experienced faster growth than the United States.

Question 14

If the real wage rate is $10.00 per hour and the price level is 100, the money wage rate is

Accepted Answer

A)  $11.10. 
B)  $10.00. 
C)  $11.00. 
D)  $10.10. 
A)  $11.10. 
B)  $10.00. 
C)  $11.00. 
D)  $10.10.

Question 15

Which of the following statements regarding human capital is INCORRECT?

Accepted Answer

A)  The accumulation of human capital is the source of both increased productivity and technological advance. 
B)  Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned. 
C)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress. 
D)  Human capital is the accumulated skill and knowledge of human beings. 
A)  The accumulation of human capital is the source of both increased productivity and technological advance. 
B)  Education is the only vehicle for the creation of human capital because training simply reinforces what has already been learned. 
C)  Writing and mathematics, the most basic of human skills, are crucial elements in economic progress. 
D)  Human capital is the accumulated skill and knowledge of human beings.

Question 16

Which of the following is NOT an important factor affecting economic growth?

Accepted Answer

A)  the rate of growth of capital 
B)  the rate of saving 
C)  the rate of growth in labor productivity 
D)  the rate of fall in the price level 
A)  the rate of growth of capital 
B)  the rate of saving 
C)  the rate of growth in labor productivity 
D)  the rate of fall in the price level

Question 17

Classical growth economists believed that the real wage rate the subsistence real wage rate.

Accepted Answer

A)  would always be above 
B)  would always equal 
C)  could sometimes be above 
D)  None of the above answers is correct. 
A)  would always be above 
B)  would always equal 
C)  could sometimes be above 
D)  None of the above answers is correct.

Question 18

Which of the following is consistent with classical growth theory?

Accepted Answer

A)  Real GDP per person will never permanently increase. 
B)  Real GDP per person will increase because technological change induces investment. 
C)  As real GDP increases, there will be a decrease in the rate of population growth. 
D)  Competition destroys innovation and decreases profit. 
A)  Real GDP per person will never permanently increase. 
B)  Real GDP per person will increase because technological change induces investment. 
C)  As real GDP increases, there will be a decrease in the rate of population growth. 
D)  Competition destroys innovation and decreases profit.

Question 19

According to the new growth theory, competition

Accepted Answer

A)  increases profit. 
B)  has no impact on real profit, only nominal profit. 
C)  reduces profit. 
D)  is only theoretical because all firms are growing at some rate. 
A)  increases profit. 
B)  has no impact on real profit, only nominal profit. 
C)  reduces profit. 
D)  is only theoretical because all firms are growing at some rate.

Question 20

How does the new growth theory explain economic growth?

Accepted Answer

The new growth theory explains growth as

Because the United States is a developed economy, every other country is catching up to the level of U.S. real GDP per person.

-As a result of the rightward shift in the demand curve for labor from LD₀to LD₁, the equilibrium level of employment and potential GDP .

To achieve faster growth, one possibility is to tax

According to new growth theory .

At the full- employment equilibrium in the labor market,

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Which of the following is NOT associated with the new growth theory?

Most is embodied in physical capital.

Classical growth theory assumes that

The purpose of growth accounting is to determine

A decrease in the real wage rate

The table below shows data for China. The economic growth rate in China between 2000 and 2003 was percent.

Which of the following statements about world growth during the last half of the 20th century is correct?

If the real wage rate is $10.00 per hour and the price level is 100, the money wage rate is

Which of the following statements regarding human capital is INCORRECT?

Which of the following is NOT an important factor affecting economic growth?

Classical growth economists believed that the real wage rate the subsistence real wage rate.

Which of the following is consistent with classical growth theory?

According to the new growth theory, competition

How does the new growth theory explain economic growth?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

Because the United States is a developed economy, every other country is catching up to the level of U.S. real GDP per person.

-As a result of the rightward shift in the demand curve for labor from LD0 to LD1, the equilibrium level of employment and potential GDP .

To achieve faster growth, one possibility is to tax

According to new growth theory .

At the full- employment equilibrium in the labor market,

To achieve faster growth, economies can increase income tax rates in order to increase saving rates.

Which of the following is NOT associated with the new growth theory?

Most is embodied in physical capital.

Classical growth theory assumes that

The purpose of growth accounting is to determine

A decrease in the real wage rate

The table below shows data for China. The economic growth rate in China between 2000 and 2003 was percent.

Which of the following statements about world growth during the last half of the 20th century is correct?

If the real wage rate is $10.00 per hour and the price level is 100, the money wage rate is

Which of the following statements regarding human capital is INCORRECT?

Which of the following is NOT an important factor affecting economic growth?

Classical growth economists believed that the real wage rate the subsistence real wage rate.

Which of the following is consistent with classical growth theory?

According to the new growth theory, competition

How does the new growth theory explain economic growth?

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

-As a result of the rightward shift in the demand curve for labor from LD₀to LD₁, the equilibrium level of employment and potential GDP .