Question 1

Which of the following predicts that there can be no sustained rise in real GDP per person above the subsistence level?

Accepted Answer

A)  neoclassical growth theory 
B)  new growth theory 
C)  classical growth theory 
D)  None of the above because all predict that there will be a sustained rise above the subsistence level. 
A)  neoclassical growth theory 
B)  new growth theory 
C)  classical growth theory 
D)  None of the above because all predict that there will be a sustained rise above the subsistence level.

Question 2

An advance in technology that results in increased productivity results in a

Accepted Answer

A)  rightward shift of the labor demand curve. 
B)  movement along the production function. 
C)  rightward shift of both the labor supply and labor demand curves. 
D)  rightward shift of the labor supply curve. 
A)  rightward shift of the labor demand curve. 
B)  movement along the production function. 
C)  rightward shift of both the labor supply and labor demand curves. 
D)  rightward shift of the labor supply curve.

Question 3

How has the U.S. growth experience compared to that of Central Europe and Africa? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

Accepted Answer

A persistent gap in the level of real GD

Question 4

An increase in a nationʹs population results in

Accepted Answer

A)  an upward shift of the nationʹs production function. 
B)  a movement along the nationʹs production function. 
C)  a decrease in the full-employment quantity of labor. 
D)  a rightward shift in the labor demand curve. 
A)  an upward shift of the nationʹs production function. 
B)  a movement along the nationʹs production function. 
C)  a decrease in the full-employment quantity of labor. 
D)  a rightward shift in the labor demand curve.

Question 5

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

Accepted Answer

According to both neoclassical and new g

Question 6

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

Accepted Answer

A) True 
 B)False

Question 7

An increase in productivity relates to

Accepted Answer

A)  producing the same output with more labor hours. 
B)  producing the same output with fewer labor hours. 
C)  working longer over time. 
D)  working harder over time. 
A)  producing the same output with more labor hours. 
B)  producing the same output with fewer labor hours. 
C)  working longer over time. 
D)  working harder over time.

Question 8

The classical growth theory shows how technology changes continually generate economic growth.

Accepted Answer

A) True 
 B)False

Question 9

Labor productivity increases with

Accepted Answer

A)  increases in depreciation. 
B)  increases in capital. 
C)  increases in consumption expenditure. 
D)  All of the above answers are correct. 
A)  increases in depreciation. 
B)  increases in capital. 
C)  increases in consumption expenditure. 
D)  All of the above answers are correct.

Question 10

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

Accepted Answer

A) True 
 B)False

Question 11

The labor demand curve slopes downward because

Accepted Answer

A)  the firm maximizes profits by hiring more labor when the real wage rate rises. 
B)  the firm maximizes profits by hiring more labor when the real wage rate falls. 
C)  workers supply fewer hours of work when the real wage rate rises. 
D)  workers supply more hours of work when the real wage rate rises. 
A)  the firm maximizes profits by hiring more labor when the real wage rate rises. 
B)  the firm maximizes profits by hiring more labor when the real wage rate falls. 
C)  workers supply fewer hours of work when the real wage rate rises. 
D)  workers supply more hours of work when the real wage rate rises.

Question 12

A key feature of the new growth theory is the assumption of

Accepted Answer

A)  diminishing returns to knowledge. 
B)  no diminishing returns to knowledge. 
C)  no diminishing returns to labor. 
D)  diminishing returns to labor. 
A)  diminishing returns to knowledge. 
B)  no diminishing returns to knowledge. 
C)  no diminishing returns to labor. 
D)  diminishing returns to labor.

Question 13

Slowdoniaʹs current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Accepted Answer

A)  70 years 
B)  35 years 
C)  100 years 
D)  10 year 2 
A)  70 years 
B)  35 years 
C)  100 years 
D)  10 year 2

Question 14

Which of the following ideas are included in classical growth theory?
I. Subsistence real GDP per person
II. Growth in real GDP per person is temporary.
III. Technological change induces investment.

Accepted Answer

A)  II and III 
B)  I only 
C)  I and II 
D)  I, II and III 
A)  II and III 
B)  I only 
C)  I and II 
D)  I, II and III

Question 15

According to new growth theory________ .

Accepted Answer

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

Question 16

Labor productivity is

Accepted Answer

A)  the rate of change in real GDP per hour of labor. 
B)  real GDP per hour of labor times the hours of work. 
C)  real GDP per hour of labor times the number of people. 
D)  real GDP per hour of labor. 
A)  the rate of change in real GDP per hour of labor. 
B)  real GDP per hour of labor times the hours of work. 
C)  real GDP per hour of labor times the number of people. 
D)  real GDP per hour of labor.

Question 17

If the price level rises by 3 percent and workersʹ money wages increase by 3 percent, then the

Accepted Answer

A)  quantity of labor demanded does not change because there is no change in the real wage rate. 
B)  quantity of labor demand will decrease. 
C)  quantity of labor demand will increase. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate. 
A)  quantity of labor demanded does not change because there is no change in the real wage rate. 
B)  quantity of labor demand will decrease. 
C)  quantity of labor demand will increase. 
D)  Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate.

Question 18

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

Accepted Answer

A)  rises to eliminate the labor-market surplus. 
B)  rises to eliminate the labor-market shortage. 
C)  falls to eliminate the labor-market shortage. 
D)  falls to eliminate the labor-market surplus. 
A)  rises to eliminate the labor-market surplus. 
B)  rises to eliminate the labor-market shortage. 
C)  falls to eliminate the labor-market shortage. 
D)  falls to eliminate the labor-market surplus.

Question 19

New growth theory holds that choices, and the discoveries that result from them, result in growth that is temporary in nature.

Accepted Answer

A) True 
 B)False

Question 20

The Rule of 70 is used to

Accepted Answer

A)  estimate how much of an economyʹs growth rate is due to increases in capital per hour of labor 
B)  calculate the standard of living 
C)  estimate how long it will take the level of any variable to double 
D)  calculate the economyʹs growth rate 
A)  estimate how much of an economyʹs growth rate is due to increases in capital per hour of labor 
B)  calculate the standard of living 
C)  estimate how long it will take the level of any variable to double 
D)  calculate the economyʹs growth rate

Which of the following predicts that there can be no sustained rise in real GDP per person above the subsistence level?

An advance in technology that results in increased productivity results in a

How has the U.S. growth experience compared to that of Central Europe and Africa? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

An increase in a nationʹs population results in

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

An increase in productivity relates to

The classical growth theory shows how technology changes continually generate economic growth.

Labor productivity increases with

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

The labor demand curve slopes downward because

A key feature of the new growth theory is the assumption of

Slowdoniaʹs current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Which of the following ideas are included in classical growth theory? I. Subsistence real GDP per person II. Growth in real GDP per person is temporary. III. Technological change induces investment.

According to new growth theory________ .

Labor productivity is

If the price level rises by 3 percent and workersʹ money wages increase by 3 percent, then the

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

New growth theory holds that choices, and the discoveries that result from them, result in growth that is temporary in nature.

The Rule of 70 is used to

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters

Exam 6: Economic Growth

Which of the following predicts that there can be no sustained rise in real GDP per person above the subsistence level?

An advance in technology that results in increased productivity results in a

How has the U.S. growth experience compared to that of Central Europe and Africa? How has compared to the recent experience of Asian nations such as Hong Kong and Singapore.

An increase in a nationʹs population results in

Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth. Based on your understanding of growth theory and growth accounting, what would you suggest?

Economists are interested in long-term economic growth because growth increases real GDP per person and improves our standard of living.

An increase in productivity relates to

The classical growth theory shows how technology changes continually generate economic growth.

Labor productivity increases with

New growth theory claims that economic growth occurs because firms reap profits from research and add to the stock of capital.

The labor demand curve slopes downward because

A key feature of the new growth theory is the assumption of

Slowdoniaʹs current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Which of the following ideas are included in classical growth theory? I. Subsistence real GDP per person II. Growth in real GDP per person is temporary. III. Technological change induces investment.

According to new growth theory________ .

Labor productivity is

If the price level rises by 3 percent and workersʹ money wages increase by 3 percent, then the

When the quantity of labor demanded exceeds the quantity of labor supplied, the real wage rate

New growth theory holds that choices, and the discoveries that result from them, result in growth that is temporary in nature.

The Rule of 70 is used to

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: the Keynesian Model

U.S Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Review

Filters