Exam 8: Why Do Economies Grow

With a fixed labor force, diminishing returns means that as capital deepening continues:

Creative Destruction, the notion that innovation is promoted by the competitive desire to break production monopolies, can be traced back to:

Recall Application 2, "Growth Need Not Cause Increased Inequality," to answer the following questions: -According to the application, Kuznets' theory states that as a country develops, income inequality:

If the capital stock remains _______ while labor _______, the new labor will likely be _______ productive than the old labor because of diminishing returns.

The fast pace of technological progress in the U.S. is due to the fact that:

Figure 8.1 -Refer to Figure 8.1. If the saving rate were s1 and the economy's level of K is at K1, then:

Figure 8.3 -Refer to Figure 8.3. Which of the following will not move the economy from K1 to K3?

In the 20 years from 1980- 2000, evidence suggests that there existed a high rate of convergence across countries.

An important source of increasing labor productivity is:

Using a production possibility curve, a shifting of the curve outward illustrates:

In an economy with no government or foreign sector, the stock of capital depends on:

Recall Application 5, "The Role of Political Factors in Economic Growth," to answer the following questions: -According to the application, China's political institution is considered:

Diminishing (marginal) returns to labor implies that:

A method used to determine the contribution to economic growth from increased capital, labor and technological progress is called:

-Refer to Table 8.2. Calculate the growth of real GDP per capita from 1995 to 2001.

Based on growth accounting, which of the following would not cause an increase in output?

Real GDP per capita is measured as:

Increased investments in infrastructure or public capital would:

If firms in the economy utilize more efficient ways of organizing economic affairs that allow the economy to increase output without increasing inputs, then we say that the economy is experiencing:

Governments in developing countries can promote economic growth by: