Exam 8: Why Do Economies Grow

Figure 8.2 -Refer to Figure 8.2 If the economy currently has K1 level of capital, which of the following is true?

Recall Application 6, "Culture, Evolution, and Economic Growth," to answer the following questions: -According to the application, the research of Galor and Moav concluded that the sources of evolution was genetic because:

Larger markets are likely to promote faster technological innovation because:

Growth that cannot be explained by increases in capital and labor must be caused by technological progress.

Recall Application 7, "Lack of Property Rights Hinders Growth in Peru," to answer the following questions: -Explain how the lack of clear ownership of urban dwellings prevent firms from investing in businesses that are highly profitable.

Using the rule of 70, how many years would it take for David's income to double if he was to experience a 4 percent increase in income each year?

Many economists believe that technological progress in the U.S. would be accelerated if:

Recall Application 1 , "Global Warming, Rich Countries and Poor Countries," to answer the following questions: -Based on what you learned from the application, a one degree Celsius increase in temperatures:

In the Solow Model, an increase in the capital stock (K) by 10 percent, (holding L constant) will result in an

Because of the principle of diminishing returns, growth promotion through capital deepening works better in countries that:

When relative prices are taken into consideration, the country with the highest level of real GDP per capita in 2008 was:

Which of the following is an assumption in the Solow Model?

In the Solow Model, a higher depreciation rate is illustrated as:

Explain how each of the following is related to the rates of productivity and economic growth in an economy: (a) the level of investment spending (b) the extent of government regulation (c) the level of spending on research and development (d) the saving rate

In addition to saving and investment, what other public policies might a country adopt to increase labor productivity?

Recall Application 1 , "Global Warming, Rich Countries and Poor Countries," to answer the following questions: -Based on what you learned from the application, in what way can we improve the standard of living in poor countries?

According to growth accounting, which of the following helps explain why the growth rate in the United States has been positive during the 1900s?

In growth accounting, the three sources of growth for a country are capital, labor and:

Other things equal, relatively poor countries tend to grow _______ than relatively rich countries and this is known as _______.

Real GDP was 120 in year 1 and 140 in year 2. In this case, the growth rate of real GDP would be: