Question 1

If capital per worker increases,labour productivity

Accepted Answer

A) decreases for a given level of technology. 
B) increases because the level of technology increases. 
C) increases for a given level of technology. 
D) decreases because the level of technology decreases. 
E) does not change unless technology advances at the same time. 
A) decreases for a given level of technology. 
B) increases because the level of technology increases. 
C) increases for a given level of technology. 
D) decreases because the level of technology decreases. 
E) does not change unless technology advances at the same time. C

Question 2

The Rule of 70 is used to

Accepted Answer

A) estimate how much of an economy's growth rate is attributable to increases in capital per hour of labour. 
B) calculate the standard of living. 
C) calculate the economy's growth rate. 
D) estimate how long it will take the level of any variable to double. 
E) estimate how much of an economy's growth rate is attributable to technological advance. 
A) estimate how much of an economy's growth rate is attributable to increases in capital per hour of labour. 
B) calculate the standard of living. 
C) calculate the economy's growth rate. 
D) estimate how long it will take the level of any variable to double. 
E) estimate how much of an economy's growth rate is attributable to technological advance. D

Question 3

Economic growth is

Accepted Answer

A) a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. 
B) a sustained expansion of consumption expenditure over a given period. 
C) always accompanied by a rising price level. 
D) equal to real GDP per capita multiplied by 70. 
E) a sustained expansion of production possibilities measured as the increase in real GDP over a given period. 
A) a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. 
B) a sustained expansion of consumption expenditure over a given period. 
C) always accompanied by a rising price level. 
D) equal to real GDP per capita multiplied by 70. 
E) a sustained expansion of production possibilities measured as the increase in real GDP over a given period. E

Question 4

Growthland's real GDP per person was $112,000 in 2009 and $117,000 in 2010.What is the growth rate of Growthland's real GDP per person in 2010?

Accepted Answer

A) 4.3% 
B) 4.5% 
C) 5% 
D) 12% 
E) 17% 
A) 4.3% 
B) 4.5% 
C) 5% 
D) 12% 
E) 17%

Question 5

In the neoclassical growth theory,economic growth eventually stops after a technological advance when

Accepted Answer

A) the return on capital falls and the incentive to invest weakens. 
B) knowledge capital is replicated. 
C) the subsistence real wage rate falls. 
D) the real wage rate increases. 
E) high population growth occurs. 
A) the return on capital falls and the incentive to invest weakens. 
B) knowledge capital is replicated. 
C) the subsistence real wage rate falls. 
D) the real wage rate increases. 
E) high population growth occurs.

Question 6

Labour productivity is

Accepted Answer

A) real GDP per hour of labour times the hours of work. 
B) real GDP per hour of labour times the population. 
C) the quantity of real GDP produced by an hour of labour. 
D) the rate of change in real GDP per hour of labour. 
E) none of the above. 
A) real GDP per hour of labour times the hours of work. 
B) real GDP per hour of labour times the population. 
C) the quantity of real GDP produced by an hour of labour. 
D) the rate of change in real GDP per hour of labour. 
E) none of the above.

Question 7

Which theory of economic growth argues that,in the long run,people do not benefit from growth?

Accepted Answer

A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories 
A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories

Question 8

Which one of the following quotations could be attributed to a supporter of the classical growth theory?

Accepted Answer

A) "Growth will last as long as technology keeps advancing." 
B) "Prosperity will last as long as technology keeps advancing." 
C) "Growth will last only until the increase in population brings productivity down to the subsistence level." 
D) "Prosperity will last as long as there is knowledge accumulation." 
E) "Growth will last as long as knowledge accumulation continues." 
A) "Growth will last as long as technology keeps advancing." 
B) "Prosperity will last as long as technology keeps advancing." 
C) "Growth will last only until the increase in population brings productivity down to the subsistence level." 
D) "Prosperity will last as long as there is knowledge accumulation." 
E) "Growth will last as long as knowledge accumulation continues."

Question 9

Real GDP per person in the country of Flip is $10,000,and the growth rate is 10 percent a year.Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year.When will real GDP per person be greater in Flip than in Flap?

Accepted Answer

A) in 2 years 
B) in 15 years 
C) never 
D) in 10 years 
E) in 7 years 
A) in 2 years 
B) in 15 years 
C) never 
D) in 10 years 
E) in 7 years

Question 10

If real GDP is $12,150 billion and aggregate labour hours are 270 billion,labour productivity equals

Accepted Answer

A) $6.50 an hour. 
B) $45 an hour. 
C) $48 an hour. 
D) $650 an hour. 
E) $32.81 an hour. 
A) $6.50 an hour. 
B) $45 an hour. 
C) $48 an hour. 
D) $650 an hour. 
E) $32.81 an hour.

Question 11

Between 1926 and 2010 real GDP per person in Canada grew at an average rate of

Accepted Answer

A) 2.8 percent a year. 
B) 1.7 percent a year. 
C) 2.0 percent a year. 
D) 3.6 percent a year. 
E) 4.3 percent a year. 
A) 2.8 percent a year. 
B) 1.7 percent a year. 
C) 2.0 percent a year. 
D) 3.6 percent a year. 
E) 4.3 percent a year.

Question 12

Which theory of economic growth argues that growth does not automatically slow down?

Accepted Answer

A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories 
A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories

Question 13

Use the figure below to answer the following questions.
   
Figure 22.3.2
-Refer to Figure 22.3.2.The equilibrium quantity of labour is

Accepted Answer

A) 100 billion hours. 
B) 150 billion hours. 
C) 200 billion hours. 
D) 50 billion hours. 
E) 250 billion hours. 
A) 100 billion hours. 
B) 150 billion hours. 
C) 200 billion hours. 
D) 50 billion hours. 
E) 250 billion hours.

Question 14

Labour productivity grows as

Accepted Answer

A) consumption expenditure increases. 
B) depreciation increases. 
C) physical capital grows. 
D) human capital grows. 
E) both C and D are correct. 
A) consumption expenditure increases. 
B) depreciation increases. 
C) physical capital grows. 
D) human capital grows. 
E) both C and D are correct.

Question 15

The gap between real GDP per person in Canada and Hong Kong has ________ since 1960.During this period,the growth rate of real GDP per person in Canada has been ________ than in Hong Kong.

Accepted Answer

A) reversed;faster 
B) increased;faster 
C) remained constant;equal 
D) reversed;slower 
E) decreased;faster 
A) reversed;faster 
B) increased;faster 
C) remained constant;equal 
D) reversed;slower 
E) decreased;faster

Question 16

________ is the accumulated skill and knowledge of human beings.

Accepted Answer

A) Labour productivity 
B) Human capital 
C) Capital 
D) Technology 
E) Human investment 
A) Labour productivity 
B) Human capital 
C) Capital 
D) Technology 
E) Human investment

Question 17

In developing nations,microloans ________.

Accepted Answer

A) have enabled small businesses with limited access to credit to purchase capital and expand, allowing greater economic growth 
B) have increased the indebtedness of impoverished people, slowing economic growth 
C) are primarily used to finance consumption expenditure, leading to economic growth 
D) are far too small to have any discernible effect 
E) discourage saving and investment 
A) have enabled small businesses with limited access to credit to purchase capital and expand, allowing greater economic growth 
B) have increased the indebtedness of impoverished people, slowing economic growth 
C) are primarily used to finance consumption expenditure, leading to economic growth 
D) are far too small to have any discernible effect 
E) discourage saving and investment

Question 18

Choose the statements concerning neoclassical growth theory which are true.
1.Neoclassical growth theory was developed in the late 19th century.
2.The rate of technological change influences the economic growth rate but economic growth does not influence the pace of technological change.
3.Economic growth will stop if technology stops advancing.
4.Technological change results from the choices people make in the pursuit of profit.

Accepted Answer

A) Statements 1 and 4 are correct. 
B) Statements 3 and 4 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 1 and 3 are correct. 
E) Statements 2 and 4 are correct. 
A) Statements 1 and 4 are correct. 
B) Statements 3 and 4 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 1 and 3 are correct. 
E) Statements 2 and 4 are correct.

Question 19

When labour productivity increases,the demand for labour curve ________ and the supply of labour curve ________.

Accepted Answer

A) shifts rightward;shifts rightward 
B) shifts rightward;does not shift 
C) shifts leftward;shifts rightward 
D) shifts leftward;does not shift 
E) shifts rightward;shifts leftward 
A) shifts rightward;shifts rightward 
B) shifts rightward;does not shift 
C) shifts leftward;shifts rightward 
D) shifts leftward;does not shift 
E) shifts rightward;shifts leftward

Question 20

All of the following statements are included in new growth theory except ________.

Accepted Answer

A) discoveries are a public capital good 
B) discoveries result from choices 
C) the forces of competition destroy incentives to make new discoveries 
D) discoveries bring profit, and competition destroys profit 
E) knowledge is capital that is not subject to the law of diminishing returns 
A) discoveries are a public capital good 
B) discoveries result from choices 
C) the forces of competition destroy incentives to make new discoveries 
D) discoveries bring profit, and competition destroys profit 
E) knowledge is capital that is not subject to the law of diminishing returns

Exam 22: Economic Growth

If capital per worker increases,labour productivity

The Rule of 70 is used to

Economic growth is

Growthland's real GDP per person was $112,000 in 2009 and $117,000 in 2010.What is the growth rate of Growthland's real GDP per person in 2010?

In the neoclassical growth theory,economic growth eventually stops after a technological advance when

Labour productivity is

Which theory of economic growth argues that,in the long run,people do not benefit from growth?

Which one of the following quotations could be attributed to a supporter of the classical growth theory?

Real GDP per person in the country of Flip is $10,000,and the growth rate is 10 percent a year.Real GDP per person in the country of Flap is $20,000 and the growth rate is 5 percent a year.When will real GDP per person be greater in Flip than in Flap?

If real GDP is $12,150 billion and aggregate labour hours are 270 billion,labour productivity equals

Between 1926 and 2010 real GDP per person in Canada grew at an average rate of

Which theory of economic growth argues that growth does not automatically slow down?

Use the figure below to answer the following questions. Figure 22.3.2 -Refer to Figure 22.3.2.The equilibrium quantity of labour is

Labour productivity grows as

The gap between real GDP per person in Canada and Hong Kong has ________ since 1960.During this period,the growth rate of real GDP per person in Canada has been ________ than in Hong Kong.

________ is the accumulated skill and knowledge of human beings.

In developing nations,microloans ________.

When labour productivity increases,the demand for labour curve ________ and the supply of labour curve ________.

All of the following statements are included in new growth theory except ________.

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

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

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

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The gap between real GDP per person in Canada and Hong Kong has since 1960.During this period,the growth rate of real GDP per person in Canada has been than in Hong Kong.

When labour productivity increases,the demand for labour curve and the supply of labour curve .