Question 1

The United States

Accepted Answer

A)  currently is one of the most corrupt countries. 
B)  has never had a significant problem with corruption. 
C)  had a significant problem with corruption in the 1930s. 
D)  currently ranks among the least corrupt countries. 
A)  currently is one of the most corrupt countries. 
B)  has never had a significant problem with corruption. 
C)  had a significant problem with corruption in the 1930s. 
D)  currently ranks among the least corrupt countries.

Question 2

The rapid growth of China's economy relative to the United States has benefitted U.S. consumers because

Accepted Answer

A)  competition from China has made jobs harder to find in the United States. 
B)  U.S. consumers can purchase more lower-priced goods made in China. 
C)  the United States has comparative advantage in more goods than China does. 
D)  goods made in China are always of higher quality than goods made in the United States. 
A)  competition from China has made jobs harder to find in the United States. 
B)  U.S. consumers can purchase more lower-priced goods made in China. 
C)  the United States has comparative advantage in more goods than China does. 
D)  goods made in China are always of higher quality than goods made in the United States.

Question 3

Firms free ride on the research and development of other firms when they

Accepted Answer

A)  buy a firm's newly developed product, and then give it away to consumers. 
B)  use knowledge other firms have developed without paying for that knowledge. 
C)  license a new technology from a firm that developed the new technology. 
D)  choose a level of research and development that is inefficiently high. 
A)  buy a firm's newly developed product, and then give it away to consumers. 
B)  use knowledge other firms have developed without paying for that knowledge. 
C)  license a new technology from a firm that developed the new technology. 
D)  choose a level of research and development that is inefficiently high.

Question 4

Figure 22-1  
-Refer to Figure 22-1. Technological change is illustrated in the per-worker production function in the figure above by a movement from

Accepted Answer

A)  A to B. 
B)  B to C. 
C)  B to A. 
D)  D to C. 
A)  A to B. 
B)  B to C. 
C)  B to A. 
D)  D to C.

Question 5

Figure 22-4  
-Refer to Figure 22-4. Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from

Accepted Answer

A)  A to C. 
B)  B to C. 
C)  B to A. 
D)  E to B. 
A)  A to C. 
B)  B to C. 
C)  B to A. 
D)  E to B.

Question 6

Foreign investment can give a low-income country

Accepted Answer

A)  access to funds for investment and access to technology. 
B)  the means to slow down growth. 
C)  a path to dependency and low growth. 
D)  no hope to break the vicious cycle of poverty. 
A)  access to funds for investment and access to technology. 
B)  the means to slow down growth. 
C)  a path to dependency and low growth. 
D)  no hope to break the vicious cycle of poverty.

Question 7

Foreign direct investment declined worldwide during the recession of 2007-2009. The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

Accepted Answer

A)  overpopulation. 
B)  low saving and investment. 
C)  a low import/export ratio. 
D)  low government spending. 
A)  overpopulation. 
B)  low saving and investment. 
C)  a low import/export ratio. 
D)  low government spending.

Question 8

Does globalization promote economic growth, and how does globalization affect the welfare of a given country's citizens?

Accepted Answer

More globalized countries generally expe

Question 9

According to Joseph Schumpeter, the theory of creative destruction describes a process by which

Accepted Answer

A)  some new products unleash a gale of destruction that drive other new products out of the market. 
B)  new products unleash a gale of destruction that drives old products out of the market. 
C)  new products are created by the destruction of capital. 
D)  the creation of new products never involves the destruction of old products. 
A)  some new products unleash a gale of destruction that drive other new products out of the market. 
B)  new products unleash a gale of destruction that drives old products out of the market. 
C)  new products are created by the destruction of capital. 
D)  the creation of new products never involves the destruction of old products.

Question 10

There has been catch-up among ________, but there has not been catch-up among ________.

Accepted Answer

A)  developing countries such as Niger; industrialized countries such as Japan 
B)  industrialized countries such as Japan; all countries of the world 
C)  developing countries such as Niger; all countries of the world 
D)  all countries of the world together; industrialized countries such as Japan 
A)  developing countries such as Niger; industrialized countries such as Japan 
B)  industrialized countries such as Japan; all countries of the world 
C)  developing countries such as Niger; all countries of the world 
D)  all countries of the world together; industrialized countries such as Japan

Question 11

A patent grants an inventor exclusive rights to a product for how long?

Accepted Answer

A)  14 years 
B)  17 years 
C)  20 years 
D)  the lifetime of the product 
A)  14 years 
B)  17 years 
C)  20 years 
D)  the lifetime of the product

Question 12

An economic growth model

Accepted Answer

A)  explains changes in nominal GDP per capita in the long run. 
B)  explains changes in real GDP per capita in the long run. 
C)  explains changes in nominal GDP per capita in the short run. 
D)  explains changes in real GDP per capita in the short run. 
A)  explains changes in nominal GDP per capita in the long run. 
B)  explains changes in real GDP per capita in the long run. 
C)  explains changes in nominal GDP per capita in the short run. 
D)  explains changes in real GDP per capita in the short run.

Question 13

Which of the following is not an explanation for the revival in the growth of productivity starting in the mid-1990s?

Accepted Answer

A)  Information and communication innovations are increasingly geared toward improving business processes and not consumer products. 
B)  Faster computers have sped up data processing. 
C)  Internet use has increased the efficiency of how firms buy and sell to each other and to consumers. 
D)  Cell phones and wireless Internet access have increased worker flexibility. 
A)  Information and communication innovations are increasingly geared toward improving business processes and not consumer products. 
B)  Faster computers have sped up data processing. 
C)  Internet use has increased the efficiency of how firms buy and sell to each other and to consumers. 
D)  Cell phones and wireless Internet access have increased worker flexibility.

Question 14

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?

Accepted Answer

A)  The growth model predicts that poor countries should catch up with rich countries, but developing countries are not catching up to lower-income industrialized countries as a group. 
B)  The growth model predicts that poor countries will never catch up with rich countries, but lower-income industrialized countries are catching up to higher-income industrialized countries as a group. 
C)  The growth model predicts that poor countries will catch up with rich countries, but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group. 
D)  The growth model predicts that poor countries will catch up with rich countries, and this is what we observe across all developmental categories of countries. 
A)  The growth model predicts that poor countries should catch up with rich countries, but developing countries are not catching up to lower-income industrialized countries as a group. 
B)  The growth model predicts that poor countries will never catch up with rich countries, but lower-income industrialized countries are catching up to higher-income industrialized countries as a group. 
C)  The growth model predicts that poor countries will catch up with rich countries, but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group. 
D)  The growth model predicts that poor countries will catch up with rich countries, and this is what we observe across all developmental categories of countries.

Question 15

Which of the following is not one of the three sources of technological change?

Accepted Answer

A)  additional amounts of existing capital 
B)  better machinery and equipment 
C)  increases in human capital 
D)  better means of organizing and managing production 
A)  additional amounts of existing capital 
B)  better machinery and equipment 
C)  increases in human capital 
D)  better means of organizing and managing production

Question 16

According to new growth theory

Accepted Answer

A)  physical capital is nonexcludable. 
B)  knowledge capital is excludable. 
C)  knowledge capital is subject to increasing returns. 
D)  knowledge capital is rival and excludable. 
A)  physical capital is nonexcludable. 
B)  knowledge capital is excludable. 
C)  knowledge capital is subject to increasing returns. 
D)  knowledge capital is rival and excludable.

Question 17

If real GDP per capita in the United States is $8,000, what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Accepted Answer

A)  $8,520 
B)  $9,280 
C)  $9,365 
D)  $10,560 
A)  $8,520 
B)  $9,280 
C)  $9,365 
D)  $10,560

Question 18

A small economy increased its capital per hour worked (K/L) from $40,000 to $50,000. As a result, real GDP per worker (Y/L) grew from $20,000 to $25,000. If the economy increases its capital per hour worked by another $10,000 to $60,000, but there is no change in technology, by how much more and in what direction will output per worker change?

Accepted Answer

A)  Output per worker will increase by exactly $5,000. 
B)  Output per worker will increase by more than $5,000. 
C)  Output per worker will increase by less than $5,000. 
D)  Output per worker will fall by more than $5,000. 
A)  Output per worker will increase by exactly $5,000. 
B)  Output per worker will increase by more than $5,000. 
C)  Output per worker will increase by less than $5,000. 
D)  Output per worker will fall by more than $5,000.

Question 19

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output, we say we are facing

Accepted Answer

A)  diminishing returns. 
B)  negative returns. 
C)  accelerating returns. 
D)  decreasing production. 
A)  diminishing returns. 
B)  negative returns. 
C)  accelerating returns. 
D)  decreasing production.

Question 20

You have been hired as an economic advisor for a developing country. You have been asked to focus on education as a means for the country's development. Explain to the prime minister how improving education and training can contribute to his country's economic growth, and why it is important for the government to take a proactive role in promoting education.

Accepted Answer

Education raises the level of human capi

Exam 22: Long-Run Economic Growth: Sources and Policies

The United States

The rapid growth of China's economy relative to the United States has benefitted U.S. consumers because

Firms free ride on the research and development of other firms when they

Figure 22-1 -Refer to Figure 22-1. Technological change is illustrated in the per-worker production function in the figure above by a movement from

Figure 22-4 -Refer to Figure 22-4. Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from

Foreign investment can give a low-income country

Foreign direct investment declined worldwide during the recession of 2007-2009. The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

Does globalization promote economic growth, and how does globalization affect the welfare of a given country's citizens?

According to Joseph Schumpeter, the theory of creative destruction describes a process by which

There has been catch-up among ________, but there has not been catch-up among ________.

A patent grants an inventor exclusive rights to a product for how long?

An economic growth model

Which of the following is not an explanation for the revival in the growth of productivity starting in the mid-1990s?

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?

Which of the following is not one of the three sources of technological change?

According to new growth theory

If real GDP per capita in the United States is $8,000, what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output, we say we are facing

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

There has been catch-up among , but there has not been catch-up among .