Question 1

Corruption

Accepted Answer

A)  curtails economic growth. 
B)  raises the rate of growth as bribes enhance income. 
C)  is eliminated by foreign direct investment. 
D)  acts as a magnet for foreign direct investment. 
A)  curtails economic growth. 
B)  raises the rate of growth as bribes enhance income. 
C)  is eliminated by foreign direct investment. 
D)  acts as a magnet for foreign direct investment.

Question 2

Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

Accepted Answer

A)  increasing 
B)  decreasing 
C)  constant 
D)  negative 
A)  increasing 
B)  decreasing 
C)  constant 
D)  negative

Question 3

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s, but eventually this growth slowed. Why did this occur?

Accepted Answer

A)  Capital per hour worked grew rapidly from 1950 to 1980, but technological change occurred very slowly. 
B)  Capital per hour worked grew slowly, but technological change grew very rapidly. 
C)  Increasing implementation of new technologies eventually suffered diminishing marginal returns. 
D)  The centrally planned economy invested too heavily in technological change. 
A)  Capital per hour worked grew rapidly from 1950 to 1980, but technological change occurred very slowly. 
B)  Capital per hour worked grew slowly, but technological change grew very rapidly. 
C)  Increasing implementation of new technologies eventually suffered diminishing marginal returns. 
D)  The centrally planned economy invested too heavily in technological change.

Question 4

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300. Based on this information, what is the slope of the per-worker production function in this range?

Accepted Answer

A)  0.03 
B)  3.3 
C)  33.3 
D)  333 
A)  0.03 
B)  3.3 
C)  33.3 
D)  333

Question 5

If the Commerce Department adjusts the growth rate of GDP downward for the first quarter of 2018, and the Bureau of Labor Statistics adjusts the number of hours worked upward for the first quarter of 2018, what will the Bureau of Labor Statistics do in terms of revising the figures on the growth rate of labor productivity for the first quarter of 2018?

Accepted Answer

A)  The BLS will adjust the growth rate downwards. 
B)  The BLS will adjust the growth rate upwards. 
C)  The BLS will not change the growth rate of productivity. 
D)  The BLS will adjust the level of labor productivity upward and the growth rate downward. 
A)  The BLS will adjust the growth rate downwards. 
B)  The BLS will adjust the growth rate upwards. 
C)  The BLS will not change the growth rate of productivity. 
D)  The BLS will adjust the level of labor productivity upward and the growth rate downward.

Question 6

The owner of a firm wants some advice on how to increase productivity. Suggest three ways the entrepreneur could increase labor productivity through improving technology.

Accepted Answer

There are three main ways to improve tec

Question 7

Table 22-2
  
-Refer to Table 22-2. Calculate the GDP per capita for each country in the table. Which country has the highest standard of living? Why?

Accepted Answer

GDP per capita = GDP / Population.
GDP p

Question 8

Suggest two policies the government could pursue to help increase the accumulation of knowledge.

Accepted Answer

Any two of the following three explanati

Question 9

Which of the following reasons has been suggested for Mexico's slow economic growth?

Accepted Answer

A)  Mexico's Spanish colonial background 
B)  Mexico's long-ruling PRI political party 
C)  Mexico's legal restrictions on the financial sector 
D)  all of the above 
A)  Mexico's Spanish colonial background 
B)  Mexico's long-ruling PRI political party 
C)  Mexico's legal restrictions on the financial sector 
D)  all of the above

Question 10

All of the following policies are ways for a country to promote long-run economic growth except

Accepted Answer

A)  increasing vaccinations against infectious diseases. 
B)  undergoing political reform to decrease corruption. 
C)  enacting stronger laws to protect property rights. 
D)  imposing stricter regulations to limit foreign direct investment. 
A)  increasing vaccinations against infectious diseases. 
B)  undergoing political reform to decrease corruption. 
C)  enacting stronger laws to protect property rights. 
D)  imposing stricter regulations to limit foreign direct investment.

Question 11

In a small European country, it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million. What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $12 million, assuming no technological change and no change in the hours of work?

Accepted Answer

A)  GDP would increase further, but by less than $1 million. 
B)  GDP would increase further by exactly $1 million. 
C)  GDP would increase further by more than $1 million 
D)  GDP would increase further by exactly $4 million. 
A)  GDP would increase further, but by less than $1 million. 
B)  GDP would increase further by exactly $1 million. 
C)  GDP would increase further by more than $1 million 
D)  GDP would increase further by exactly $4 million.

Question 12

Which of the following would you expect to result in faster economic growth?

Accepted Answer

A)  the invention of new computers that increase labor productivity 
B)  a decrease in the average level of education in the economy 
C)  a decrease in the stock of capital per worker 
D)  a decrease in research and development spending 
A)  the invention of new computers that increase labor productivity 
B)  a decrease in the average level of education in the economy 
C)  a decrease in the stock of capital per worker 
D)  a decrease in research and development spending

Question 13

An economy can improve its standard of living by

Accepted Answer

A)  organizing production so that the quantity of goods produced per hour will decrease. 
B)  reducing the amount of human capital workers have. 
C)  increasing the amount of capital available per hour worked. 
D)  all of the above 
A)  organizing production so that the quantity of goods produced per hour will decrease. 
B)  reducing the amount of human capital workers have. 
C)  increasing the amount of capital available per hour worked. 
D)  all of the above

Question 14

Increased foreign direct investment in India has contributed to its recent economic growth.

Accepted Answer

A) True 
 B)False

Question 15

By offering less generous unemployment insurance programs, the United States can expect

Accepted Answer

A)  citizens to pay more in taxes than citizens pay in Europe. 
B)  workers to be slow in gaining new skills in response to fluctuations in the labor market. 
C)  shorter periods of unemployment for their workers. 
D)  longer periods of unemployment for their workers. 
A)  citizens to pay more in taxes than citizens pay in Europe. 
B)  workers to be slow in gaining new skills in response to fluctuations in the labor market. 
C)  shorter periods of unemployment for their workers. 
D)  longer periods of unemployment for their workers.

Question 16

Globalization is positively associated with

Accepted Answer

A)  poverty. 
B)  declining rates of investment. 
C)  declining standards of living. 
D)  economic growth. 
A)  poverty. 
B)  declining rates of investment. 
C)  declining standards of living. 
D)  economic growth.

Question 17

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century. 
A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century.

Question 18

What is human capital?

Accepted Answer

A)  labor productivity 
B)  buildings, equipment, and machinery owned by individuals rather than firms 
C)  buildings, equipment, and machinery owned by firms 
D)  the accumulated knowledge and skills that workers acquire from education, training, and their life experiences 
A)  labor productivity 
B)  buildings, equipment, and machinery owned by individuals rather than firms 
C)  buildings, equipment, and machinery owned by firms 
D)  the accumulated knowledge and skills that workers acquire from education, training, and their life experiences

Question 19

Which of the following is an example of foreign portfolio investment?

Accepted Answer

A)  the purchase of a U.S. stock by a U.S. citizen 
B)  the purchase of a U.S. Treasury bond by a German citizen 
C)  the purchase of a U.S. mutual fund by a U.S. citizen 
D)  the purchase of a Japanese factory by a Korean citizen 
A)  the purchase of a U.S. stock by a U.S. citizen 
B)  the purchase of a U.S. Treasury bond by a German citizen 
C)  the purchase of a U.S. mutual fund by a U.S. citizen 
D)  the purchase of a Japanese factory by a Korean citizen

Question 20

Which of the following statements related to productivity growth in China is true?

Accepted Answer

A)  China has been more successful in developing new technologies than it has in adapting existing technologies developed in other countries. 
B)  Much of China's growth is likely due to the transition from a centrally-planned economy to a market economy. 
C)  Because of the high birth rate in China, the Chinese labor force will continue to increase. 
D)  Manufacturing wages have remained stagnant in China due to the increasingly large supply of low-wage agricultural workers that have yet to move to manufacturing jobs in cities. 
A)  China has been more successful in developing new technologies than it has in adapting existing technologies developed in other countries. 
B)  Much of China's growth is likely due to the transition from a centrally-planned economy to a market economy. 
C)  Because of the high birth rate in China, the Chinese labor force will continue to increase. 
D)  Manufacturing wages have remained stagnant in China due to the increasingly large supply of low-wage agricultural workers that have yet to move to manufacturing jobs in cities.

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

Corruption

Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s, but eventually this growth slowed. Why did this occur?

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300. Based on this information, what is the slope of the per-worker production function in this range?

The owner of a firm wants some advice on how to increase productivity. Suggest three ways the entrepreneur could increase labor productivity through improving technology.

Table 22-2 -Refer to Table 22-2. Calculate the GDP per capita for each country in the table. Which country has the highest standard of living? Why?

Suggest two policies the government could pursue to help increase the accumulation of knowledge.

Which of the following reasons has been suggested for Mexico's slow economic growth?

All of the following policies are ways for a country to promote long-run economic growth except

Which of the following would you expect to result in faster economic growth?

An economy can improve its standard of living by

Increased foreign direct investment in India has contributed to its recent economic growth.

By offering less generous unemployment insurance programs, the United States can expect

Globalization is positively associated with

Growth in real GDP per capita for the world economy was greatest during

What is human capital?

Which of the following is an example of foreign portfolio investment?

Which of the following statements related to productivity growth in China is true?

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