Question 1

Technological improvements are more likely to occur if

Accepted Answer

A)  the economy is centrally planned. 
B)  entrepreneurs are compensated with higher profits for taking risks. 
C)  economic decisions are made by politicians rather than entrepreneurs. 
D)  companies face little competition in their markets. 
A)  the economy is centrally planned. 
B)  entrepreneurs are compensated with higher profits for taking risks. 
C)  economic decisions are made by politicians rather than entrepreneurs. 
D)  companies face little competition in their markets.

Question 2

The key factors in raising standards of living in low-income countries have been increases in

Accepted Answer

A)  capital accumulation and the money supply. 
B)  technology and knowledge. 
C)  foreign aid and population. 
D)  income and government ownership of resources. 
A)  capital accumulation and the money supply. 
B)  technology and knowledge. 
C)  foreign aid and population. 
D)  income and government ownership of resources.

Question 3

The best measure of a country's standard of living is

Accepted Answer

A)  real GDP per labor hour. 
B)  real GDP per unit of capital. 
C)  real GDP per capita. 
D)  total nominal GDP. 
A)  real GDP per labor hour. 
B)  real GDP per unit of capital. 
C)  real GDP per capita. 
D)  total nominal GDP.

Question 4

The rate of growth of productivity in the United States was positive during the 20th century.

Accepted Answer

A) True 
 B)False

Question 5

One reason why many low-income countries experience low rates of growth is because of poor public education and health.

Accepted Answer

A) True 
 B)False

Question 6

You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?

Accepted Answer

A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above 
A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above

Question 7

Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds. Which of the following is not one of those reasons?

Accepted Answer

A)  a smaller capital requirement for modern information technology firms 
B)  the falling price of capital relative to other goods 
C)  a reduced demand for housing due to slowing population growth 
D)  the continued decrease in the value of the dollar relative to the currencies of major U.S. trading partners 
A)  a smaller capital requirement for modern information technology firms 
B)  the falling price of capital relative to other goods 
C)  a reduced demand for housing due to slowing population growth 
D)  the continued decrease in the value of the dollar relative to the currencies of major U.S. trading partners

Question 8

Despite the improvements in information technology, productivity growth since 2006 has fallen to an even lower rate than during the period of slow growth from the mid-1970s to the mid-1990s.

Accepted Answer

A) True 
 B)False

Question 9

How can freedom of the press promote economic growth?

Accepted Answer

A)  A free press can act as a watchdog for corruption, increasing the chances for economic growth. 
B)  A free press can be more easily swayed to report only one side of any issue. 
C)  A free press reduces the likelihood that judges will protect private property rights. 
D)  A free press does not promote economic growth. 
A)  A free press can act as a watchdog for corruption, increasing the chances for economic growth. 
B)  A free press can be more easily swayed to report only one side of any issue. 
C)  A free press reduces the likelihood that judges will protect private property rights. 
D)  A free press does not promote economic growth.

Question 10

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 11

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009. This means that

Accepted Answer

A)  people or firms in other countries reduced their purchases of stocks and bonds in the United States by 42 percent in the first quarter of 2009. 
B)  people or firms in the United States reduced their purchases of stocks and bonds in foreign countries by 42 percent in the first quarter of 2009. 
C)  people or firms in other countries reduced their building of facilities or purchases of facilities in the United States by 42 percent in the first quarter of 2009. 
D)  people or firms in the United States reduced their building of facilities or purchases of facilities in foreign countries by 42 percent in the first quarter of 2009. 
A)  people or firms in other countries reduced their purchases of stocks and bonds in the United States by 42 percent in the first quarter of 2009. 
B)  people or firms in the United States reduced their purchases of stocks and bonds in foreign countries by 42 percent in the first quarter of 2009. 
C)  people or firms in other countries reduced their building of facilities or purchases of facilities in the United States by 42 percent in the first quarter of 2009. 
D)  people or firms in the United States reduced their building of facilities or purchases of facilities in foreign countries by 42 percent in the first quarter of 2009.

Question 12

How do economic growth rates affect a nation's standard of living?

Accepted Answer

The speed at which an economy grows dete

Question 13

The question of whether economic growth is desirable is a positive question, easily settled by economic analysis.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following explains the ability of the U.S. economy to avoid diminishing marginal returns and experience accelerating growth in the early to mid-20th century?

Accepted Answer

A)  continuing technological change 
B)  immigration 
C)  additions of a greater amount of capital of the same quality 
D)  a decrease in the quality of labor 
A)  continuing technological change 
B)  immigration 
C)  additions of a greater amount of capital of the same quality 
D)  a decrease in the quality of labor

Question 15

Table 22-1
  
-Refer to Table 22-1. Based on the table above, which country has a higher standard of living and why?

Accepted Answer

A)  Sweden has a higher standard of living because their GDP is higher. 
B)  Ireland has a higher standard of living because their GDP per capita is higher. 
C)  Sweden has a higher standard of living because their GDP per capita is higher. 
D)  Ireland has a higher standard of living because growth in GDP is greater in Ireland than in Sweden. 
A)  Sweden has a higher standard of living because their GDP is higher. 
B)  Ireland has a higher standard of living because their GDP per capita is higher. 
C)  Sweden has a higher standard of living because their GDP per capita is higher. 
D)  Ireland has a higher standard of living because growth in GDP is greater in Ireland than in Sweden.

Question 16

The economic growth model predicts that

Accepted Answer

A)  GDP per capita of rich countries will grow more rapidly than in poor countries. 
B)  GDP per capita of poor countries will grow more rapidly than in rich countries. 
C)  Governments must centrally direct the economy for growth to occur. 
D)  GDP per capita of poor countries will never change. 
A)  GDP per capita of rich countries will grow more rapidly than in poor countries. 
B)  GDP per capita of poor countries will grow more rapidly than in rich countries. 
C)  Governments must centrally direct the economy for growth to occur. 
D)  GDP per capita of poor countries will never change.

Question 17

Paul Romer, an economist at Stanford University, is most closely associated with what economic theory?

Accepted Answer

A)  new growth theory 
B)  labor productivity theory 
C)  the process of creative destruction 
D)  the Communist Manifesto 
A)  new growth theory 
B)  labor productivity theory 
C)  the process of creative destruction 
D)  the Communist Manifesto

Question 18

Technological change is the key to sustaining economic growth.

Accepted Answer

A) True 
 B)False

Question 19

Growth in real GDP per hour worked in the United States was slowest during what period of time?

Accepted Answer

A)  1900-1949 
B)  1950-1973 
C)  1974-1995 
D)  2006-2016 
A)  1900-1949 
B)  1950-1973 
C)  1974-1995 
D)  2006-2016

Question 20

List four types of government policies which can aid economic growth.

Accepted Answer

Governments can aid economic growth thro

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

Technological improvements are more likely to occur if

The key factors in raising standards of living in low-income countries have been increases in

The best measure of a country's standard of living is

The rate of growth of productivity in the United States was positive during the 20th century.

One reason why many low-income countries experience low rates of growth is because of poor public education and health.

You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?

Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds. Which of the following is not one of those reasons?

Despite the improvements in information technology, productivity growth since 2006 has fallen to an even lower rate than during the period of slow growth from the mid-1970s to the mid-1990s.

How can freedom of the press promote economic growth?

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009. This means that

How do economic growth rates affect a nation's standard of living?

The question of whether economic growth is desirable is a positive question, easily settled by economic analysis.

Which of the following explains the ability of the U.S. economy to avoid diminishing marginal returns and experience accelerating growth in the early to mid-20th century?

Table 22-1 -Refer to Table 22-1. Based on the table above, which country has a higher standard of living and why?

The economic growth model predicts that

Paul Romer, an economist at Stanford University, is most closely associated with what economic theory?

Technological change is the key to sustaining economic growth.

Growth in real GDP per hour worked in the United States was slowest during what period of time?

List four types of government policies which can aid economic growth.

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

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