Question 1

A negative externality is a good or a service that the government or a private business provides to a foreign country.

Accepted Answer

A) True 
 B)False

Question 2

The main source of Kuwait's wealth is _____, while the main source of Germany's wealth is _____.

Accepted Answer

A)  oil; manufacturing 
B)  manufacturing; oil 
C)  tourism; manufacturing 
D)  information technology; tourism 
A)  oil; manufacturing 
B)  manufacturing; oil 
C)  tourism; manufacturing 
D)  information technology; tourism

Question 3

The convergence hypothesis is:

Accepted Answer

A)  wrong because Latin American and African countries have not been able to grow. 
B)  not wrong, but education, infrastructure, and the rule of law are not equal among nations. 
C)  not wrong, but because poorer nations are involved in so many destabilizing incidents like wars, disease, and famines, they will never be able to catch up with the rest of the world. 
D)  wrong because the income of poorer nations seems to get worse over time and the income of richer nations gets better. 
A)  wrong because Latin American and African countries have not been able to grow. 
B)  not wrong, but education, infrastructure, and the rule of law are not equal among nations. 
C)  not wrong, but because poorer nations are involved in so many destabilizing incidents like wars, disease, and famines, they will never be able to catch up with the rest of the world. 
D)  wrong because the income of poorer nations seems to get worse over time and the income of richer nations gets better.

Question 4

Suppose that a panel of economists predicts that a nation's real GDP per capita will have an average annual growth rate of 2%. According to the rule of 70, how many years will it take for this nation's real GDP per capita to double?

Accepted Answer

A)  35 
B)  70 
C)  140 
D)  20 
A)  35 
B)  70 
C)  140 
D)  20

Question 5

The rule of 70 states that a variable's approximate doubling time equals:

Accepted Answer

A)  70 times the growth rate. 
B)  the growth rate divided by 70. 
C)  70 divided by the doubling time. 
D)  70 divided by the growth rate. 
A)  70 times the growth rate. 
B)  the growth rate divided by 70. 
C)  70 divided by the doubling time. 
D)  70 divided by the growth rate.

Question 6

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

Accepted Answer

A) True 
 B)False

Question 7

A cap and trade system:

Accepted Answer

A)  reduces climate change by requiring individuals and firms to buy licenses to emit greenhouse gases. 
B)  encourages fair trade by limiting the amount of many vegetables that can be imported from Mexico. 
C)  was used in nineteenth-century England to limit coal consumption. 
D)  exempts Chinese imports from Food and Drug Administration regulations. 
A)  reduces climate change by requiring individuals and firms to buy licenses to emit greenhouse gases. 
B)  encourages fair trade by limiting the amount of many vegetables that can be imported from Mexico. 
C)  was used in nineteenth-century England to limit coal consumption. 
D)  exempts Chinese imports from Food and Drug Administration regulations.

Question 8

Conditional convergence suggests that poorer countries:

Accepted Answer

A)  are still catching up to richer countries. 
B)  have GDPs that may not catch up to those of richer countries without changes in education and infrastructure. 
C)  have growth rates that are dependent on their ties to a richer country. 
D)  have growth rates that are dependent on their birth rates. 
A)  are still catching up to richer countries. 
B)  have GDPs that may not catch up to those of richer countries without changes in education and infrastructure. 
C)  have growth rates that are dependent on their ties to a richer country. 
D)  have growth rates that are dependent on their birth rates.

Question 9

Productivity is declining when:

Accepted Answer

A)  the number of hours worked exceeds the number of workers. 
B)  population growth exceeds real GDP growth. 
C)  the ratio of adult civilians employed outside the home rises. 
D)  real GDP growth exceeds the population growth. 
A)  the number of hours worked exceeds the number of workers. 
B)  population growth exceeds real GDP growth. 
C)  the ratio of adult civilians employed outside the home rises. 
D)  real GDP growth exceeds the population growth.

Question 10

Infrastructure does NOT include:

Accepted Answer

A)  roads. 
B)  iron ore deposits. 
C)  power plants. 
D)  cell phone towers. 
A)  roads. 
B)  iron ore deposits. 
C)  power plants. 
D)  cell phone towers.

Question 11

If an economy doubles its growth rate in per capita GDP over 14 years, then the growth rate in per capita GDP averaged 5% per year.

Accepted Answer

A) True 
 B)False

Question 12

Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year and that real GDP per capita of China is $4,000, and its annual growth rate is 7%. How long will it take real GDP per capita of the United States to double?

Accepted Answer

A)  35 years 
B)  50 years 
C)  2.25 years 
D)  14 years 
A)  35 years 
B)  50 years 
C)  2.25 years 
D)  14 years

Question 13

The aggregate production function measures productivity as:

Accepted Answer

A)  real GDP per worker. 
B)  nominal GDP per worker. 
C)  median income per worker. 
D)  average disposable income. 
A)  real GDP per worker. 
B)  nominal GDP per worker. 
C)  median income per worker. 
D)  average disposable income.

Question 14

Use the following to answer questions:  
-(Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from an increase in the quality (as well as quantity) of public health measures?

Accepted Answer

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

Question 15

Among the public goods important for economic growth is/are:

Accepted Answer

A)  publicly held companies like Ford. 
B)  political stability. 
C)  public regulation of businesses. 
D)  low taxes. 
A)  publicly held companies like Ford. 
B)  political stability. 
C)  public regulation of businesses. 
D)  low taxes.

Question 16

Labor productivity growth can be attributed to:

Accepted Answer

A)  improvement in technology. 
B)  a decline in university attendance. 
C)  an increase in population growth. 
D)  a decline in the physical capital per worker. 
A)  improvement in technology. 
B)  a decline in university attendance. 
C)  an increase in population growth. 
D)  a decline in the physical capital per worker.

Question 17

Which item does NOT qualify as physical capital?

Accepted Answer

A)  a shovel 
B)  a factory 
C)  a tractor 
D)  mineral deposits 
A)  a shovel 
B)  a factory 
C)  a tractor 
D)  mineral deposits

Question 18

A negative externality is a cost that individuals or firms impose on others without having to pay compensation.

Accepted Answer

A) True 
 B)False

Question 19

Among the factors that are important for economic growth are:

Accepted Answer

A)  property rights. 
B)  growth accounting. 
C)  natural resources. 
D)  convergence. 
A)  property rights. 
B)  growth accounting. 
C)  natural resources. 
D)  convergence.

Question 20

The economy has grown by 4% per year over the past 30 years. During the same period, the labor force has grown by 1% per year and the quantity of physical capital has grown by 5% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.4%. Assume that human capital has not changed during the past 30 years. How much has technological progress contributed as a percentage of productivity growth?

Accepted Answer

A)  20% 
B)  47% 
C)  53% 
D)  91% 
A)  20% 
B)  47% 
C)  53% 
D)  91%

A negative externality is a good or a service that the government or a private business provides to a foreign country.

The main source of Kuwait's wealth is _, while the main source of Germany's wealth is _.

The convergence hypothesis is:

Suppose that a panel of economists predicts that a nation's real GDP per capita will have an average annual growth rate of 2%. According to the rule of 70, how many years will it take for this nation's real GDP per capita to double?

The rule of 70 states that a variable's approximate doubling time equals:

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

A cap and trade system:

Conditional convergence suggests that poorer countries:

Productivity is declining when:

Infrastructure does NOT include:

If an economy doubles its growth rate in per capita GDP over 14 years, then the growth rate in per capita GDP averaged 5% per year.

Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year and that real GDP per capita of China is $4,000, and its annual growth rate is 7%. How long will it take real GDP per capita of the United States to double?

The aggregate production function measures productivity as:

Use the following to answer questions: -(Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from an increase in the quality (as well as quantity) of public health measures?

Among the public goods important for economic growth is/are:

Labor productivity growth can be attributed to:

Which item does NOT qualify as physical capital?

A negative externality is a cost that individuals or firms impose on others without having to pay compensation.

Among the factors that are important for economic growth are:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 9: Long-Run Economic Growth

A negative externality is a good or a service that the government or a private business provides to a foreign country.

The main source of Kuwait's wealth is _____, while the main source of Germany's wealth is _____.

The convergence hypothesis is:

Suppose that a panel of economists predicts that a nation's real GDP per capita will have an average annual growth rate of 2%. According to the rule of 70, how many years will it take for this nation's real GDP per capita to double?

The rule of 70 states that a variable's approximate doubling time equals:

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

A cap and trade system:

Conditional convergence suggests that poorer countries:

Productivity is declining when:

Infrastructure does NOT include:

If an economy doubles its growth rate in per capita GDP over 14 years, then the growth rate in per capita GDP averaged 5% per year.

Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year and that real GDP per capita of China is $4,000, and its annual growth rate is 7%. How long will it take real GDP per capita of the United States to double?

The aggregate production function measures productivity as:

Use the following to answer questions: -(Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from an increase in the quality (as well as quantity) of public health measures?

Among the public goods important for economic growth is/are:

Labor productivity growth can be attributed to:

Which item does NOT qualify as physical capital?

A negative externality is a cost that individuals or firms impose on others without having to pay compensation.

Among the factors that are important for economic growth are:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

The main source of Kuwait's wealth is _, while the main source of Germany's wealth is _.