Question 1

Which of the following institutional arrangements is most likely to promote growth?

Accepted Answer

A) patents and copyrights that expire quickly and are loosely enforced 
B) strong government control over resource allocation decisions 
C) unrestricted trade between nations 
D) all of these 
A) patents and copyrights that expire quickly and are loosely enforced 
B) strong government control over resource allocation decisions 
C) unrestricted trade between nations 
D) all of these

Question 2

Before the Industrial Revolution, living standards in the world

Accepted Answer

A) were relatively stagnant for long periods of time. 
B) were already rising significantly for many decades. 
C) are not known, for lack of reliable records from that period. 
D) were declining because of rapid increases in population. 
A) were relatively stagnant for long periods of time. 
B) were already rising significantly for many decades. 
C) are not known, for lack of reliable records from that period. 
D) were declining because of rapid increases in population.

Question 3

A competitive market system

Accepted Answer

A) encourages growth by allowing producers to make profitable investment decisions based on market signals. 
B) encourages growth by ensuring that everyone in society will receive a decent standard of living. 
C) discourages growth because firms busy competing have no time to innovate or invest. 
D) discourages growth unless government protects domestic firms from foreign competition. 
A) encourages growth by allowing producers to make profitable investment decisions based on market signals. 
B) encourages growth by ensuring that everyone in society will receive a decent standard of living. 
C) discourages growth because firms busy competing have no time to innovate or invest. 
D) discourages growth unless government protects domestic firms from foreign competition.

Question 4

Economic growth rates in follower countries

Accepted Answer

A) tend to be lower than in leader countries because labor forces in follower countries are too small. 
B) tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs. 
C) will never bring real GDP per capita up to the same levels as in leader countries, even if follower growth rates are greater than those in leader countries. 
D) typically average about 2 percent per year. 
A) tend to be lower than in leader countries because labor forces in follower countries are too small. 
B) tend to exceed those in leader countries because followers can cheaply adopt the new technologies that leaders developed at relatively high costs. 
C) will never bring real GDP per capita up to the same levels as in leader countries, even if follower growth rates are greater than those in leader countries. 
D) typically average about 2 percent per year.

Question 5

The problematic trend in the "inverse dependency ratio" in the U.S.is likely to show up first in

Accepted Answer

A) the manufacturing sector. 
B) agriculture. 
C) Social Security. 
D) national defense. 
A) the manufacturing sector. 
B) agriculture. 
C) Social Security. 
D) national defense.

Question 6

Global competition has tended to slow down the rate of productivity growth in the United States.

Accepted Answer

A) True 
 B)False

Question 7

Proponents of economic growth claim that growth leads to greater equality of income in an economy.

Accepted Answer

A) True 
 B)False

Question 8

Factors that contributed to the higher U.S.labor productivity growth in 1995-2010 relative to the earlier period include the following, except

Accepted Answer

A) microchip and information technologies. 
B) new start-up firms and increasing returns. 
C) global competition. 
D) population growth. 
A) microchip and information technologies. 
B) new start-up firms and increasing returns. 
C) global competition. 
D) population growth.

Question 9

Real per capita GDP

Accepted Answer

A) grows at approximately the same rate for all countries. 
B) was much more equal across nations in 1820 than it is today. 
C) has been about 20 times higher in the richer nations than the poorer nations for about 2,000 years. 
D) grows much faster in "leader countries" than in "follower countries." 
A) grows at approximately the same rate for all countries. 
B) was much more equal across nations in 1820 than it is today. 
C) has been about 20 times higher in the richer nations than the poorer nations for about 2,000 years. 
D) grows much faster in "leader countries" than in "follower countries."

Question 10

A nation's real GDP was $250 billion in 2015 and $265 billion in 2016.Its population was 120 million in 2015 and 125 million in 2016.What is its real GDP growth rate in 2016?

Accepted Answer

A) 15.0 percent 
B) 6.0 percent 
C) 5.7 percent 
D) 1.1 percent 
A) 15.0 percent 
B) 6.0 percent 
C) 5.7 percent 
D) 1.1 percent

Question 11

At an annual growth rate of 7 percent, real GDP will double in about

Accepted Answer

A) 11½ years. 
B) 10 years. 
C) 13½ years. 
D) 9 years. 
A) 11½ years. 
B) 10 years. 
C) 13½ years. 
D) 9 years.

Question 12

The dramatic slowdown in productivity growth experienced after the Great Recession

Accepted Answer

A) is believed by most economists to be a permanent shift in the economy. 
B) is still debated among many economists as to whether it represents a permanent shift in the economy. 
C) suggests that prospects for lasting increases in productivity growth are rather poor. 
D) suggests that productivity growth can occur without raising the nation's standard of living. 
A) is believed by most economists to be a permanent shift in the economy. 
B) is still debated among many economists as to whether it represents a permanent shift in the economy. 
C) suggests that prospects for lasting increases in productivity growth are rather poor. 
D) suggests that productivity growth can occur without raising the nation's standard of living.

Question 13

Assume that an economy has 1,500 workers, each working 2,000 hours per year.If the average real output per worker-hour is $20, then total output, or real GDP, will be

Accepted Answer

A) $3 million. 
B) $30 million. 
C) $45 million. 
D) $60 million. 
A) $3 million. 
B) $30 million. 
C) $45 million. 
D) $60 million.

Question 14

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately

Accepted Answer

A) 22 years. 
B) 20 years. 
C) 14 years. 
D) 8 years. 
A) 22 years. 
B) 20 years. 
C) 14 years. 
D) 8 years.

Question 15

The achievement of full employment through time will

Accepted Answer

A) diminish labor productivity. 
B) reduce the level of investment as a percentage of GDP. 
C) increase the realized rate of economic growth. 
D) have no impact on the rate of economic growth. 
A) diminish labor productivity. 
B) reduce the level of investment as a percentage of GDP. 
C) increase the realized rate of economic growth. 
D) have no impact on the rate of economic growth.

Question 16

Strong patent laws encourage innovation and promote economic growth.

Accepted Answer

A) True 
 B)False

Question 17

Strong property rights are important for modern economic growth because

Accepted Answer

A) they allow governments to extract the gains from private citizens' investments. 
B) people are more likely to invest if they don't fear that others can take their returns on investment without compensation. 
C) they ensure an equitable distribution of income. 
D) business cycle fluctuations will be smaller and less likely to disrupt investment patterns. 
A) they allow governments to extract the gains from private citizens' investments. 
B) people are more likely to invest if they don't fear that others can take their returns on investment without compensation. 
C) they ensure an equitable distribution of income. 
D) business cycle fluctuations will be smaller and less likely to disrupt investment patterns.

Question 18

The number of worker-hours available in an economy is determined by the following, except

Accepted Answer

A) size of the labor force. 
B) length of the average workweek. 
C) unemployment rate of the workforce. 
D) labor force participation rate. 
A) size of the labor force. 
B) length of the average workweek. 
C) unemployment rate of the workforce. 
D) labor force participation rate.

Question 19

"Show me a pastoral society with an untouched environment, an abundance of leisure, and nonsecular values, and I will show you an underdeveloped, poverty-ridden country." This statement is most likely to be made by a(n)

Accepted Answer

A) advocate of learning by doing. 
B) advocate of network effects. 
C) proponent of economic growth. 
D) critic of economic growth. 
A) advocate of learning by doing. 
B) advocate of network effects. 
C) proponent of economic growth. 
D) critic of economic growth.

Question 20

Real GDP = worker-hours × labor productivity.

Accepted Answer

A) True 
 B)False

Exam 28: Economic Growth

Which of the following institutional arrangements is most likely to promote growth?

Before the Industrial Revolution, living standards in the world

A competitive market system

Economic growth rates in follower countries

The problematic trend in the "inverse dependency ratio" in the U.S.is likely to show up first in

Global competition has tended to slow down the rate of productivity growth in the United States.

Proponents of economic growth claim that growth leads to greater equality of income in an economy.

Factors that contributed to the higher U.S.labor productivity growth in 1995-2010 relative to the earlier period include the following, except

Real per capita GDP

A nation's real GDP was $250 billion in 2015 and $265 billion in 2016.Its population was 120 million in 2015 and 125 million in 2016.What is its real GDP growth rate in 2016?

At an annual growth rate of 7 percent, real GDP will double in about

The dramatic slowdown in productivity growth experienced after the Great Recession

Assume that an economy has 1,500 workers, each working 2,000 hours per year.If the average real output per worker-hour is $20, then total output, or real GDP, will be

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately

The achievement of full employment through time will

Strong patent laws encourage innovation and promote economic growth.

Strong property rights are important for modern economic growth because

The number of worker-hours available in an economy is determined by the following, except

"Show me a pastoral society with an untouched environment, an abundance of leisure, and nonsecular values, and I will show you an underdeveloped, poverty-ridden country." This statement is most likely to be made by a(n)

Real GDP = worker-hours × labor productivity.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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