Question 1

When actual GDP does not rise as fast as potential GDP, the economy most likely will experience

Accepted Answer

A)  inflation. 
B)  recession. 
C)  economic growth. 
D)  falling unemployment. 
A)  inflation. 
B)  recession. 
C)  economic growth. 
D)  falling unemployment.

Question 2

In 2010, in order to stimulate capital investment, President Obama proposed

Accepted Answer

A)  a reduction in real interest rates. 
B)  an increase in the money supply. 
C)  increased write-offs for businesses purchasing equipment. 
D)  an increase in the tax on capital gains. 
A)  a reduction in real interest rates. 
B)  an increase in the money supply. 
C)  increased write-offs for businesses purchasing equipment. 
D)  an increase in the tax on capital gains.

Question 3

On a graph with time on the horizontal axis and real GDP per capita on the vertical axis, the income levels of poorer countries are

Accepted Answer

A)  diverging more from the incomes of rich countries. 
B)  maintaining a constant gap with the incomes of richer countries. 
C)  crossing the line representing richer countries. 
D)  coming closer to the line representing richer countries. 
A)  diverging more from the incomes of rich countries. 
B)  maintaining a constant gap with the incomes of richer countries. 
C)  crossing the line representing richer countries. 
D)  coming closer to the line representing richer countries.

Question 4

Studies of data support the view that higher levels of education are associated with higher levels of real

Accepted Answer

A)  interest rates. 
B)  per capita GDP. 
C)  price inflation. 
D)  income decline. 
A)  interest rates. 
B)  per capita GDP. 
C)  price inflation. 
D)  income decline.

Question 5

In contrast to richer countries, most residents of poorer nations will have

Accepted Answer

A)  only some primary education. 
B)  primary and secondary education. 
C)  higher education. 
D)  higher levels of productivity. 
A)  only some primary education. 
B)  primary and secondary education. 
C)  higher education. 
D)  higher levels of productivity.

Question 6

Compared to college tuition, the prices of automobiles in the United States have

Accepted Answer

A)  fallen. 
B)  risen. 
C)  stayed the same. 
D)  risen at the same rate as the CPI. 
A)  fallen. 
B)  risen. 
C)  stayed the same. 
D)  risen at the same rate as the CPI.

Question 7

Which furniture production process would have the highest wage rates?

Accepted Answer

A)  furniture made by handsaw and hammer 
B)  furniture made with power equipment 
C)  furniture made by grade school-educated workers 
D)  furniture made in an automated furniture factory 
A)  furniture made by handsaw and hammer 
B)  furniture made with power equipment 
C)  furniture made by grade school-educated workers 
D)  furniture made in an automated furniture factory

Question 8

The act of discovering a new production process would be called

Accepted Answer

A)  invention. 
B)  innovation. 
C)  investment. 
D)  development. 
A)  invention. 
B)  innovation. 
C)  investment. 
D)  development.

Question 9

The school of engineering at a modern university would be a supporter of the new

Accepted Answer

A)  consumption theory. 
B)  growth theory. 
C)  monetary theory. 
D)  construction theory. 
A)  consumption theory. 
B)  growth theory. 
C)  monetary theory. 
D)  construction theory.

Question 10

There is now general agreement among economists regarding the sources of the U.S.productivity slowdown that occurred between 1973 and 1995.

Accepted Answer

A) True 
 B)False

Question 11

With regard to investments in human capital, China has been

Accepted Answer

A)  devoting resources to investment in education that could have been used for consumer goods. 
B)  upgrading its school systems. 
C)  sending many Chinese students to universities in other countries. 
D)  all of the above 
A)  devoting resources to investment in education that could have been used for consumer goods. 
B)  upgrading its school systems. 
C)  sending many Chinese students to universities in other countries. 
D)  all of the above

Question 12

Getting more output from a given amount of inputs is usually the result of increases in

Accepted Answer

A)  the labor force. 
B)  technology. 
C)  the capital stock. 
D)  investment. 
A)  the labor force. 
B)  technology. 
C)  the capital stock. 
D)  investment.

Question 13

Compared to workers in richer countries, workers in developing countries have

Accepted Answer

A)  lower productivity and lower wages. 
B)  higher productivity and higher wages. 
C)  higher productivity but lower wages. 
D)  the same productivity but lower wages. 
A)  lower productivity and lower wages. 
B)  higher productivity and higher wages. 
C)  higher productivity but lower wages. 
D)  the same productivity but lower wages.

Question 14

Which of the following is an explanation for why some poor countries suffer from lower productivity growth?

Accepted Answer

A)  Too much saving has lead to the accumulation of capital in poor countries. 
B)  The adoption of technology too quickly hurts the labor force in poor countries. 
C)  Primary education is universal in poor countries. 
D)  Poor countries have lower capital stocks. 
A)  Too much saving has lead to the accumulation of capital in poor countries. 
B)  The adoption of technology too quickly hurts the labor force in poor countries. 
C)  Primary education is universal in poor countries. 
D)  Poor countries have lower capital stocks.

Question 15

To promote rapid economic growth, the new growth theory would argue for increased scholarships in

Accepted Answer

A)  women's studies. 
B)  deconstructionist literature. 
C)  post-modern sociology. 
D)  biology. 
A)  women's studies. 
B)  deconstructionist literature. 
C)  post-modern sociology. 
D)  biology.

Question 16

Low levels of sales that cause low levels of investment spending is an example of a

Accepted Answer

A)  vicious circle. 
B)  virtuous circle. 
C)  convergence circle. 
D)  divergence circle. 
A)  vicious circle. 
B)  virtuous circle. 
C)  convergence circle. 
D)  divergence circle.

Question 17

Imitation is not only the highest form of flattery but also an easier way for poorer countries to develop new technology.

Accepted Answer

A) True 
 B)False

Question 18

Improvements in human capital and education played a major role in the productivity improvements of the U.S.economy from 1995 to 2009.

Accepted Answer

A) True 
 B)False

Question 19

The information technology revolution seems to have had its greatest positive effect on labor productivity growth in the ____ period.

Accepted Answer

A)  1948-1973 
B)  1973-1995 
C)  1995-2005 
D)  1948-2005 
A)  1948-1973 
B)  1973-1995 
C)  1995-2005 
D)  1948-2005

Question 20

Nearly half of federal government research and development spending takes place in the

Accepted Answer

A)  National Science Foundation. 
B)  National Aeronautics and Space Administration (NAS
A) . 
C)  Department of Defense. 
D)  Federal Office of Technology Policy. 
A)  National Science Foundation. 
B)  National Aeronautics and Space Administration (NAS
A) . 
C)  Department of Defense. 
D)  Federal Office of Technology Policy.

Exam 24: Economic Growth: Theory and Policy

When actual GDP does not rise as fast as potential GDP, the economy most likely will experience

In 2010, in order to stimulate capital investment, President Obama proposed

On a graph with time on the horizontal axis and real GDP per capita on the vertical axis, the income levels of poorer countries are

Studies of data support the view that higher levels of education are associated with higher levels of real

In contrast to richer countries, most residents of poorer nations will have

Compared to college tuition, the prices of automobiles in the United States have

Which furniture production process would have the highest wage rates?

The act of discovering a new production process would be called

The school of engineering at a modern university would be a supporter of the new

There is now general agreement among economists regarding the sources of the U.S.productivity slowdown that occurred between 1973 and 1995.

With regard to investments in human capital, China has been

Getting more output from a given amount of inputs is usually the result of increases in

Compared to workers in richer countries, workers in developing countries have

Which of the following is an explanation for why some poor countries suffer from lower productivity growth?

To promote rapid economic growth, the new growth theory would argue for increased scholarships in

Low levels of sales that cause low levels of investment spending is an example of a

Imitation is not only the highest form of flattery but also an easier way for poorer countries to develop new technology.

Improvements in human capital and education played a major role in the productivity improvements of the U.S.economy from 1995 to 2009.

The information technology revolution seems to have had its greatest positive effect on labor productivity growth in the ____ period.

Nearly half of federal government research and development spending takes place in the

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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