Question 1

Capital gains are profits that you earn on the sale of your

Accepted Answer

A) labor. 
B) money. 
C) financial asset. 
D) economics textbook. 
A) labor. 
B) money. 
C) financial asset. 
D) economics textbook.

Question 2

More education and training usually lead to higher levels of

Accepted Answer

A) productivity. 
B) population. 
C) pollution. 
D) import protectionism. 
A) productivity. 
B) population. 
C) pollution. 
D) import protectionism.

Question 3

The productivity speed-up of the 1950s and the 1960s could have been caused by

Accepted Answer

A) wartime innovations. 
B) civilian innovations after World War II. 
C) industrial innovations spurred by the Korean and Vietnam conflicts. 
D) decreases in the rate of population growth. 
A) wartime innovations. 
B) civilian innovations after World War II. 
C) industrial innovations spurred by the Korean and Vietnam conflicts. 
D) decreases in the rate of population growth.

Question 4

The fall of actual GDP below the level of potential GDP is a signal that the economy is in a recession.

Accepted Answer

A) True 
 B)False

Question 5

One of the main drivers of industrialization in South Korea was

Accepted Answer

A) an increase in human capital. 
B) decreased trade with developed countries. 
C) the accumulation of new technology. 
D) trade with North Korea. 
A) an increase in human capital. 
B) decreased trade with developed countries. 
C) the accumulation of new technology. 
D) trade with North Korea.

Question 6

Which of the following is not a reason used to explain the slowdown in productivity in the United States?

Accepted Answer

A) The lack of savings in the 1980s and early 1990s 
B) High energy prices in the 1970s 
C) Competition from China and Japan 
D) Inadequate workforce skills 
A) The lack of savings in the 1980s and early 1990s 
B) High energy prices in the 1970s 
C) Competition from China and Japan 
D) Inadequate workforce skills

Question 7

A superior level of technology is an important reason the productivity of workers in rich countries is high.

Accepted Answer

A) True 
 B)False

Question 8

Improvements in the level of technology will generally shift the production function downward.

Accepted Answer

A) True 
 B)False

Question 9

In general, poor countries

Accepted Answer

A) receive development assistance in order to alleviate poverty. 
B) have secure property rights, which attract corporations expand their offices in their population centers. 
C) have slower productivity growth rates than wealthier countries, according to the convergence hypothesis. 
D) have highly skilled workforces. 
A) receive development assistance in order to alleviate poverty. 
B) have secure property rights, which attract corporations expand their offices in their population centers. 
C) have slower productivity growth rates than wealthier countries, according to the convergence hypothesis. 
D) have highly skilled workforces.

Question 10

What is convergence hypothesis? Why should we expect convergence in the long run?

Accepted Answer

The convergence hypothesis holds that na

Question 11

Which price would you expect to rise the most in a high-income growing economy?

Accepted Answer

A) Semiconductors for personal computers 
B) Tickets to a ballet performance 
C) Passenger automobiles 
D) Blu-ray players 
A) Semiconductors for personal computers 
B) Tickets to a ballet performance 
C) Passenger automobiles 
D) Blu-ray players

Question 12

Human capital is the amount of

Accepted Answer

A) capital available to workforce. 
B) skill embodied in the workforce. 
C) output the labor force can produce. 
D) healthy work force in the total population. 
A) capital available to workforce. 
B) skill embodied in the workforce. 
C) output the labor force can produce. 
D) healthy work force in the total population.

Question 13

The convergence hypothesis suggests that poor countries may close the income gap with rich countries.

Accepted Answer

A) True 
 B)False

Question 14

The process of invention is the act of

Accepted Answer

A) introducing a new product into the market. 
B) applying a process in a new area of the market. 
C) discovering a new process or product. 
D) adopting an innovation to a profitable use. 
A) introducing a new product into the market. 
B) applying a process in a new area of the market. 
C) discovering a new process or product. 
D) adopting an innovation to a profitable use.

Question 15

The type of human capital formation that occurs in the business sector is called

Accepted Answer

A) vocational education. 
B) business education. 
C) on-the-job training. 
D) productivity enhancement. 
A) vocational education. 
B) business education. 
C) on-the-job training. 
D) productivity enhancement.

Question 16

In 2008-2009, the U.S.economy provided a

Accepted Answer

A) healthy climate for investment spending. 
B) change in aggregate demand that fostered more capital formation. 
C) sluggish climate for investment spending. 
D) booming economy that spurred investment spending. 
A) healthy climate for investment spending. 
B) change in aggregate demand that fostered more capital formation. 
C) sluggish climate for investment spending. 
D) booming economy that spurred investment spending.

Question 17

The application of new technology refers to

Accepted Answer

A) imitation. 
B) investment. 
C) innovation. 
D) education. 
A) imitation. 
B) investment. 
C) innovation. 
D) education.

Question 18

Private sector investment is usually done through borrowing.The economic variable that influences the level of investment is the

Accepted Answer

A) inflation rate. 
B) per capita GDP. 
C) the real interest rate. 
D) employment rate. 
A) inflation rate. 
B) per capita GDP. 
C) the real interest rate. 
D) employment rate.

Question 19

Which of the following statements is not true?

Accepted Answer

A) There is a wage premium for investing in high levels of education. 
B) The wage premium of men and women college graduates has been increasing over time. 
C) Better-educated individuals are more productive. 
D) Public policy initiatives that support on-the-job training have been met with mixed results. 
A) There is a wage premium for investing in high levels of education. 
B) The wage premium of men and women college graduates has been increasing over time. 
C) Better-educated individuals are more productive. 
D) Public policy initiatives that support on-the-job training have been met with mixed results.

Question 20

Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity.Its conclusion was

Accepted Answer

A) when poor people are allowed access to the institutions richer people enjoy, they are ill equipped to take advantage of those benefits. 
B) when poor people are allowed access to the institutions richer people enjoy, they can thrive and help themselves. 
C) that there was no measurable difference between the countries that actively encouraged market activity from those that discouraged it. 
D) without the proper resources, encouraging market activity had no effect. 
A) when poor people are allowed access to the institutions richer people enjoy, they are ill equipped to take advantage of those benefits. 
B) when poor people are allowed access to the institutions richer people enjoy, they can thrive and help themselves. 
C) that there was no measurable difference between the countries that actively encouraged market activity from those that discouraged it. 
D) without the proper resources, encouraging market activity had no effect.

Exam 23: Economic Growth: Theory and Policy

Capital gains are profits that you earn on the sale of your

More education and training usually lead to higher levels of

The productivity speed-up of the 1950s and the 1960s could have been caused by

The fall of actual GDP below the level of potential GDP is a signal that the economy is in a recession.

One of the main drivers of industrialization in South Korea was

Which of the following is not a reason used to explain the slowdown in productivity in the United States?

A superior level of technology is an important reason the productivity of workers in rich countries is high.

Improvements in the level of technology will generally shift the production function downward.

In general, poor countries

What is convergence hypothesis? Why should we expect convergence in the long run?

Which price would you expect to rise the most in a high-income growing economy?

Human capital is the amount of

The convergence hypothesis suggests that poor countries may close the income gap with rich countries.

The process of invention is the act of

The type of human capital formation that occurs in the business sector is called

In 2008-2009, the U.S.economy provided a

The application of new technology refers to

Private sector investment is usually done through borrowing.The economic variable that influences the level of investment is the

Which of the following statements is not true?

Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity.Its conclusion was

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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