Question 1

Stable property rights

Accepted Answer

A) are conducive to investment. 
B) are found in countries with dictatorships. 
C) are not necessary for rapid growth. 
D) exist in all economies. 
A) are conducive to investment. 
B) are found in countries with dictatorships. 
C) are not necessary for rapid growth. 
D) exist in all economies.

Question 2

In the United States, the wage rates for high school graduates are growing faster than the wage rates for college graduates.

Accepted Answer

A) True 
 B)False

Question 3

The wage premium in the United States for college graduates over high school graduates has remained constant from 1978 to 2000.

Accepted Answer

A) True 
 B)False

Question 4

In the U.S.economy, a large portion of investment decisions are made by

Accepted Answer

A) households. 
B) the private sector. 
C) the public sector. 
D) international organizations. 
A) households. 
B) the private sector. 
C) the public sector. 
D) international organizations.

Question 5

The slowing of the American economy in 2008-2009 gave businesses a strong incentive to raise capital investment.

Accepted Answer

A) True 
 B)False

Question 6

For a given technology and a given labor force, labor productivity will be ____ when the capital stock is ____.

Accepted Answer

A) higher; larger 
B) lower; larger 
C) lower; unchanged 
D) higher; smaller 
A) higher; larger 
B) lower; larger 
C) lower; unchanged 
D) higher; smaller

Question 7

The invention of the Internet should make poorer countries

Accepted Answer

A) poorer due to the expense of new technology. 
B) poorer because the Internet is primarily in richer countries. 
C) richer because technology adoption is easier. 
D) richer because they can distribute information without costs. 
A) poorer due to the expense of new technology. 
B) poorer because the Internet is primarily in richer countries. 
C) richer because technology adoption is easier. 
D) richer because they can distribute information without costs.

Question 8

The act of putting a new product on the market in order to make profits is called

Accepted Answer

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

Question 9

Which of the following would be an example of capital formation?

Accepted Answer

A) The purchase of government bonds 
B) An initial public offering by a technology company 
C) The acquisition of a domestic company by a foreign country 
D) The expansion of a grocery store into a rural area 
A) The purchase of government bonds 
B) An initial public offering by a technology company 
C) The acquisition of a domestic company by a foreign country 
D) The expansion of a grocery store into a rural area

Question 10

If a larger percentage of Americans attended college, the wage premium would probably

Accepted Answer

A) continue rising. 
B) continue falling. 
C) rise. 
D) fall. 
A) continue rising. 
B) continue falling. 
C) rise. 
D) fall.

Question 11

All of the following are reasonable explanations of the labor productivity speed-up in the United States except

Accepted Answer

A) labor force quality. 
B) technological change. 
C) investment spending. 
D) research and development. 
A) labor force quality. 
B) technological change. 
C) investment spending. 
D) research and development.

Question 12

There is no 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 13

During the mid- to late 1990s, the incentives for investment spending resulted in boosts in

Accepted Answer

A) aggregate demand. 
B) personal consumption expenditures. 
C) corporate tax revenue. 
D) capital gain tax revenue. 
A) aggregate demand. 
B) personal consumption expenditures. 
C) corporate tax revenue. 
D) capital gain tax revenue.

Question 14

From 1996 to 1998, the fall in energy prices could be used

Accepted Answer

A) to explain why productivity growth increased. 
B) to indicate improvements in workforce quality. 
C) to indicate the lack of investment. 
D) to explain why productivity growth fell. 
A) to explain why productivity growth increased. 
B) to indicate improvements in workforce quality. 
C) to indicate the lack of investment. 
D) to explain why productivity growth fell.

Question 15

Poor countries often have difficulty investing in capital because

Accepted Answer

A) development assistance is designed to increase consumer goods. 
B) multinational corporations do not bring technological advances into poor countries. 
C) the population is living at subsistence level and cannot afford to save. 
D) they suffer from the cost disease of personal services. 
A) development assistance is designed to increase consumer goods. 
B) multinational corporations do not bring technological advances into poor countries. 
C) the population is living at subsistence level and cannot afford to save. 
D) they suffer from the cost disease of personal services.

Question 16

An increase in the number of hours worked would

Accepted Answer

A) shift the production function upward. 
B) shift the production function downward. 
C) shift the production function outward. 
D) not shift the production function. 
A) shift the production function upward. 
B) shift the production function downward. 
C) shift the production function outward. 
D) not shift the production function.

Question 17

The public sector can stimulate research and development through

Accepted Answer

A) changes to the income tax. 
B) changes to the tariff rate. 
C) changes to immigration. 
D) changes to the capital gains tax. 
A) changes to the income tax. 
B) changes to the tariff rate. 
C) changes to immigration. 
D) changes to the capital gains tax.

Question 18

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

Accepted Answer

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

Question 19

The productivity speed-up in the United States began in the

Accepted Answer

A) mid-1970s. 
B) mid-1980s. 
C) mid-1990s. 
D) beginning of 2001. 
A) mid-1970s. 
B) mid-1980s. 
C) mid-1990s. 
D) beginning of 2001.

Question 20

What is the price of investment? How are they related? What has to be done to increase investment?

Accepted Answer

The real interest rate is the price of i

Exam 23: Economic Growth: Theory and Policy

Stable property rights

In the United States, the wage rates for high school graduates are growing faster than the wage rates for college graduates.

The wage premium in the United States for college graduates over high school graduates has remained constant from 1978 to 2000.

In the U.S.economy, a large portion of investment decisions are made by

The slowing of the American economy in 2008-2009 gave businesses a strong incentive to raise capital investment.

For a given technology and a given labor force, labor productivity will be ____ when the capital stock is ____.

The invention of the Internet should make poorer countries

The act of putting a new product on the market in order to make profits is called

Which of the following would be an example of capital formation?

If a larger percentage of Americans attended college, the wage premium would probably

All of the following are reasonable explanations of the labor productivity speed-up in the United States except

There is no general agreement among economists regarding the sources of the U.S.productivity slowdown that occurred between 1973 and 1995.

During the mid- to late 1990s, the incentives for investment spending resulted in boosts in

From 1996 to 1998, the fall in energy prices could be used

Poor countries often have difficulty investing in capital because

An increase in the number of hours worked would

The public sector can stimulate research and development through

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

The productivity speed-up in the United States began in the

What is the price of investment? How are they related? What has to be done to increase investment?

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

Filters

For a given technology and a given labor force, labor productivity will be when the capital stock is .