Question 1

What can governments do to promote economic development in light of technology adoption barriers?

Accepted Answer

A) promote free trade 
B) increase government spending 
C) improve the environment 
D) promote labour unions 
E) allow population growth rates to increase 
A) promote free trade 
B) increase government spending 
C) improve the environment 
D) promote labour unions 
E) allow population growth rates to increase

Question 2

The endogenous growth models were characterized by

Accepted Answer

A) Friedman and Lucas. 
B) Malthus. 
C) Parente and Prescott. 
D) Lucas and Romer. 
E) Solow. 
A) Friedman and Lucas. 
B) Malthus. 
C) Parente and Prescott. 
D) Lucas and Romer. 
E) Solow.

Question 3

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

Accepted Answer

A) Physical capital accumulation is subject to decreasing marginal returns, but human capital accumulation is not. 
B) Both physical capital accumulation and human capital accumulation are characterized by increasing marginal returns. 
C) Human capital accumulation is subject to decreasing marginal returns, but physical capital accumulation is not. 
D) Both physical capital accumulation and human capital accumulation are characterized by decreasing marginal returns. 
E) Neither physical capital accumulation nor human capital accumulation is characterized by decreasing marginal returns. 
A) Physical capital accumulation is subject to decreasing marginal returns, but human capital accumulation is not. 
B) Both physical capital accumulation and human capital accumulation are characterized by increasing marginal returns. 
C) Human capital accumulation is subject to decreasing marginal returns, but physical capital accumulation is not. 
D) Both physical capital accumulation and human capital accumulation are characterized by decreasing marginal returns. 
E) Neither physical capital accumulation nor human capital accumulation is characterized by decreasing marginal returns.

Question 4

In contrast to the Solow growth model, the endogenous growth model

Accepted Answer

A) predicts convergence in per capita incomes over time. 
B) does not take savings into account. 
C) does not explain reality. 
D) does not take standards of living into account. 
E) predicts persistent differences in per capita income. 
A) predicts convergence in per capita incomes over time. 
B) does not take savings into account. 
C) does not explain reality. 
D) does not take standards of living into account. 
E) predicts persistent differences in per capita income.

Question 5

In the endogenous growth model presented in the text, an increase in the fraction of time accumulating human capital

Accepted Answer

A) decreases the growth rate of human capital and reduces total factor productivity. 
B) decreases the growth rate of human capital and decreases the growth rate of output. 
C) decreases the growth rate of human capital and increases the growth rate of output. 
D) increases the growth rate of human capital and decreases the growth rate of output. 
E) increases the growth rate of human capital and increases the growth rate of output. 
A) decreases the growth rate of human capital and reduces total factor productivity. 
B) decreases the growth rate of human capital and decreases the growth rate of output. 
C) decreases the growth rate of human capital and increases the growth rate of output. 
D) increases the growth rate of human capital and decreases the growth rate of output. 
E) increases the growth rate of human capital and increases the growth rate of output.

Question 6

If, in a given country, there is a large effect of the human capital of others on human capital accumulation by each individual, then

Accepted Answer

A) the government should tax human capital transfers. 
B) the economy must be inefficient. 
C) there will be speedy convergence in incomes across the population. 
D) this is probably due to private education. 
E) incomes will never converge across the population. 
A) the government should tax human capital transfers. 
B) the economy must be inefficient. 
C) there will be speedy convergence in incomes across the population. 
D) this is probably due to private education. 
E) incomes will never converge across the population.

Question 7

Romer's model of endogenous growth is

Accepted Answer

A) inconsistent with evidence of convergence in the richer countries and inconsistent with evidence of convergence in the poorer countries. 
B) inconsistent with evidence of convergence in the richer countries and consistent with evidence of convergence in the poorer countries. 
C) consistent with evidence of convergence in the richer countries and inconsistent with evidence of convergence in the poorer countries. 
D) consistent with evidence of convergence in the richer countries and consistent with evidence of convergence in the poorer countries. 
E) only consistent with evidence of convergence in the richer countries. 
A) inconsistent with evidence of convergence in the richer countries and inconsistent with evidence of convergence in the poorer countries. 
B) inconsistent with evidence of convergence in the richer countries and consistent with evidence of convergence in the poorer countries. 
C) consistent with evidence of convergence in the richer countries and inconsistent with evidence of convergence in the poorer countries. 
D) consistent with evidence of convergence in the richer countries and consistent with evidence of convergence in the poorer countries. 
E) only consistent with evidence of convergence in the richer countries.

Question 8

Barriers to the adoption of new technology causes

Accepted Answer

A) new government policies to be implemented. 
B) trade restrictions to be imposed. 
C) the size of government to diminish. 
D) total factor productivity to differ. 
E) output per worker to rise. 
A) new government policies to be implemented. 
B) trade restrictions to be imposed. 
C) the size of government to diminish. 
D) total factor productivity to differ. 
E) output per worker to rise.

Question 9

For the Solow model to accurately explain the observed divergence of growth experience around the world would require

Accepted Answer

A) differences in consumption per worker. 
B) barriers to the introduction of new technologies. 
C) inadequate educational opportunities in poor countries. 
D) differences in savings rates across countries. 
E) differences in population growth rates across countries. 
A) differences in consumption per worker. 
B) barriers to the introduction of new technologies. 
C) inadequate educational opportunities in poor countries. 
D) differences in savings rates across countries. 
E) differences in population growth rates across countries.

Question 10

Government policies that increase the efficiency of the education sector

Accepted Answer

A) increase the growth rate of consumption, has no effect on output. 
B) imply a trade-off between accumulating human capital and physical capital. 
C) increase the growth rate of output but have an ambiguous impact on consumption growth and welfare. 
D) increase the growth rate of output and consumption, unambiguously increasing welfare. 
E) increase welfare but have ambiguous effects on growth rates of consumption and output. 
A) increase the growth rate of consumption, has no effect on output. 
B) imply a trade-off between accumulating human capital and physical capital. 
C) increase the growth rate of output but have an ambiguous impact on consumption growth and welfare. 
D) increase the growth rate of output and consumption, unambiguously increasing welfare. 
E) increase welfare but have ambiguous effects on growth rates of consumption and output.

Question 11

In the endogenous growth model presented in the text, suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of
Human capital accumulation. The growth rate of human capital equals

Accepted Answer

A)  $1 + b ( 1 - u )$. 
B)  $( 1 + b ) ( 1 - u )$. 
C)  $u ( 1 - b ) - 1$. 
D)  $b ( 1 - u ) ^ { 2 }$. 
E)  $b ( 1 - u ) - 1$. 
A)  $1 + b ( 1 - u )$. 
B)  $( 1 + b ) ( 1 - u )$. 
C)  $u ( 1 - b ) - 1$. 
D)  $b ( 1 - u ) ^ { 2 }$. 
E)  $b ( 1 - u ) - 1$.

Question 12

The government can cause growth to increase in the endogenous growth model by

Accepted Answer

A) increasing physical capital investment. 
B) closing schools so that people can consume more. 
C) reducing physical capital investment. 
D) promoting more efficient human capital accumulation and the devotion of more time to human capital accumulation. 
E) cutting back on government spending. 
A) increasing physical capital investment. 
B) closing schools so that people can consume more. 
C) reducing physical capital investment. 
D) promoting more efficient human capital accumulation and the devotion of more time to human capital accumulation. 
E) cutting back on government spending.

Question 13

Total factor productivity growth involves

Accepted Answer

A) research and development by firms, education, and training on the job. 
B) favourable government policies. 
C) increasing consumption per worker and income per worker. 
D) spending on national defence and the environment. 
E) increasing the size of government. 
A) research and development by firms, education, and training on the job. 
B) favourable government policies. 
C) increasing consumption per worker and income per worker. 
D) spending on national defence and the environment. 
E) increasing the size of government.

Question 14

In the Solow growth model, a country can grow at a higher rate than the population growth rate if

Accepted Answer

A) capital per worker is below its steady state level. 
B) there is free trade. 
C) convergence has occurred. 
D) the economy is in a steady state. 
E) capital per worker is above its steady state level. 
A) capital per worker is below its steady state level. 
B) there is free trade. 
C) convergence has occurred. 
D) the economy is in a steady state. 
E) capital per worker is above its steady state level.

Question 15

In the endogenous growth models of Lucas and Romer, an increase in a worker's level of human capital

Accepted Answer

A) increases neither the amount of additional human capital he or she can produce nor the amount of output she can produce. 
B) increases the amount of additional human capital he or she can produce, but does not increase the amount of output she can produce. 
C) increases both the amount of additional human capital he or she can produce and the amount of output she can produce. 
D) increases both the amount of additional human capital he or she can produce and the amount of total factor productivity produced. 
E) increases the amount of additional output he or she can produce, but does not increase the amount of human capital she can produce. 
A) increases neither the amount of additional human capital he or she can produce nor the amount of output she can produce. 
B) increases the amount of additional human capital he or she can produce, but does not increase the amount of output she can produce. 
C) increases both the amount of additional human capital he or she can produce and the amount of output she can produce. 
D) increases both the amount of additional human capital he or she can produce and the amount of total factor productivity produced. 
E) increases the amount of additional output he or she can produce, but does not increase the amount of human capital she can produce.

Question 16

If monopoly power is NOT protected by government

Accepted Answer

A) firms must develop and implement new technologies to increase productivity. 
B) other barriers to technology adoption will emerge. 
C) firms must lobby for protection. 
D) a country's standard of living will decline. 
E) firms have no incentive to innovate and increase productivity. 
A) firms must develop and implement new technologies to increase productivity. 
B) other barriers to technology adoption will emerge. 
C) firms must lobby for protection. 
D) a country's standard of living will decline. 
E) firms have no incentive to innovate and increase productivity.

Question 17

The Solow growth model

Accepted Answer

A) predicts convergence in incomes per capita across countries. 
B) shows why China will exceed the United States in terms of per-capita income. 
C) is not consistent with post-industrial revolution development, in contrast to the Malthusian model. 
D) explains research and development. 
E) does a better job of explaining income inequality within a country than income inequality in the world. 
A) predicts convergence in incomes per capita across countries. 
B) shows why China will exceed the United States in terms of per-capita income. 
C) is not consistent with post-industrial revolution development, in contrast to the Malthusian model. 
D) explains research and development. 
E) does a better job of explaining income inequality within a country than income inequality in the world.

Question 18

Human capital accumulation is different from physical capital accumulation in that

Accepted Answer

A) human capital suffers from diminishing marginal returns. 
B) there is no limit to human knowledge or how productive individuals can become. 
C) physical capital has higher returns. 
D) human capital costs more to acquire. 
E) human capital is less productive. 
A) human capital suffers from diminishing marginal returns. 
B) there is no limit to human knowledge or how productive individuals can become. 
C) physical capital has higher returns. 
D) human capital costs more to acquire. 
E) human capital is less productive.

Question 19

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

Accepted Answer

A) equilibrium. 
B) contagion. 
C) transference. 
D) convergence. 
E) externality. 
A) equilibrium. 
B) contagion. 
C) transference. 
D) convergence. 
E) externality.

Question 20

In the Solow growth model

Accepted Answer

A) higher total factor productivity results in no long-run change in consumption per capita. 
B) higher consumption per capita causes the population to increase. 
C) business cycles explain differences in income per capita across countries. 
D) the model predicts that growth ultimately stops and all countries look the same. 
E) a country with higher total factor productivity has higher per capita income. 
A) higher total factor productivity results in no long-run change in consumption per capita. 
B) higher consumption per capita causes the population to increase. 
C) business cycles explain differences in income per capita across countries. 
D) the model predicts that growth ultimately stops and all countries look the same. 
E) a country with higher total factor productivity has higher per capita income.

What can governments do to promote economic development in light of technology adoption barriers?

The endogenous growth models were characterized by

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

In contrast to the Solow growth model, the endogenous growth model

In the endogenous growth model presented in the text, an increase in the fraction of time accumulating human capital

If, in a given country, there is a large effect of the human capital of others on human capital accumulation by each individual, then

Romer's model of endogenous growth is

Barriers to the adoption of new technology causes

For the Solow model to accurately explain the observed divergence of growth experience around the world would require

Government policies that increase the efficiency of the education sector

In the endogenous growth model presented in the text, suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of Human capital accumulation. The growth rate of human capital equals

The government can cause growth to increase in the endogenous growth model by

Total factor productivity growth involves

In the Solow growth model, a country can grow at a higher rate than the population growth rate if

In the endogenous growth models of Lucas and Romer, an increase in a worker's level of human capital

If monopoly power is NOT protected by government

The Solow growth model

Human capital accumulation is different from physical capital accumulation in that

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

In the Solow growth model

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 8: Income Disparity Among Countries and Endogenous Growth

What can governments do to promote economic development in light of technology adoption barriers?

The endogenous growth models were characterized by

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

In contrast to the Solow growth model, the endogenous growth model

In the endogenous growth model presented in the text, an increase in the fraction of time accumulating human capital

If, in a given country, there is a large effect of the human capital of others on human capital accumulation by each individual, then

Romer's model of endogenous growth is

Barriers to the adoption of new technology causes

For the Solow model to accurately explain the observed divergence of growth experience around the world would require

Government policies that increase the efficiency of the education sector

In the endogenous growth model presented in the text, suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of Human capital accumulation. The growth rate of human capital equals

The government can cause growth to increase in the endogenous growth model by

Total factor productivity growth involves

In the Solow growth model, a country can grow at a higher rate than the population growth rate if

In the endogenous growth models of Lucas and Romer, an increase in a worker's level of human capital

If monopoly power is NOT protected by government

The Solow growth model

Human capital accumulation is different from physical capital accumulation in that

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

In the Solow growth model

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters