Question 1

Which of the following statements is correct?

Accepted Answer

A)  The U.S. population has increased more rapidly than real GDP in recent decades. 
B)  Improved education and training of labor is the most important source of U.S. productivity growth. 
C)  The average American factory worker has about 16 years of formal education. 
D)  The amount of real capital used per worker has increased historically in the United States. 
A)  The U.S. population has increased more rapidly than real GDP in recent decades. 
B)  Improved education and training of labor is the most important source of U.S. productivity growth. 
C)  The average American factory worker has about 16 years of formal education. 
D)  The amount of real capital used per worker has increased historically in the United States.

Question 2

Are countries that began modern economic growth more recently doomed to be permanently
poorer than the countries that began modern economic growth in earlier periods? Explain.

Accepted Answer

No, catching up is possible. As leader c

Question 3

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 4

(Consider This) The Consider This box on patents and innovation demonstrates that

Accepted Answer

A)  patent protection for U.S. companies may not be as effective when other countries do not respect or enforce U.S. patent laws. 
B)  patent laws are relatively uniform across nations. 
C)  countries like India have no incentive to enact or enforce patent laws. 
D)  follower countries tend to have stronger patent laws than leader countries. 
A)  patent protection for U.S. companies may not be as effective when other countries do not respect or enforce U.S. patent laws. 
B)  patent laws are relatively uniform across nations. 
C)  countries like India have no incentive to enact or enforce patent laws. 
D)  follower countries tend to have stronger patent laws than leader countries.

Question 5

Society can increase its output and income by increasing basically one or both of two factors:

Accepted Answer

A)  its spending and investment. 
B)  its private and public sectors of the economy. 
C)  its resources and the productivity of the resources. 
D)  its markets and prices. 
A)  its spending and investment. 
B)  its private and public sectors of the economy. 
C)  its resources and the productivity of the resources. 
D)  its markets and prices.

Question 6

Which of the following arguments is not made by critics of growth policies?

Accepted Answer

A)  Growth has resulted in resource degradation and pollution. 
B)  Sociological problems like poverty have not been solved by growth. 
C)  Growth may have given us the good life, but we cannot better it anymore. 
D)  Rapid growth is not sustainable in the long term due to resource limitations. 
A)  Growth has resulted in resource degradation and pollution. 
B)  Sociological problems like poverty have not been solved by growth. 
C)  Growth may have given us the good life, but we cannot better it anymore. 
D)  Rapid growth is not sustainable in the long term due to resource limitations.

Question 7

(Last Word) From 1960 to today, women's labor-force participation rate in the U.S.

Accepted Answer

A)  stayed relatively stable at 50 percent. 
B)  increased from about 40 percent to 60 percent. 
C)  fell from 50 percent to 40 percent. 
D)  increased slightly from 60 percent to 65 percent. 
A)  stayed relatively stable at 50 percent. 
B)  increased from about 40 percent to 60 percent. 
C)  fell from 50 percent to 40 percent. 
D)  increased slightly from 60 percent to 65 percent.

Question 8

Increases in the value of the product to each user, including existing users, as the total number of users rises are called

Accepted Answer

A)  network effects. 
B)  simultaneous consumption. 
C)  learning by doing. 
D)  the spreading of development costs. 
A)  network effects. 
B)  simultaneous consumption. 
C)  learning by doing. 
D)  the spreading of development costs.

Question 9

Summarize the antigrowth view of economic growth.

Accepted Answer

The antigrowth view is that industrializ

Question 10

One hypothesis for declining productivity growth rates since the Great Recession is that
technological progress has been so rapid that ﬁrms have not been able to keep up in terms of
investment.

Accepted Answer

A) True 
 B)False

Question 11

The pattern of productivity growth in the U.S. in the period 2010-2018, when compared to previous periods, suggests that

Accepted Answer

A)  businesses are investing in new technologies at an accelerating rate compared to previous periods. 
B)  businesses are slowing down in their implementation of new productive technologies. 
C)  consumers are spending a lot more on domestically produced goods and on new gadgets. 
D)  there has been a sharp increase in the inﬂux of immigrant workers into the country. 
A)  businesses are investing in new technologies at an accelerating rate compared to previous periods. 
B)  businesses are slowing down in their implementation of new productive technologies. 
C)  consumers are spending a lot more on domestically produced goods and on new gadgets. 
D)  there has been a sharp increase in the inﬂux of immigrant workers into the country.

Question 12

Which of the following is the single most important source of U.S. economic growth?

Accepted Answer

A)  stability of the socio-cultural-political environment 
B)  improvement in the legal and human environment 
C)  increases in the quantity of labor 
D)  increases in labor productivity 
A)  stability of the socio-cultural-political environment 
B)  improvement in the legal and human environment 
C)  increases in the quantity of labor 
D)  increases in labor productivity

Question 13

Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's

Accepted Answer

A)  real GDP remained constant. 
B)  capital stock increased by 3 percent. 
C)  production possibilities curve shifted inward. 
D)  production possibilities curve shifted outward. 
A)  real GDP remained constant. 
B)  capital stock increased by 3 percent. 
C)  production possibilities curve shifted inward. 
D)  production possibilities curve shifted outward.

Question 14

Leader countries that experience modern economic growth early on will always grow faster than
follower countries.

Accepted Answer

A) True 
 B)False

Question 15

Compared with the period from 1973 to 1995, the annual rate of productivity growth from 1995 to 2010 was about

Accepted Answer

A)  the same. 
B)  2 times faster. 
C)  ﬁve times faster. 
D)  10 percent slower. 
A)  the same. 
B)  2 times faster. 
C)  ﬁve times faster. 
D)  10 percent slower.

Question 16

Which of the following is not an explanation put forward to explain the recent productivity slowdown?

Accepted Answer

A)  Consumers and ﬁrms are paying down high levels of debt instead of investing in productive projects. 
B)  Overinvestment during the boom that preceded the Great Recession created overcapacity. 
C)  Technological progress itself may have stalled, until invention and innovation levels bounce back. 
D)  A massive inﬂux of immigrant labor has caused the labor force to expand much faster than real GDP. 
A)  Consumers and ﬁrms are paying down high levels of debt instead of investing in productive projects. 
B)  Overinvestment during the boom that preceded the Great Recession created overcapacity. 
C)  Technological progress itself may have stalled, until invention and innovation levels bounce back. 
D)  A massive inﬂux of immigrant labor has caused the labor force to expand much faster than real GDP.

Question 17

A nation's real GDP was $250 billion in Year 1 and $265 billion in Year 2. Its population was 120 million in Year 1 and 125 million in Year 2. What is its real GDP per capita in Year 2?

Accepted Answer

A)  $2,120 per person 
B)  $212 per person 
C)  $21,200 per person 
D)  $205 per person 
A)  $2,120 per person 
B)  $212 per person 
C)  $21,200 per person 
D)  $205 per person

Question 18

Leader countries tend to have higher growth rates than follower countries.

Accepted Answer

A) True 
 B)False

Question 19

A major effect of the rise in the rate of productivity growth in the United States is a(n)

Accepted Answer

A)  rise in the rate of inﬂation. 
B)  rise in the growth of living standards. 
C)  increase in the relative prices of U.S. goods in foreign markets. 
D)  increase in the competitiveness of U.S. goods in foreign markets. 
A)  rise in the rate of inﬂation. 
B)  rise in the growth of living standards. 
C)  increase in the relative prices of U.S. goods in foreign markets. 
D)  increase in the competitiveness of U.S. goods in foreign markets.

Question 20

In the U.S. economic-growth experience,

Accepted Answer

A)  most capital substitutes for labor. 
B)  most capital is complementary to labor. 
C)  the amount of capital available per worker has been relatively constant. 
D)  the amount of capital available per worker has been decreasing. 
A)  most capital substitutes for labor. 
B)  most capital is complementary to labor. 
C)  the amount of capital available per worker has been relatively constant. 
D)  the amount of capital available per worker has been decreasing.

Exam 8: Economic Growth

Which of the following statements is correct?

Are countries that began modern economic growth more recently doomed to be permanently poorer than the countries that began modern economic growth in earlier periods? Explain.

Economic growth rates in follower countries

(Consider This) The Consider This box on patents and innovation demonstrates that

Society can increase its output and income by increasing basically one or both of two factors:

Which of the following arguments is not made by critics of growth policies?

(Last Word) From 1960 to today, women's labor-force participation rate in the U.S.

Increases in the value of the product to each user, including existing users, as the total number of users rises are called

Summarize the antigrowth view of economic growth.

One hypothesis for declining productivity growth rates since the Great Recession is that technological progress has been so rapid that ﬁrms have not been able to keep up in terms of investment.

The pattern of productivity growth in the U.S. in the period 2010-2018, when compared to previous periods, suggests that

Which of the following is the single most important source of U.S. economic growth?

Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's

Leader countries that experience modern economic growth early on will always grow faster than follower countries.

Compared with the period from 1973 to 1995, the annual rate of productivity growth from 1995 to 2010 was about

Which of the following is not an explanation put forward to explain the recent productivity slowdown?

A nation's real GDP was $250 billion in Year 1 and $265 billion in Year 2. Its population was 120 million in Year 1 and 125 million in Year 2. What is its real GDP per capita in Year 2?

Leader countries tend to have higher growth rates than follower countries.

A major effect of the rise in the rate of productivity growth in the United States is a(n)

In the U.S. economic-growth experience,

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Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

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The Aggregate Expenditures Model

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