Question 1

The neoclassical growth model of Robert Solow assumes that all countries are identical in terms of:

Accepted Answer

A)  population. 
B)  technology. 
C)  capital stock. 
D)  labor force. 
A)  population. 
B)  technology. 
C)  capital stock. 
D)  labor force. B

Question 2

Which of the following measures is included in the Human Development Index?

Accepted Answer

A)  healthcare spending 
B)  defense spending 
C)  income per capita 
D)  educational Spending 
A)  healthcare spending 
B)  defense spending 
C)  income per capita 
D)  educational Spending C

Question 3

If everyone in a country earns the same income, then the Gini coefficient of the country will be:

Accepted Answer

A)  0. 
B)  0.5. 
C)  1. 
D)  100. 
A)  0. 
B)  0.5. 
C)  1. 
D)  100. A

Question 4

The production possibility frontier can shift out as a result of all of these EXCEPT an:

Accepted Answer

A)  increase in land. 
B)  increase in labor. 
C)  increase in capacity utilization. 
D)  improvement in technology. 
A)  increase in land. 
B)  increase in labor. 
C)  increase in capacity utilization. 
D)  improvement in technology.

Question 5

The extension of small loans to poor borrowers is known as:

Accepted Answer

A)  microcredit. 
B)  direct credit. 
C)  institutional credit. 
D)  private credit. 
A)  microcredit. 
B)  direct credit. 
C)  institutional credit. 
D)  private credit.

Question 6

Real GDP per capita is the measure of output per person that has been adjusted for:

Accepted Answer

A)  inflation. 
B)  environmental damage. 
C)  depreciation. 
D)  income received from abroad. 
A)  inflation. 
B)  environmental damage. 
C)  depreciation. 
D)  income received from abroad.

Question 7

In the early stages of development, population _____because death rates ____ relative to birth rates.

Accepted Answer

A)  increases; fall 
B)  increases; rise 
C)  decreases; fall 
D)  decreases; rise 
A)  increases; fall 
B)  increases; rise 
C)  decreases; fall 
D)  decreases; rise

Question 8

According to economist Robert Lucas, the reason that physical capital does not flow easily to developing countries is that in developing countries:

Accepted Answer

A)  technology does not exist to use capital. 
B)  marginal product of capital is low. 
C)  human capital levels are lower. 
D)  population levels are lower. 
A)  technology does not exist to use capital. 
B)  marginal product of capital is low. 
C)  human capital levels are lower. 
D)  population levels are lower.

Question 9

The interest rate on business loans in developing countries is typically _____ than those in developed countries, reflecting a _____ demand for loans relative to supply.

Accepted Answer

A)  lower; low 
B)  lower; high 
C)  higher; low 
D)  higher; high 
A)  lower; low 
B)  lower; high 
C)  higher; low 
D)  higher; high

Question 10

An increase in which one of the following will NOT lead to economic growth?

Accepted Answer

A)  physical capital 
B)  human capital 
C)  money supply 
D)  technology 
A)  physical capital 
B)  human capital 
C)  money supply 
D)  technology

Question 11

Which of the following is NOT a reason for a lack of economic growth in developing countries?

Accepted Answer

A)  corruption 
B)  geography 
C)  money supply 
D)  unfit leadership 
A)  corruption 
B)  geography 
C)  money supply 
D)  unfit leadership

Question 12

Based on the neoclassical growth model of Robert Solow, capital should flow from developed countries to developing countries. However, we do not see this happening in the real world. Explain why the Solow model predicts this flow and why this is not observed in the real world.

Accepted Answer

The Solow model predicts that capital fl

Question 13

An increase in which of the following may help countries make more productive use of additional units of physical capital?

Accepted Answer

A)  money supply 
B)  domestic loans 
C)  foreign direct investment 
D)  human capital 
A)  money supply 
B)  domestic loans 
C)  foreign direct investment 
D)  human capital

Question 14

According to the neoclassical growth model of Robert Solow, any difference in productivity between countries arises from differences in:

Accepted Answer

A)  human capital per worker. 
B)  technology. 
C)  physical capital per worker 
D)  population level. 
A)  human capital per worker. 
B)  technology. 
C)  physical capital per worker 
D)  population level.

Question 15

Which of the following is NOT an assumption of Solow's neoclassical growth model?

Accepted Answer

A)  Capital has a diminishing marginal product. 
B)  Countries have different technology. 
C)  Countries have different levels of physical capital. 
D)  Countries have identical levels of human capital. 
A)  Capital has a diminishing marginal product. 
B)  Countries have different technology. 
C)  Countries have different levels of physical capital. 
D)  Countries have identical levels of human capital.

Question 16

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's frontier is PPF2, then which one of the following shifts does NOT represent an increase in capacity utilization?
​
Figure: Economic Growth

Accepted Answer

A)  D to F 
B)  E to F 
C)  C to E 
D)  B to E 
A)  D to F 
B)  E to F 
C)  C to E 
D)  B to E

Question 17

Economic growth refers to an increase in real GDP:

Accepted Answer

A)  per capita resulting from a more efficient use of resources. 
B)  resulting from a decrease in the population. 
C)  resulting from an increase in the productive capacity. 
D)  resulting from a decrease in the amount of environmental damage. 
A)  per capita resulting from a more efficient use of resources. 
B)  resulting from a decrease in the population. 
C)  resulting from an increase in the productive capacity. 
D)  resulting from a decrease in the amount of environmental damage.

Question 18

An increase in capacity utilization is reflected in:

Accepted Answer

A)  an outward shift of the production possibility frontier. 
B)  a movement down and along the production possibility frontier. 
C)  a movement up and along the production possibility frontier. 
D)  a movement from inside the production possibility frontier toward the frontier. 
A)  an outward shift of the production possibility frontier. 
B)  a movement down and along the production possibility frontier. 
C)  a movement up and along the production possibility frontier. 
D)  a movement from inside the production possibility frontier toward the frontier.

Question 19

According to the neoclassical growth model of Robert Solow, countries with a _____ capital per worker will attract additional physical capital.

Accepted Answer

A)  higher level of human 
B)  lower level of human 
C)  higher level of physical 
D)  lower level of physical 
A)  higher level of human 
B)  lower level of human 
C)  higher level of physical 
D)  lower level of physical

Question 20

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF1 and it is operating at point B, then a shift to either _____ represents economic growth.
​
Figure: Economic Growth

Accepted Answer

A)  D or F 
B)  C or E 
C)  D or C 
D)  E or F 
A)  D or F 
B)  C or E 
C)  D or C 
D)  E or F

The neoclassical growth model of Robert Solow assumes that all countries are identical in terms of:

Which of the following measures is included in the Human Development Index?

If everyone in a country earns the same income, then the Gini coefficient of the country will be:

The production possibility frontier can shift out as a result of all of these EXCEPT an:

The extension of small loans to poor borrowers is known as:

Real GDP per capita is the measure of output per person that has been adjusted for:

In the early stages of development, population _because death rates relative to birth rates.

According to economist Robert Lucas, the reason that physical capital does not flow easily to developing countries is that in developing countries:

The interest rate on business loans in developing countries is typically _ than those in developed countries, reflecting a _ demand for loans relative to supply.

An increase in which one of the following will NOT lead to economic growth?

Which of the following is NOT a reason for a lack of economic growth in developing countries?

Based on the neoclassical growth model of Robert Solow, capital should flow from developed countries to developing countries. However, we do not see this happening in the real world. Explain why the Solow model predicts this flow and why this is not observed in the real world.

An increase in which of the following may help countries make more productive use of additional units of physical capital?

According to the neoclassical growth model of Robert Solow, any difference in productivity between countries arises from differences in:

Which of the following is NOT an assumption of Solow's neoclassical growth model?

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's frontier is PPF₂, then which one of the following shifts does NOT represent an increase in capacity utilization? Figure: Economic Growth

Economic growth refers to an increase in real GDP:

An increase in capacity utilization is reflected in:

According to the neoclassical growth model of Robert Solow, countries with a _____ capital per worker will attract additional physical capital.

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF₁ and it is operating at point B, then a shift to either _____ represents economic growth. Figure: Economic Growth

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

International Trade and Finance

Filters

Exam 18: Economic Growth and Development

The neoclassical growth model of Robert Solow assumes that all countries are identical in terms of:

Which of the following measures is included in the Human Development Index?

If everyone in a country earns the same income, then the Gini coefficient of the country will be:

The production possibility frontier can shift out as a result of all of these EXCEPT an:

The extension of small loans to poor borrowers is known as:

Real GDP per capita is the measure of output per person that has been adjusted for:

In the early stages of development, population _____because death rates ____ relative to birth rates.

According to economist Robert Lucas, the reason that physical capital does not flow easily to developing countries is that in developing countries:

The interest rate on business loans in developing countries is typically _____ than those in developed countries, reflecting a _____ demand for loans relative to supply.

An increase in which one of the following will NOT lead to economic growth?

Which of the following is NOT a reason for a lack of economic growth in developing countries?

Based on the neoclassical growth model of Robert Solow, capital should flow from developed countries to developing countries. However, we do not see this happening in the real world. Explain why the Solow model predicts this flow and why this is not observed in the real world.

An increase in which of the following may help countries make more productive use of additional units of physical capital?

According to the neoclassical growth model of Robert Solow, any difference in productivity between countries arises from differences in:

Which of the following is NOT an assumption of Solow's neoclassical growth model?

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's frontier is PPF2, then which one of the following shifts does NOT represent an increase in capacity utilization? ​ Figure: Economic Growth

Economic growth refers to an increase in real GDP:

An increase in capacity utilization is reflected in:

According to the neoclassical growth model of Robert Solow, countries with a _____ capital per worker will attract additional physical capital.

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF1 and it is operating at point B, then a shift to either _____ represents economic growth. ​ Figure: Economic Growth

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

International Trade and Finance

Filters

In the early stages of development, population _because death rates relative to birth rates.

The interest rate on business loans in developing countries is typically _ than those in developed countries, reflecting a _ demand for loans relative to supply.

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's frontier is PPF₂, then which one of the following shifts does NOT represent an increase in capacity utilization? Figure: Economic Growth

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF₁ and it is operating at point B, then a shift to either _____ represents economic growth. Figure: Economic Growth