Question 1

The major determinant of the rapidity with which an innovation spreads is its

Accepted Answer

A)  durability. 
B)  complexity. 
C)  sex appeal. 
D)  exclusiveness. 
E)  profitability. 
A)  durability. 
B)  complexity. 
C)  sex appeal. 
D)  exclusiveness. 
E)  profitability.

Question 2

Two common measures of the rate of economic growth are the rates of growth of

Accepted Answer

A)  real GDP and real per capita GDP. 
B)  income and consumption. 
C)  full-time unemployment and prices. 
D)  the money supply and income. 
E)  real population and full-time employment. 
A)  real GDP and real per capita GDP. 
B)  income and consumption. 
C)  full-time unemployment and prices. 
D)  the money supply and income. 
E)  real population and full-time employment.

Question 3

In essence,the Corn Laws

Accepted Answer

A)  lowered the profits of landlords. 
B)  imposed high tariffs on grain. 
C)  were designed to benefit industrialists by ensuring low agricultural prices. 
D)  were written to encourage the substitution of British corn for U.S. and Canadian wheat. 
E)  provided poor people in England with free grain. 
A)  lowered the profits of landlords. 
B)  imposed high tariffs on grain. 
C)  were designed to benefit industrialists by ensuring low agricultural prices. 
D)  were written to encourage the substitution of British corn for U.S. and Canadian wheat. 
E)  provided poor people in England with free grain.

Question 4

Thomas Malthus felt the human population was in danger of outrunning its food supply because

Accepted Answer

A)  he thought population would increase at a geometric rate while land remained essentially fixed in supply. 
B)  environmental pollution would eventually decrease the efficiency of agriculture. 
C)  the expected standard of living grows over time. 
D)  profits were insufficient to induce farmers to use their land properly. 
E)  the production possibilities curve shifts inward as population increases. 
A)  he thought population would increase at a geometric rate while land remained essentially fixed in supply. 
B)  environmental pollution would eventually decrease the efficiency of agriculture. 
C)  the expected standard of living grows over time. 
D)  profits were insufficient to induce farmers to use their land properly. 
E)  the production possibilities curve shifts inward as population increases.

Question 5

In an economy with a GDP of $3,000 billion and a capital-output ratio of three,an increase in this year's full-employment GDP of $30 billion means that last year's intended investment must have increased by ________ billion.

Accepted Answer

A)  $10 
B)  $30 
C)  $90 
D)  $100 
E)  $1,000 
A)  $10 
B)  $30 
C)  $90 
D)  $100 
E)  $1,000

Question 6

The essence of Ricardo's argument against the Corn Laws was that

Accepted Answer

A)  each country should specialize in those products it is relatively most efficient at producing. 
B)  an increase in the tariff on grain would be profitable for industrialists. 
C)  population tends to increase to the subsistence point. 
D)  a repeal of the Corn Laws would improve the climate for agricultural landlords. 
E)  industrialists are more deserving than workers. 
A)  each country should specialize in those products it is relatively most efficient at producing. 
B)  an increase in the tariff on grain would be profitable for industrialists. 
C)  population tends to increase to the subsistence point. 
D)  a repeal of the Corn Laws would improve the climate for agricultural landlords. 
E)  industrialists are more deserving than workers.

Question 7

Which of the following is the best example of an innovation?

Accepted Answer

A)  Boeing introduces computer-assisted design and manufacturing to the aircraft industry. 
B)  GM brings out its version of a minivan to compete with Chrysler's. 
C)  Exxon introduces a higher-octane grade of unleaded gas. 
D)  McDonald's increases the size of its hamburger. 
E)  Microsoft updates its Windows operating system. 
A)  Boeing introduces computer-assisted design and manufacturing to the aircraft industry. 
B)  GM brings out its version of a minivan to compete with Chrysler's. 
C)  Exxon introduces a higher-octane grade of unleaded gas. 
D)  McDonald's increases the size of its hamburger. 
E)  Microsoft updates its Windows operating system.

Question 8

An element of economic welfare that is NOT effectively captured in measurements of real per capita GDP is

Accepted Answer

A)  population growth. 
B)  output. 
C)  income. 
D)  inflation. 
E)  leisure. 
A)  population growth. 
B)  output. 
C)  income. 
D)  inflation. 
E)  leisure.

Question 9

Improvements in agricultural technology will

Accepted Answer

A)  raise the price of food. 
B)  lower the total product of labor. 
C)  raise the marginal product of labor. 
D)  lower the output of food. 
E)  raise the rate of starvation. 
A)  raise the price of food. 
B)  lower the total product of labor. 
C)  raise the marginal product of labor. 
D)  lower the output of food. 
E)  raise the rate of starvation.

Question 10

The Malthusian forecast that population growth would outrun the food supply can be explained in terms of

Accepted Answer

A)  Say's law. 
B)  the law of diminishing marginal returns. 
C)  the law of the jungle. 
D)  the law of demand. 
E)  Gresham's law. 
A)  Say's law. 
B)  the law of diminishing marginal returns. 
C)  the law of the jungle. 
D)  the law of demand. 
E)  Gresham's law.

Question 11

Ricardo,in his work on income distribution,emphasized the struggle between

Accepted Answer

A)  workers and industrialists. 
B)  landowners and the aristocracy. 
C)  England and Spain. 
D)  farmers and workers. 
E)  industrialists and landowners. 
A)  workers and industrialists. 
B)  landowners and the aristocracy. 
C)  England and Spain. 
D)  farmers and workers. 
E)  industrialists and landowners.

Question 12

An element of economic welfare that is NOT effectively captured in growth measurements of real per capita GDP is

Accepted Answer

A)  the rate of inflation. 
B)  new products and improvements in the quality of goods and services. 
C)  population growth. 
D)  a change in the price level. 
E)  a change in the growth of output. 
A)  the rate of inflation. 
B)  new products and improvements in the quality of goods and services. 
C)  population growth. 
D)  a change in the price level. 
E)  a change in the growth of output.

Question 13

Investment in education enhances the rate of economic growth

Accepted Answer

A)  because most of the important research and development is carried out in university laboratories. 
B)  by educating people about the evils of materialism and the need to redistribute income. 
C)  because the highest rates of labor-force productivity are found in educational institutions. 
D)  by training scientists, engineers, and industrial managers. 
E)  because of its tendency to use endowment funds to invest in new technologies. 
A)  because most of the important research and development is carried out in university laboratories. 
B)  by educating people about the evils of materialism and the need to redistribute income. 
C)  because the highest rates of labor-force productivity are found in educational institutions. 
D)  by training scientists, engineers, and industrial managers. 
E)  because of its tendency to use endowment funds to invest in new technologies.

Question 14

The Harrod-Domar growth model

Accepted Answer

A)  expresses the growth rate of GDP as a function of the proportion of GDP saved, divided by the capital-output ratio. 
B)  indicates that full-employment GDP will grow faster as the capital-output ratio in the economy rises. 
C)  requires the capital-output ratio to grow if the economy is to increase to its full-employment GDP. 
D)  expresses the rate of growth of GDP as an inverse function of the savings rate. 
E)  indicates that full-employment GDP will grow only if the savings rate declines while the capital-output ratio increases. 
A)  expresses the growth rate of GDP as a function of the proportion of GDP saved, divided by the capital-output ratio. 
B)  indicates that full-employment GDP will grow faster as the capital-output ratio in the economy rises. 
C)  requires the capital-output ratio to grow if the economy is to increase to its full-employment GDP. 
D)  expresses the rate of growth of GDP as an inverse function of the savings rate. 
E)  indicates that full-employment GDP will grow only if the savings rate declines while the capital-output ratio increases.

Question 15

________ stressed the importance of innovation in the process of economic growth.

Accepted Answer

A)  Joseph Schumpeter 
B)  Karl Marx 
C)  Thomas Malthus 
D)  David Ricardo 
E)  Adam Smith 
A)  Joseph Schumpeter 
B)  Karl Marx 
C)  Thomas Malthus 
D)  David Ricardo 
E)  Adam Smith

Question 16

If the capital-output ratio is three,the full-employment GDP is $5,100 billion,and intended investment is $750 billion,then a $60 billion increase in intended investment will increase full-employment GDP by ________ billion.

Accepted Answer

A)  $250 
B)  $180 
C)  $60 
D)  $50 
E)  $20 
A)  $250 
B)  $180 
C)  $60 
D)  $50 
E)  $20

Question 17

Innovation is

Accepted Answer

A)  the application of a new technology for the first time. 
B)  another name for technological change. 
C)  the application of existing technologies to low-risk projects. 
D)  the reward for risk taking. 
E)  a basic managerial technique necessary at all levels of management. 
A)  the application of a new technology for the first time. 
B)  another name for technological change. 
C)  the application of existing technologies to low-risk projects. 
D)  the reward for risk taking. 
E)  a basic managerial technique necessary at all levels of management.

Question 18

Successful innovations are generally imitated by others,causing the

Accepted Answer

A)  production possibilities curve to shift to the left. 
B)  marginal product of capital curve to shift to the left. 
C)  profits of the innovator to decline. 
D)  output rate per worker to fall. 
E)  quality of output to fall. 
A)  production possibilities curve to shift to the left. 
B)  marginal product of capital curve to shift to the left. 
C)  profits of the innovator to decline. 
D)  output rate per worker to fall. 
E)  quality of output to fall.

Question 19

Empirical evidence from industrialized countries on the relationship between population growth and output

Accepted Answer

A)  clearly supports the Malthusian conclusions. 
B)  suggests little or no relationship between the rates of population growth and output per person per year. 
C)  refutes the law of diminishing returns. 
D)  indicates that labor-intensive production techniques are more efficient. 
E)  suggests that technology has had a minimal impact on economic growth. 
A)  clearly supports the Malthusian conclusions. 
B)  suggests little or no relationship between the rates of population growth and output per person per year. 
C)  refutes the law of diminishing returns. 
D)  indicates that labor-intensive production techniques are more efficient. 
E)  suggests that technology has had a minimal impact on economic growth.

Question 20

Educational expenditures may be viewed as an investment process when

Accepted Answer

A)  the money spent increases the current income to teachers and other related professionals. 
B)  college tuition expenses are tax deductible. 
C)  future gains in productivity follow from the sacrifice of current production and consumption. 
D)  intellectual depreciation is counted as part of GDP. 
E)  such expenditures represent a noticeable share of our GDP. 
A)  the money spent increases the current income to teachers and other related professionals. 
B)  college tuition expenses are tax deductible. 
C)  future gains in productivity follow from the sacrifice of current production and consumption. 
D)  intellectual depreciation is counted as part of GDP. 
E)  such expenditures represent a noticeable share of our GDP.

Exam 13: Economic Growth

The major determinant of the rapidity with which an innovation spreads is its

Two common measures of the rate of economic growth are the rates of growth of

In essence,the Corn Laws

Thomas Malthus felt the human population was in danger of outrunning its food supply because

In an economy with a GDP of $3,000 billion and a capital-output ratio of three,an increase in this year's full-employment GDP of $30 billion means that last year's intended investment must have increased by ________ billion.

The essence of Ricardo's argument against the Corn Laws was that

Which of the following is the best example of an innovation?

An element of economic welfare that is NOT effectively captured in measurements of real per capita GDP is

Improvements in agricultural technology will

The Malthusian forecast that population growth would outrun the food supply can be explained in terms of

Ricardo,in his work on income distribution,emphasized the struggle between

An element of economic welfare that is NOT effectively captured in growth measurements of real per capita GDP is

Investment in education enhances the rate of economic growth

The Harrod-Domar growth model

________ stressed the importance of innovation in the process of economic growth.

If the capital-output ratio is three,the full-employment GDP is $5,100 billion,and intended investment is $750 billion,then a $60 billion increase in intended investment will increase full-employment GDP by ________ billion.

Innovation is

Successful innovations are generally imitated by others,causing the

Empirical evidence from industrialized countries on the relationship between population growth and output

Educational expenditures may be viewed as an investment process when

What is Economics

Markets and Prices

The Business Firm: Organization,motivation,and Optimal Input Decisions

Getting Behind the Demand and Supply Curves

Market Demand and Price Elasticity

Economic Efficiency,market Supply,and Perfect Competition

Monopoly and Its Regulation

Monopolistic Competition,oligopoly,and Antitrust Policy

Pollution and the Environment

The Supply and Demand for Labor

Interest,rent,and Profit

Poverty,income Inequality,and Discrimination

Public Goods and the Role of the Government

National Income and Product

Business Fluctuations and Unemployment

The Determination of National Output and the Keynesian Multiplier

Fiscal Policy and National Output

Inflation

Money and the Banking System

The Federal Reserve and Monetary Policy

Supply Shocks and Inflation

Productivity,growth,and Technology Policy

Surpluses,deficits,public Debt,and the Federal Budget

Monetary Policy,interest Rates,and Economic Activity

Controversies Over Stabilization Policy

International Trade

Exchange Rates and the Balance of Payments

Filters