Question 1

What is the effect of a country not enforcing property rights?

Accepted Answer

A) The market system will still work smoothly. 
B) That country will grow more rapidly because of the reduction of law suits. 
C) That country's growth rate will not be affected. 
D) Entrepreneurs are not likely to risk their own funds investing in such an economy. 
A) The market system will still work smoothly. 
B) That country will grow more rapidly because of the reduction of law suits. 
C) That country's growth rate will not be affected. 
D) Entrepreneurs are not likely to risk their own funds investing in such an economy.

Question 2

Which of the following policies is the most direct way to enhance human capital in the economy?

Accepted Answer

A) increased vaccinations against infectious diseases 
B) political reform to decrease corruption 
C) stronger laws to protect property rights 
D) relaxation of regulations that limit foreign direct investment 
A) increased vaccinations against infectious diseases 
B) political reform to decrease corruption 
C) stronger laws to protect property rights 
D) relaxation of regulations that limit foreign direct investment

Question 3

High oil prices consistently explain why productivity growth rates slow down.

Accepted Answer

A) True 
 B)False

Question 4

According to Joseph Schumpeter (1942), the 'theory of creative destruction' describes a process by which:

Accepted Answer

A) new products unleash a gale of destruction that creates other new products. 
B) new products unleash a gale of destruction that drives old products out of the market. 
C) new products are created by the destruction of capital. 
D) the creation of new products never involves the destruction of old products. 
A) new products unleash a gale of destruction that creates other new products. 
B) new products unleash a gale of destruction that drives old products out of the market. 
C) new products are created by the destruction of capital. 
D) the creation of new products never involves the destruction of old products.

Question 5

As predicted by the economic growth model, countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita.

Accepted Answer

A) True 
 B)False

Question 6

Some economists argued that the productivity slowdown of the mid-1970s to the early 1990s was due to changes in oil prices that:

Accepted Answer

A) increased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker. 
B) decreased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker. 
C) increased production costs, causing firms to reorganise production to conserve energy, which increased output per worker. 
D) decreased production costs, causing firms to increase production, which reduced output per worker. 
A) increased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker. 
B) decreased production costs, causing firms to reorganise production to conserve energy, which reduced output per worker. 
C) increased production costs, causing firms to reorganise production to conserve energy, which increased output per worker. 
D) decreased production costs, causing firms to increase production, which reduced output per worker.

Question 7

Which of the following is true about 'new growth theory'?

Accepted Answer

A) It states that the rate of technological change is determined outside the working of the market system. 
B) It does not adequately explain the factors that determine productivity. 
C) It states that the rate of technological change is unaffected by economic incentives. 
D) It states that the rate of technological change is caused by economic incentives. 
A) It states that the rate of technological change is determined outside the working of the market system. 
B) It does not adequately explain the factors that determine productivity. 
C) It states that the rate of technological change is unaffected by economic incentives. 
D) It states that the rate of technological change is caused by economic incentives.

Question 8

If a country's real GDP is rising by 4% per year while its population is rising at 3% per year, which of the following is true?

Accepted Answer

A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population. 
A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population.

Question 9

What is the easiest way for a country to obtain access to technology?

Accepted Answer

A) subsidising education and training 
B) promoting policies to enhance savings 
C) promoting foreign direct investment 
D) enacting policies to promote property rights 
A) subsidising education and training 
B) promoting policies to enhance savings 
C) promoting foreign direct investment 
D) enacting policies to promote property rights

Question 10

What changes are explained by an economic growth model?

Accepted Answer

A) Real GDP per capita in the long run 
B) Nominal GDP per capita in the long run 
C) Real GDP per capita in the short run 
D) Nominal GDP per capita in the short run 
A) Real GDP per capita in the long run 
B) Nominal GDP per capita in the long run 
C) Real GDP per capita in the short run 
D) Nominal GDP per capita in the short run

Question 11

How do economic growth rates affect a nation's standard of living?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The speed at which an economy grows dete

Question 12

An example of foreign direct investment is when an Italian company:

Accepted Answer

A) purchases 1 000 shares of stock issued by an American company. 
B) opens a new Italian factory. 
C) purchases shares issued in Italy. 
D) opens a new factory in Australia. 
A) purchases 1 000 shares of stock issued by an American company. 
B) opens a new Italian factory. 
C) purchases shares issued in Italy. 
D) opens a new factory in Australia.

Question 13

Because 'knowledge capital' is non-excludable and non-rival, firms have an incentive to ________ the research and development of other firms.

Accepted Answer

A) make bids on 
B) not use 
C) ignore 
D) 'free ride' on 
A) make bids on 
B) not use 
C) ignore 
D) 'free ride' on

Question 14

Which of the following countries was identified as a newly industrialising country in the 1980s and1990s, but is not identified as high-income country?

Accepted Answer

A) United States 
B) Australia 
C) Hong Kong 
D) Brazil 
A) United States 
B) Australia 
C) Hong Kong 
D) Brazil

Question 15

Your friend owns an ice cream stand which he works by himself. He produces about 25 ice creams per hour. He wants to be able to produce twice as many ice creams per hour so he buys a second machine. He notices that he can only produce 10 more ice creams an hour. He jokes that he could have doubled his output with the second machine if he only had four hands. Using your knowledge of the production process, explain to your friend what you think has happened when he added more capital to his production process.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The second machine does not add as much

Question 16

Refer to Figure 6.1 for the following questions.
Figure 6.1
  
-The movement from A to D in Figure 6.1 illustrates:

Accepted Answer

A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labour. 
A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labour.

Question 17

Use the following table to calculate the average annual growth rate in GDP. Also calculate the total percentage change in growth from 2015 to 2018. Explain the difference between the average annual growth rate in real per capita GDP from 2015 to 2018 and the total percentage change in growth from 2015 to 2018.
   
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

We calculate the average annual per cent

Question 18

According to 'new growth theory', the market will lead firms to accumulate the efficient level of knowledge capital.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not an explanation for the revival in the growth of productivity starting in Australia in the early 1990s?

Accepted Answer

A) Information and communication innovations that were increasingly geared toward improving business processes and not consumer products. 
B) High productivity growth in the agricultural sector. 
C) Internet use that had increased the efficiency of how firms buy and sell to each other and to consumers. 
D) Mobile phones and wireless Internet access increased worker flexibility. 
A) Information and communication innovations that were increasingly geared toward improving business processes and not consumer products. 
B) High productivity growth in the agricultural sector. 
C) Internet use that had increased the efficiency of how firms buy and sell to each other and to consumers. 
D) Mobile phones and wireless Internet access increased worker flexibility.

Question 20

What do economists call the small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s?

Accepted Answer

A) education deprived countries 
B) countries with low standards of living 
C) newly industrialising countries 
D) industrial countries 
A) education deprived countries 
B) countries with low standards of living 
C) newly industrialising countries 
D) industrial countries

What is the effect of a country not enforcing property rights?

Which of the following policies is the most direct way to enhance human capital in the economy?

High oil prices consistently explain why productivity growth rates slow down.

According to Joseph Schumpeter (1942), the 'theory of creative destruction' describes a process by which:

As predicted by the economic growth model, countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita.

Some economists argued that the productivity slowdown of the mid-1970s to the early 1990s was due to changes in oil prices that:

Which of the following is true about 'new growth theory'?

If a country's real GDP is rising by 4% per year while its population is rising at 3% per year, which of the following is true?

What is the easiest way for a country to obtain access to technology?

What changes are explained by an economic growth model?

How do economic growth rates affect a nation's standard of living? _ _

An example of foreign direct investment is when an Italian company:

Because 'knowledge capital' is non-excludable and non-rival, firms have an incentive to ________ the research and development of other firms.

Which of the following countries was identified as a newly industrialising country in the 1980s and1990s, but is not identified as high-income country?

Refer to Figure 6.1 for the following questions. Figure 6.1 -The movement from A to D in Figure 6.1 illustrates:

According to 'new growth theory', the market will lead firms to accumulate the efficient level of knowledge capital.

Which of the following is not an explanation for the revival in the growth of productivity starting in Australia in the early 1990s?

What do economists call the small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s?

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 6: Long-Run Economic Growth: Sources and Policies

What is the effect of a country not enforcing property rights?

Which of the following policies is the most direct way to enhance human capital in the economy?

High oil prices consistently explain why productivity growth rates slow down.

According to Joseph Schumpeter (1942), the 'theory of creative destruction' describes a process by which:

As predicted by the economic growth model, countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita.

Some economists argued that the productivity slowdown of the mid-1970s to the early 1990s was due to changes in oil prices that:

Which of the following is true about 'new growth theory'?

If a country's real GDP is rising by 4% per year while its population is rising at 3% per year, which of the following is true?

What is the easiest way for a country to obtain access to technology?

What changes are explained by an economic growth model?

How do economic growth rates affect a nation's standard of living? _____________________________________________________________________________________________ _____________________________________________________________________________________________

An example of foreign direct investment is when an Italian company:

Because 'knowledge capital' is non-excludable and non-rival, firms have an incentive to ________ the research and development of other firms.

Which of the following countries was identified as a newly industrialising country in the 1980s and1990s, but is not identified as high-income country?

Refer to Figure 6.1 for the following questions. Figure 6.1 -The movement from A to D in Figure 6.1 illustrates:

According to 'new growth theory', the market will lead firms to accumulate the efficient level of knowledge capital.

Which of the following is not an explanation for the revival in the growth of productivity starting in Australia in the early 1990s?

What do economists call the small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s?

Economics: Foundations and Models

Choices and Trade Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Gdp: Measuring Total Production, Income and Economic Growth

Economic Growth, the Financial System and Business Cycles

Unemployment

Inflation

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

How do economic growth rates affect a nation's standard of living? _ _