Question 1

Which of the following countries has the highest level of average educational attainment?

Accepted Answer

A) Canada 
B) Italy 
C) India 
D) Sudan 
A) Canada 
B) Italy 
C) India 
D) Sudan

Question 2

Lower levels of education and training are often associated with low levels of

Accepted Answer

A) production. 
B) productivity. 
C) inflation. 
D) both a and b. 
A) production. 
B) productivity. 
C) inflation. 
D) both a and b.

Question 3

Service sector outputs could be expected to increase in price less than industrial sector outputs as an economy grows.

Accepted Answer

A) True 
 B)False

Question 4

To stimulate investment spending, Congress would most likely decrease

Accepted Answer

A) personal income taxes. 
B) capital gains taxes. 
C) property taxes. 
D) real interest rates. 
A) personal income taxes. 
B) capital gains taxes. 
C) property taxes. 
D) real interest rates.

Question 5

Compared to the 1948 to 1973 period, the period from 1973 to 1995 can be characterized as a period of

Accepted Answer

A) faster real GDP growth. 
B) faster labor productivity growth. 
C) slower labor productivity growth. 
D) lower labor force growth. 
A) faster real GDP growth. 
B) faster labor productivity growth. 
C) slower labor productivity growth. 
D) lower labor force growth.

Question 6

Some politicians argue that reducing the corporate income tax will increase business investment spending.

Accepted Answer

A) True 
 B)False

Question 7

According to the cost disease of the personal services, service activities that require direct personal contact

Accepted Answer

A) tend to fall in price relative to other goods and services. 
B) tend to rise in price relative to other goods and services. 
C) follow price patterns similar to other goods and services. 
D) tend to move up and down in price ignoring the rest of the market. 
A) tend to fall in price relative to other goods and services. 
B) tend to rise in price relative to other goods and services. 
C) follow price patterns similar to other goods and services. 
D) tend to move up and down in price ignoring the rest of the market.

Question 8

The process of innovation is the act of

Accepted Answer

A) discovering a new production process. 
B) discovering a new product. 
C) basic scientific research. 
D) adopting a new product to a market demand. 
A) discovering a new production process. 
B) discovering a new product. 
C) basic scientific research. 
D) adopting a new product to a market demand.

Question 9

Which period of recent U.S.history shows the lowest rates of productivity growth?

Accepted Answer

A) 1948-1973 
B) 1973-1995 
C) 1995-2000 
D) All periods had similar growth rates. 
A) 1948-1973 
B) 1973-1995 
C) 1995-2000 
D) All periods had similar growth rates.

Question 10

Compared to college tuition, the prices of automobiles in the United States have

Accepted Answer

A) fallen. 
B) risen. 
C) stayed the same. 
D) risen at the same rate as the CPI. 
A) fallen. 
B) risen. 
C) stayed the same. 
D) risen at the same rate as the CPI.

Question 11

Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity.Its conclusion was: ​

Accepted Answer

A) ​when poor people are allowed access to the institutinos richer people enjoy, they are ill equipped to take advantage of those benefits 
B) ​when poor people are allowed access to the institutions richer people enjoy, they can thrive and help themselves 
C) ​that there was no measurable difference between the countries that actively encouraged market activity from those that discouraged it. 
D) ​without the proper resources, encouraging market activity had no effect 
A) ​when poor people are allowed access to the institutinos richer people enjoy, they are ill equipped to take advantage of those benefits 
B) ​when poor people are allowed access to the institutions richer people enjoy, they can thrive and help themselves 
C) ​that there was no measurable difference between the countries that actively encouraged market activity from those that discouraged it. 
D) ​without the proper resources, encouraging market activity had no effect

Question 12

The term "human capital" refers to how many people must work to produce a product.

Accepted Answer

A) True 
 B)False

Question 13

The term "capital formation" actually implies adding new equipment to a nation's factories.

Accepted Answer

A) True 
 B)False

Question 14

Technological change in modern societies is most likely the result of increases in

Accepted Answer

A) machine building. 
B) more natural resource use. 
C) education. 
D) the labor force. 
A) machine building. 
B) more natural resource use. 
C) education. 
D) the labor force.

Question 15

Development assistance is designed to encourage a developing country to

Accepted Answer

A) increase consumer goods today. 
B) restrict the inflow of foreign direct investment. 
C) invest in its capital stock. 
D) reduce labor productivity. 
A) increase consumer goods today. 
B) restrict the inflow of foreign direct investment. 
C) invest in its capital stock. 
D) reduce labor productivity.

Question 16

Which of the following would not be classified as capital formation?

Accepted Answer

A) buying shares of stock 
B) building a new warehouse 
C) purchasing new construction equipment 
D) All would be considered capital formation. 
A) buying shares of stock 
B) building a new warehouse 
C) purchasing new construction equipment 
D) All would be considered capital formation.

Question 17

When the difference between potential GDP and actual GDP increases, the nation usually suffers from increased inflation.

Accepted Answer

A) True 
 B)False

Question 18

Which furniture production process would have the highest wage rates?

Accepted Answer

A) furniture made by handsaw and hammer 
B) furniture made with power equipment 
C) furniture made by grade school-educated workers 
D) furniture made in an automated furniture factory 
A) furniture made by handsaw and hammer 
B) furniture made with power equipment 
C) furniture made by grade school-educated workers 
D) furniture made in an automated furniture factory

Question 19

Properly enforced property rights will usually cause

Accepted Answer

A) lower levels of investment spending. 
B) lower levels of real interest rates. 
C) higher levels of investment spending. 
D) higher levels of real interest rates. 
A) lower levels of investment spending. 
B) lower levels of real interest rates. 
C) higher levels of investment spending. 
D) higher levels of real interest rates.

Question 20

The change in the contribution of capital formation was the chief cause of the productivity slowdown in 1973-1995.

Accepted Answer

A) True 
 B)False

Exam 24: Economic Growth: Theory and Policy

Which of the following countries has the highest level of average educational attainment?

Lower levels of education and training are often associated with low levels of

Service sector outputs could be expected to increase in price less than industrial sector outputs as an economy grows.

To stimulate investment spending, Congress would most likely decrease

Compared to the 1948 to 1973 period, the period from 1973 to 1995 can be characterized as a period of

Some politicians argue that reducing the corporate income tax will increase business investment spending.

According to the cost disease of the personal services, service activities that require direct personal contact

The process of innovation is the act of

Which period of recent U.S.history shows the lowest rates of productivity growth?

Compared to college tuition, the prices of automobiles in the United States have

Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity.Its conclusion was: ​

The term "human capital" refers to how many people must work to produce a product.

The term "capital formation" actually implies adding new equipment to a nation's factories.

Technological change in modern societies is most likely the result of increases in

Development assistance is designed to encourage a developing country to

Which of the following would not be classified as capital formation?

When the difference between potential GDP and actual GDP increases, the nation usually suffers from increased inflation.

Which furniture production process would have the highest wage rates?

Properly enforced property rights will usually cause

The change in the contribution of capital formation was the chief cause of the productivity slowdown in 1973-1995.

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

He Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Filters

Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity.Its conclusion was: