Question 1

An assumption of the new growth theory is that

Accepted Answer

A) people earn a subsistence real wage in the long run. 
B) all technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) the growth rate of labour productivity depends on people's ability to innovate. 
E) technological advances encourage international trade. 
A) people earn a subsistence real wage in the long run. 
B) all technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) the growth rate of labour productivity depends on people's ability to innovate. 
E) technological advances encourage international trade. D

Question 2

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person is 10 percent a year, how long will it take the country's real GDP per person to double?

Accepted Answer

A) 0.7 years 
B) 1 year 
C) 10 years 
D) 49 years 
E) 7 years 
A) 0.7 years 
B) 1 year 
C) 10 years 
D) 49 years 
E) 7 years E

Question 3

Labour productivity grows as

Accepted Answer

A) consumption expenditure increases. 
B) depreciation increases. 
C) physical capital grows. 
D) human capital grows. 
E) Both C and D are correct. 
A) consumption expenditure increases. 
B) depreciation increases. 
C) physical capital grows. 
D) human capital grows. 
E) Both C and D are correct. E

Question 4

Use the information below to answer the following questions.
Fact 22.2.1
China was the largest economy for centuries because everyone had the same type of economy-subsistence-and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.
-Consider Fact 22.2.1. In 1890, the United States surpassed China to become the world's largest economy because

Accepted Answer

A) the benefits of the Industrial Revolution were greater in the United States than in China. 
B) the United states was a strong, united country following the Civil War and reconstruction. 
C) the U.S. population growth rate was much lower than China's population growth rate. 
D) the U.S. population exceeded China's population. 
E) China began to import a significant portion of life-sustaining goods and services. 
A) the benefits of the Industrial Revolution were greater in the United States than in China. 
B) the United states was a strong, united country following the Civil War and reconstruction. 
C) the U.S. population growth rate was much lower than China's population growth rate. 
D) the U.S. population exceeded China's population. 
E) China began to import a significant portion of life-sustaining goods and services.

Question 5

All of the following statements are included in new growth theory except

Accepted Answer

A) discoveries are a public capital good. 
B) discoveries result from choices. 
C) the forces of competition destroy incentives to make new discoveries. 
D) discoveries bring profit, and competition destroys profit. 
E) knowledge is capital that is not subject to the law of diminishing returns. 
A) discoveries are a public capital good. 
B) discoveries result from choices. 
C) the forces of competition destroy incentives to make new discoveries. 
D) discoveries bring profit, and competition destroys profit. 
E) knowledge is capital that is not subject to the law of diminishing returns.

Question 6

Between 1926 and 2014, the average growth rate of real GDP per person in Canada was ________ percent a year. During this period, ________ grew at a faster rate than the population.

Accepted Answer

A) 2.0; GDP; 
B) 2.0; real GDP 
C) 1.0; inflation 
D) 3.0; real GDP 
E) 3.0; GDP 
A) 2.0; GDP; 
B) 2.0; real GDP 
C) 1.0; inflation 
D) 3.0; real GDP 
E) 3.0; GDP

Question 7

Human capital is the

Accepted Answer

A) machinery used by humans to produce GDP. 
B) technology used by humans to produce GDP. 
C) skill and knowledge accumulated by humans. 
D) plant and equipment produced by humans and not by machines. 
E) technology used by humans to produce real GDP. 
A) machinery used by humans to produce GDP. 
B) technology used by humans to produce GDP. 
C) skill and knowledge accumulated by humans. 
D) plant and equipment produced by humans and not by machines. 
E) technology used by humans to produce real GDP.

Question 8

If real GDP is $800 million and aggregate labour hours are 20 million, labour productivity is

Accepted Answer

A) $40 an hour. 
B) $16,000 million. 
C) $40 million. 
D) $160 an hour. 
E) $16 an hour. 
A) $40 an hour. 
B) $16,000 million. 
C) $40 million. 
D) $160 an hour. 
E) $16 an hour.

Question 9

When the quantity of labour demanded exceeds the quantity of labour supplied, the real wage rate

Accepted Answer

A) rises to eliminate the labour market shortage. 
B) falls to eliminate the labour market surplus. 
C) rises to eliminate the labour market surplus. 
D) falls to eliminate the labour market shortage. 
E) does not change, but the money wage rate rises to eliminate the labour market shortage. 
A) rises to eliminate the labour market shortage. 
B) falls to eliminate the labour market surplus. 
C) rises to eliminate the labour market surplus. 
D) falls to eliminate the labour market shortage. 
E) does not change, but the money wage rate rises to eliminate the labour market shortage.

Question 10

The aggregate production function shows how ________ varies with ________.

Accepted Answer

A) real GDP; labour 
B) labour; leisure 
C) real GDP; leisure 
D) labour; capital 
E) real GDP; capital 
A) real GDP; labour 
B) labour; leisure 
C) real GDP; leisure 
D) labour; capital 
E) real GDP; capital

Question 11

The key difference between the neoclassical growth theory and the new growth theory is that

Accepted Answer

A) capital is not subject to diminishing returns under new growth theory. 
B) capital is subject to diminishing returns under new growth theory. 
C) increases in population drive workers' incomes back down to the subsistence level in neoclassical growth theory. 
D) the pace of technological advances are caused by chance in new growth theory. 
E) labour productivity grows indefinitely in neoclassical growth theory. 
A) capital is not subject to diminishing returns under new growth theory. 
B) capital is subject to diminishing returns under new growth theory. 
C) increases in population drive workers' incomes back down to the subsistence level in neoclassical growth theory. 
D) the pace of technological advances are caused by chance in new growth theory. 
E) labour productivity grows indefinitely in neoclassical growth theory.

Question 12

Which theory of economic growth argues that population growth lowers the real wage rate and stops economic growth?

Accepted Answer

A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories 
A) classical growth theory 
B) neoclassical growth theory 
C) new growth theory 
D) all of the theories 
E) none of the theories

Question 13

The key difference between the neoclassical growth theory and the classical growth theory is that

Accepted Answer

A) capital is not subject to diminishing returns under classical growth theory. 
B) capital is subject to diminishing returns under classical growth theory. 
C) increases in population drive workers' incomes back down to the subsistence level in classical growth theory. 
D) growth in the neoclassical growth theory ends with a population explosion. 
E) in classical growth theory, the pace of technological change influences the economic growth rate but economic growth does not influence the pace of technological change. 
A) capital is not subject to diminishing returns under classical growth theory. 
B) capital is subject to diminishing returns under classical growth theory. 
C) increases in population drive workers' incomes back down to the subsistence level in classical growth theory. 
D) growth in the neoclassical growth theory ends with a population explosion. 
E) in classical growth theory, the pace of technological change influences the economic growth rate but economic growth does not influence the pace of technological change.

Question 14

Factors that influence labour productivity include

Accepted Answer

A) the inflation rate, the real wage rate, and the exchange rate. 
B) the labour demand curve. 
C) physical capital, the real wage rate, and technology. 
D) the demand for labour, the real wage rate, and technology. 
E) physical capital, human capital, and technology. 
A) the inflation rate, the real wage rate, and the exchange rate. 
B) the labour demand curve. 
C) physical capital, the real wage rate, and technology. 
D) the demand for labour, the real wage rate, and technology. 
E) physical capital, human capital, and technology.

Question 15

If real GDP is $12,150 billion and aggregate labour hours are 270 billion, labour productivity equals

Accepted Answer

A) $6.50 an hour. 
B) $45 an hour. 
C) $48 an hour. 
D) $650 an hour. 
E) $32.81 an hour. 
A) $6.50 an hour. 
B) $45 an hour. 
C) $48 an hour. 
D) $650 an hour. 
E) $32.81 an hour.

Question 16

________ is the accumulated skill and knowledge of human beings.

Accepted Answer

A) Labour productivity 
B) Human capital 
C) Capital 
D) Technology 
E) Human investment 
A) Labour productivity 
B) Human capital 
C) Capital 
D) Technology 
E) Human investment

Question 17

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person is 7 percent a year, how long will it take the country's real GDP per person to double?

Accepted Answer

A) 1 year 
B) 2 years 
C) 10 years 
D) 49 years 
E) 7 years 
A) 1 year 
B) 2 years 
C) 10 years 
D) 49 years 
E) 7 years

Question 18

During 2014, the country of Economia had real GDP of $115 billion and the population was 0.9 billion. In 2013, real GDP was $105 billion and the population was 0.85 billion. In 2013, real GDP per person was

Accepted Answer

A) $128. 
B) $124. 
C) $135. 
D) $117. 
E) $1,235. 
A) $128. 
B) $124. 
C) $135. 
D) $117. 
E) $1,235.

Question 19

In 2012, Northland had real GDP of $4.21 billion and a population of 2.98 million. In 2013, real GDP was $4.59 billion and population was 2.97 million. What was Northland's growth rate of real GDP in 2013?

Accepted Answer

A) 0.38 percent 
B) 3.8 percent 
C) 8.3 percent 
D) 9.0 percent 
E) 11.1 percent 
A) 0.38 percent 
B) 3.8 percent 
C) 8.3 percent 
D) 9.0 percent 
E) 11.1 percent

Question 20

In developing nations, microloans

Accepted Answer

A) have enabled small businesses with limited access to credit to purchase capital and expand, allowing greater economic growth. 
B) have increased the indebtedness of impoverished people, slowing economic growth. 
C) are primarily used to finance consumption expenditure, leading to economic growth. 
D) are far too small to have any discernible effect. 
E) discourage saving and investment. 
A) have enabled small businesses with limited access to credit to purchase capital and expand, allowing greater economic growth. 
B) have increased the indebtedness of impoverished people, slowing economic growth. 
C) are primarily used to finance consumption expenditure, leading to economic growth. 
D) are far too small to have any discernible effect. 
E) discourage saving and investment.

Exam 22: Economic Growth

An assumption of the new growth theory is that

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person is 10 percent a year, how long will it take the country's real GDP per person to double?

Labour productivity grows as

All of the following statements are included in new growth theory except

Between 1926 and 2014, the average growth rate of real GDP per person in Canada was ________ percent a year. During this period, ________ grew at a faster rate than the population.

Human capital is the

If real GDP is $800 million and aggregate labour hours are 20 million, labour productivity is

When the quantity of labour demanded exceeds the quantity of labour supplied, the real wage rate

The aggregate production function shows how ________ varies with ________.

The key difference between the neoclassical growth theory and the new growth theory is that

Which theory of economic growth argues that population growth lowers the real wage rate and stops economic growth?

The key difference between the neoclassical growth theory and the classical growth theory is that

Factors that influence labour productivity include

If real GDP is $12,150 billion and aggregate labour hours are 270 billion, labour productivity equals

________ is the accumulated skill and knowledge of human beings.

Using the Rule of 70, if the country of Flowerdom's current growth rate of real GDP per person is 7 percent a year, how long will it take the country's real GDP per person to double?

During 2014, the country of Economia had real GDP of $115 billion and the population was 0.9 billion. In 2013, real GDP was $105 billion and the population was 0.85 billion. In 2013, real GDP per person was

In 2012, Northland had real GDP of $4.21 billion and a population of 2.98 million. In 2013, real GDP was $4.59 billion and population was 2.97 million. What was Northland's growth rate of real GDP in 2013?

In developing nations, microloans

What Is Economics

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Between 1926 and 2014, the average growth rate of real GDP per person in Canada was percent a year. During this period, grew at a faster rate than the population.

The aggregate production function shows how varies with .