Question 1

Of the following countries, which has the lowest level of real GDP per person?

Accepted Answer

A) China 
B) Singapore 
C) Hong Kong 
D) Korea 
E) Canada 
A) China 
B) Singapore 
C) Hong Kong 
D) Korea 
E) Canada

Question 2

Which of the following ideas apply to the neoclassical growth theory?
I. The rate of technological change influences the rate of economic growth.
II. Technological change promotes saving and investment.
III. Convergence of economic growth rates across countries.

Accepted Answer

A) I only 
B) II only 
C) III only 
D) I and II only 
E) I, II, and III 
A) I only 
B) II only 
C) III only 
D) I and II only 
E) I, II, and III

Question 3

Ceteris paribus, an increase in population results in a

Accepted Answer

A) higher level of labour employed and higher potential GDP per hour of labour. 
B) lower level of labour employed and higher potential GDP per hour of labour. 
C) higher level of labour employed and lower potential GDP per hour of labour. 
D) lower level of labour employed and lower potential GDP per hour of labour. 
E) constant level of labour employed and constant potential GDP per hour of labour. 
A) higher level of labour employed and higher potential GDP per hour of labour. 
B) lower level of labour employed and higher potential GDP per hour of labour. 
C) higher level of labour employed and lower potential GDP per hour of labour. 
D) lower level of labour employed and lower potential GDP per hour of labour. 
E) constant level of labour employed and constant potential GDP per hour of labour.

Question 4

When labour productivity decreases, the

Accepted Answer

A) demand for labour curve shifts leftward and the real wage rate falls. 
B) supply of labour curve shifts rightward and the real wage rate fall. 
C) supply of labour curve shifts leftward and the real wage rate rises. 
D) demand for labour decreases and the supply of labour decreases, and the real wage rate rises, falls, or remains unchanged. 
E) demand for labour decreases and the supply of labour increases, and the real wage rate falls. 
A) demand for labour curve shifts leftward and the real wage rate falls. 
B) supply of labour curve shifts rightward and the real wage rate fall. 
C) supply of labour curve shifts leftward and the real wage rate rises. 
D) demand for labour decreases and the supply of labour decreases, and the real wage rate rises, falls, or remains unchanged. 
E) demand for labour decreases and the supply of labour increases, and the real wage rate falls.

Question 5

Which of the following does not contribute to achieving faster growth?

Accepted Answer

A) increased research and development 
B) improvement in the quality of education 
C) provision of international aid to developing nations 
D) slowing down international trade so that more countries become self-sufficient 
E) increased saving 
A) increased research and development 
B) improvement in the quality of education 
C) provision of international aid to developing nations 
D) slowing down international trade so that more countries become self-sufficient 
E) increased saving

Question 6

During the last 10 years, which of the following had the lowest level of real GDP per person?

Accepted Answer

A) Eastern Europe 
B) Central and South America 
C) Africa 
D) Japan 
E) China 
A) Eastern Europe 
B) Central and South America 
C) Africa 
D) Japan 
E) China

Question 7

Between 1960 and 2010, growth rates in real GDP per person in Hong Kong, Korea, Singapore, Taiwan, and China ________ the growth rate of real GDP per person in Canada. China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in ________.

Accepted Answer

A) exceeded; 1998 
B) were less than; 1988 
C) were less than; 1976 
D) exceeded; 1976 
E) were approximately equal to; 1968 
A) exceeded; 1998 
B) were less than; 1988 
C) were less than; 1976 
D) exceeded; 1976 
E) were approximately equal to; 1968

Question 8

Choose the statement that is incorrect.

Accepted Answer

A) The growth rate of real GDP per person can be calculated approximately by subtracting the population growth rate from the real GDP growth rate. 
B) Real GDP per person grows only if real GDP grows faster than the population grows. 
C) The standard of living depends on real GDP per person. 
D) Real GDP increases when the economy returns to full employment in an expansion phase of the business cycle. 
E) The return to full employment in an expansion phase of the business cycle is economic growth. 
A) The growth rate of real GDP per person can be calculated approximately by subtracting the population growth rate from the real GDP growth rate. 
B) Real GDP per person grows only if real GDP grows faster than the population grows. 
C) The standard of living depends on real GDP per person. 
D) Real GDP increases when the economy returns to full employment in an expansion phase of the business cycle. 
E) The return to full employment in an expansion phase of the business cycle is economic growth.

Question 9

An assumption of the neoclassical growth theory is that

Accepted Answer

A) people earn a subsistence real wage in the long run. 
B) technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) discoveries are a public capital good. 
E) encouraging international trade increases economic growth. 
A) people earn a subsistence real wage in the long run. 
B) technological advances are the result of chance. 
C) the marginal product of all types of capital increases as more capital is accumulated. 
D) discoveries are a public capital good. 
E) encouraging international trade increases economic growth.

Question 10

Use the table below to answer the following questions.
Table 22.3.1

-Refer to Table 22.3.1. The tables show the labour market and the production function schedule for the country of Pickett. An increase in population changes the quantity of labour supplied by 20 billion hours at each real wage rate. Potential GDP

Accepted Answer

A) does not change. 
B) decreases to $3 trillion. 
C) increases to $50 trillion. 
D) increases to $18 trillion. 
E) increases to $20 trillion. 
A) does not change. 
B) decreases to $3 trillion. 
C) increases to $50 trillion. 
D) increases to $18 trillion. 
E) increases to $20 trillion.

Question 11

The Rule of 70 is used to

Accepted Answer

A) estimate how much of an economy's growth rate is attributable to increases in capital per hour of labour. 
B) calculate the standard of living. 
C) calculate the economy's growth rate. 
D) estimate how long it will take the level of any variable to double. 
E) estimate how much of an economy's growth rate is attributable to technological advance. 
A) estimate how much of an economy's growth rate is attributable to increases in capital per hour of labour. 
B) calculate the standard of living. 
C) calculate the economy's growth rate. 
D) estimate how long it will take the level of any variable to double. 
E) estimate how much of an economy's growth rate is attributable to technological advance.

Question 12

Which theory of economic growth argues that growth does not automatically slow down?

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

Which of the following is a suggestion for increasing Canadian economic growth rates?

Accepted Answer

A) Stimulate saving by taxing consumption. 
B) Reduce the time period for patent protection to increase replication. 
C) Put less public research funds into universities. 
D) Protect our industries from foreign competition. 
E) Tax education 
A) Stimulate saving by taxing consumption. 
B) Reduce the time period for patent protection to increase replication. 
C) Put less public research funds into universities. 
D) Protect our industries from foreign competition. 
E) Tax education

Question 14

Slowdonia's current growth rate of real GDP per person is 1 percent a year. How long will it take to double real GDP per person?

Accepted Answer

A) 10 years 
B) 35 years 
C) 70 years 
D) 100 years 
E) Real GDP per person will never double 
A) 10 years 
B) 35 years 
C) 70 years 
D) 100 years 
E) Real GDP per person will never double

Question 15

Choose the statements concerning neoclassical growth theory which are true. 1. Neoclassical growth theory was developed in the late 19th century.
2. The rate of technological change influences the economic growth rate but economic growth does not influence the pace of technological change.
3. Economic growth will stop if technology stops advancing.
4. Technological change results from the choices people make in the pursuit of profit.

Accepted Answer

A) Statements 1 and 4 are correct. 
B) Statements 3 and 4 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 1 and 3 are correct. 
E) Statements 2 and 4 are correct. 
A) Statements 1 and 4 are correct. 
B) Statements 3 and 4 are correct. 
C) Statements 2 and 3 are correct. 
D) Statements 1 and 3 are correct. 
E) Statements 2 and 4 are correct.

Question 16

According to the law of diminishing returns, along the aggregate production function, an additional unit of

Accepted Answer

A) capital produces more output than an additional unit of labour. 
B) labour decreases output. 
C) labour produces more output than the previous unit. 
D) labour produces less output than the previous unit. 
E) labour increases the real wage rate. 
A) capital produces more output than an additional unit of labour. 
B) labour decreases output. 
C) labour produces more output than the previous unit. 
D) labour produces less output than the previous unit. 
E) labour increases the real wage rate.

Question 17

Knowledge capital is different from physical capital because knowledge capital

Accepted Answer

A) does not experience diminishing returns. 
B) experiences diminishing returns. 
C) is free. 
D) increases with investment. 
E) plays a part in economic growth. 
A) does not experience diminishing returns. 
B) experiences diminishing returns. 
C) is free. 
D) increases with investment. 
E) plays a part in economic growth.

Question 18

Which of the following is not a source of economic growth?

Accepted Answer

A) increasing stock market prices 
B) better educated workers 
C) growing physical capital 
D) appropriate incentive system 
E) advances in technology 
A) increasing stock market prices 
B) better educated workers 
C) growing physical capital 
D) appropriate incentive system 
E) advances in technology

Question 19

Economic growth is

Accepted Answer

A) a sustained expansion of the population. 
B) a sustained expansion of consumption expenditure over a given period. 
C) always accompanied by a rising price level. 
D) equal to real GDP per capita multiplied by 70. 
E) the expansion of production possibilities. 
A) a sustained expansion of the population. 
B) a sustained expansion of consumption expenditure over a given period. 
C) always accompanied by a rising price level. 
D) equal to real GDP per capita multiplied by 70. 
E) the expansion of production possibilities.

Question 20

Which one of the following quotations could be attributed to a supporter of the classical growth theory?

Accepted Answer

A) "Growth will last as long as technology keeps advancing." 
B) "Prosperity will last as long as technology keeps advancing." 
C) "Growth will last only until the increase in population brings productivity down to the subsistence level." 
D) "Prosperity will last as long as there is knowledge accumulation." 
E) "Growth will last as long as knowledge accumulation continues." 
A) "Growth will last as long as technology keeps advancing." 
B) "Prosperity will last as long as technology keeps advancing." 
C) "Growth will last only until the increase in population brings productivity down to the subsistence level." 
D) "Prosperity will last as long as there is knowledge accumulation." 
E) "Growth will last as long as knowledge accumulation continues."

Exam 22: Economic Growth

Of the following countries, which has the lowest level of real GDP per person?

Which of the following ideas apply to the neoclassical growth theory? I. The rate of technological change influences the rate of economic growth. II. Technological change promotes saving and investment. III. Convergence of economic growth rates across countries.

Ceteris paribus, an increase in population results in a

When labour productivity decreases, the

Which of the following does not contribute to achieving faster growth?

During the last 10 years, which of the following had the lowest level of real GDP per person?

Between 1960 and 2010, growth rates in real GDP per person in Hong Kong, Korea, Singapore, Taiwan, and China ________ the growth rate of real GDP per person in Canada. China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in ________.

Choose the statement that is incorrect.

An assumption of the neoclassical growth theory is that

The Rule of 70 is used to

Which theory of economic growth argues that growth does not automatically slow down?

Which of the following is a suggestion for increasing Canadian economic growth rates?

Slowdonia's current growth rate of real GDP per person is 1 percent a year. How long will it take to double real GDP per person?

According to the law of diminishing returns, along the aggregate production function, an additional unit of

Knowledge capital is different from physical capital because knowledge capital

Which of the following is not a source of economic growth?

Economic growth is

Which one of the following quotations could be attributed to a supporter of the classical growth theory?

What Is Economics

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Between 1960 and 2010, growth rates in real GDP per person in Hong Kong, Korea, Singapore, Taiwan, and China the growth rate of real GDP per person in Canada. China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in .