Question 1

An economy can improve its standard of living by

Accepted Answer

A)  organizing production so that the quantity of goods produced per hour will decrease. 
B)  reducing the amount of human capital workers have. 
C)  increasing the amount of capital available per hour worked. 
D)  all of the above 
A)  organizing production so that the quantity of goods produced per hour will decrease. 
B)  reducing the amount of human capital workers have. 
C)  increasing the amount of capital available per hour worked. 
D)  all of the above

Question 2

An economy that grows too slowly fails to raise living standards.

Accepted Answer

A) True 
 B)False

Question 3

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

Accepted Answer

A)  diminishing returns. 
B)  negative returns. 
C)  accelerating returns. 
D)  decreasing production. 
A)  diminishing returns. 
B)  negative returns. 
C)  accelerating returns. 
D)  decreasing production.

Question 4

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

Accepted Answer

As the level of capital per hour worked

Question 5

According to new growth theory,

Accepted Answer

A)  physical capital is nonexcludable. 
B)  knowledge capital is excludable. 
C)  knowledge capital is subject to increasing returns. 
D)  knowledge capital is rival and excludable. 
A)  physical capital is nonexcludable. 
B)  knowledge capital is excludable. 
C)  knowledge capital is subject to increasing returns. 
D)  knowledge capital is rival and excludable.

Question 6

Because firms can free ride on the research and development of other firms,

Accepted Answer

A)  firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B)  firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C)  firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D)  firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research. 
A)  firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B)  firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C)  firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D)  firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research.

Question 7

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century. 
A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century.

Question 8

Provide examples of three kinds of government policies that can help increase the accumulation of knowledge capital and explain why government policies are often necessary to encourage the accumulation of knowledge capital.

Accepted Answer

Knowledge capital is a result of researc

Question 9

A patent grants an inventor exclusive rights to a product for how long?

Accepted Answer

A)  14 years 
B)  17 years 
C)  20 years 
D)  the lifetime of the product 
A)  14 years 
B)  17 years 
C)  20 years 
D)  the lifetime of the product

Question 10

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Accepted Answer

A)  $8,520 
B)  $9,280 
C)  $9,365 
D)  $10,560 
A)  $8,520 
B)  $9,280 
C)  $9,365 
D)  $10,560

Question 11

Technological change is the key to sustaining economic growth.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?

Accepted Answer

A)  Many of these developing countries do not have a functioning court system that can enforce laws. 
B)  Countries that are relatively poor are more likely to experience wars and revolutions. 
C)  Countries that are relatively poor are likely to have a lower quality of health care. 
D)  all of the above 
A)  Many of these developing countries do not have a functioning court system that can enforce laws. 
B)  Countries that are relatively poor are more likely to experience wars and revolutions. 
C)  Countries that are relatively poor are likely to have a lower quality of health care. 
D)  all of the above

Question 13

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

Accepted Answer

A)  Even when entrepreneurs cannot secure sufficient funding for projects from banks, venture capital firms may be willing to lend money. 
B)  The level of legal protection for investors in the United States is relatively low. 
C)  Because the financial market in the United States is so large, the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D)  Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults. 
A)  Even when entrepreneurs cannot secure sufficient funding for projects from banks, venture capital firms may be willing to lend money. 
B)  The level of legal protection for investors in the United States is relatively low. 
C)  Because the financial market in the United States is so large, the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D)  Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults.

Question 14

Human capital refers to the percentage of the working-age population in the labor force.

Accepted Answer

A) True 
 B)False

Question 15

You are an economic advisor to the president.You are asked to recommend a policy to promote long-term economic growth in the economy.Which of the following policies would you choose?

Accepted Answer

A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above 
A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above

Question 16

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

Accepted Answer

A)  there are decreases in human capital. 
B)  the per-worker production function shifts downward. 
C)  there continue to be decreases in capital per hour worked. 
D)  there is technological change. 
A)  there are decreases in human capital. 
B)  the per-worker production function shifts downward. 
C)  there continue to be decreases in capital per hour worked. 
D)  there is technological change.

Question 17

Does globalization promote economic growth,and how does globalization affect the welfare of a given country's citizens?

Accepted Answer

More globalized countries generally expe

Question 18

Most of the countries of Africa are considered newly industrializing countries.

Accepted Answer

A) True 
 B)False

Question 19

Figure 22-1
  
-Refer to Figure 22-1.Technological change is illustrated in the per-worker production function in the figure above by a movement from

Accepted Answer

A)  A to B. 
B)  B to C. 
C)  B to A. 
D)  D to C. 
A)  A to B. 
B)  B to C. 
C)  B to A. 
D)  D to C.

Question 20

One potential problem with the Chinese government's increases in spending on capital goods is that these increases have been achieved through

Accepted Answer

A)  high levels of borrowing in global financial markets. 
B)  decreases in private consumption. 
C)  debt refinancing and tariff revenues. 
D)  a rapid expansion of the money supply. 
A)  high levels of borrowing in global financial markets. 
B)  decreases in private consumption. 
C)  debt refinancing and tariff revenues. 
D)  a rapid expansion of the money supply.

An economy can improve its standard of living by

An economy that grows too slowly fails to raise living standards.

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

According to new growth theory,

Because firms can free ride on the research and development of other firms,

Growth in real GDP per capita for the world economy was greatest during

Provide examples of three kinds of government policies that can help increase the accumulation of knowledge capital and explain why government policies are often necessary to encourage the accumulation of knowledge capital.

A patent grants an inventor exclusive rights to a product for how long?

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Technological change is the key to sustaining economic growth.

Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

Human capital refers to the percentage of the working-age population in the labor force.

You are an economic advisor to the president.You are asked to recommend a policy to promote long-term economic growth in the economy.Which of the following policies would you choose?

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

Does globalization promote economic growth,and how does globalization affect the welfare of a given country's citizens?

Most of the countries of Africa are considered newly industrializing countries.

Figure 22-1 -Refer to Figure 22-1.Technological change is illustrated in the per-worker production function in the figure above by a movement from

One potential problem with the Chinese government's increases in spending on capital goods is that these increases have been achieved through

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 11: Long-Run Economic Growth: Sources and Policies

An economy can improve its standard of living by

An economy that grows too slowly fails to raise living standards.

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

According to new growth theory,

Because firms can free ride on the research and development of other firms,

Growth in real GDP per capita for the world economy was greatest during

Provide examples of three kinds of government policies that can help increase the accumulation of knowledge capital and explain why government policies are often necessary to encourage the accumulation of knowledge capital.

A patent grants an inventor exclusive rights to a product for how long?

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Technological change is the key to sustaining economic growth.

Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

Human capital refers to the percentage of the working-age population in the labor force.

You are an economic advisor to the president.You are asked to recommend a policy to promote long-term economic growth in the economy.Which of the following policies would you choose?

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

Does globalization promote economic growth,and how does globalization affect the welfare of a given country's citizens?

Most of the countries of Africa are considered newly industrializing countries.

Figure 22-1 -Refer to Figure 22-1.Technological change is illustrated in the per-worker production function in the figure above by a movement from

One potential problem with the Chinese government's increases in spending on capital goods is that these increases have been achieved through

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency,government Price Setting,and Taxes

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters