Question 1

If the U.S.economy grows as proposed by the neoclassical growth model, we would see that

Accepted Answer

A)  real GDP per person will increase as a result of increases in technology. 
B)  real GDP per person grows slowly as population growth slows. 
C)  increases in technology decrease capital per worker. 
D)  random events cause technology increases and economic growth. 
E)  real GDP increases cause upward shifts in the production function. 
A)  real GDP per person will increase as a result of increases in technology. 
B)  real GDP per person grows slowly as population growth slows. 
C)  increases in technology decrease capital per worker. 
D)  random events cause technology increases and economic growth. 
E)  real GDP increases cause upward shifts in the production function.

Question 2

-In the figure above, according to the classical model of economic growth, in the long run the real wage rate equals ________ and the quantity of labor is ________ billions of hours per year.

Accepted Answer

A)  $25; 300 
B)  $25; 200 
C)  $35; 200 
D)  $35; 300 
E)  More information is needed to answer the question. 
A)  $25; 300 
B)  $25; 200 
C)  $35; 200 
D)  $35; 300 
E)  More information is needed to answer the question.

Question 3

The economic growth rate is measured as the

Accepted Answer

A)  annual percentage change of real GDP. 
B)  annual percentage change of employment. 
C)  amount of real GDP. 
D)  annual percentage change of the population. 
E)  amount of population. 
A)  annual percentage change of real GDP. 
B)  annual percentage change of employment. 
C)  amount of real GDP. 
D)  annual percentage change of the population. 
E)  amount of population.

Question 4

Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million, 950,000 workers are employed, and the number of hours each worker works per year did not change.Hence, labor productivity

Accepted Answer

A)  has increased. 
B)  has decreased. 
C)  has remained constant. 
D)  cannot be compared between the two years because both real GDP and the number of workers increased. 
E)  might have changed, but more information is needed to determine if it changed. 
A)  has increased. 
B)  has decreased. 
C)  has remained constant. 
D)  cannot be compared between the two years because both real GDP and the number of workers increased. 
E)  might have changed, but more information is needed to determine if it changed.

Question 5

Labor productivity growth depends on i. saving and investment.
Ii) increases in human capital.
Iii) technological growth.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  Both ii and iii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  Both ii and iii 
E)  i, ii, and iii

Question 6

The new growth theory asserts that

Accepted Answer

A)  the population growth rate will increase when real GDP per person increases. 
B)  a discovery can be used by only one person, the discoverer. 
C)  technology improves slowly while population grows rapidly. 
D)  production processes can be replicated at many different firms in the economy. 
E)  eventually people earn only a subsistence living. 
A)  the population growth rate will increase when real GDP per person increases. 
B)  a discovery can be used by only one person, the discoverer. 
C)  technology improves slowly while population grows rapidly. 
D)  production processes can be replicated at many different firms in the economy. 
E)  eventually people earn only a subsistence living.

Question 7

According to classical growth theory, people earn only a subsistence real income because of growth in

Accepted Answer

A)  technology. 
B)  capital. 
C)  population. 
D)  employment. 
E)  labor productivity. 
A)  technology. 
B)  capital. 
C)  population. 
D)  employment. 
E)  labor productivity.

Question 8

Economic growth in neoclassical growth theory stops whenever

Accepted Answer

A)  technology stops advancing. 
B)  population grows rapidly and lowers real income level to its subsistence level. 
C)  the government controls too much of economic activity. 
D)  workers lose the incentive to work. 
E)  profits diminish. 
A)  technology stops advancing. 
B)  population grows rapidly and lowers real income level to its subsistence level. 
C)  the government controls too much of economic activity. 
D)  workers lose the incentive to work. 
E)  profits diminish.

Question 9

In a small western nation, labor productivity last year was $20 per hour and total labor hours were 400 hours.Hence, real GDP

Accepted Answer

A)  was $80,000. 
B)  was $8,000. 
C)  was $20. 
D)  grew by 5%. 
E)  00$416,000 over 52 weeks. 
A)  was $80,000. 
B)  was $8,000. 
C)  was $20. 
D)  grew by 5%. 
E)  00$416,000 over 52 weeks.

Question 10

A country's leadership believes that the neoclassical growth theory is correct.The country already has the necessary preconditions for growth, so suggest policy changes the government might enact to help speed economic growth.

Accepted Answer

The policy changes should encourage tech

Question 11

Saving

Accepted Answer

A)  slows growth because it decreases consumption. 
B)  finances investment which brings capital accumulation. 
C)  has no impact on economic growth. 
D)  is very low in most East Asian nations. 
E)  is important for a country to gain the benefits of international trade. 
A)  slows growth because it decreases consumption. 
B)  finances investment which brings capital accumulation. 
C)  has no impact on economic growth. 
D)  is very low in most East Asian nations. 
E)  is important for a country to gain the benefits of international trade.

Question 12

What is economic freedom and why is it important for economic growth?

Accepted Answer

Economic freedom is a condition when peo

Question 13

If it took 20 years for real GDP to double, what was the growth rate of real GDP?

Accepted Answer

A)  4.5 percent 
B)  3.0 percent 
C)  3.5 percent 
D)  4 percent 
E)  5 percent 
A)  4.5 percent 
B)  3.0 percent 
C)  3.5 percent 
D)  4 percent 
E)  5 percent

Question 14

A key element of the classical growth theory is that

Accepted Answer

A)  economic growth can be sustained as long as government intervention does not occur. 
B)  increases in technology drive economic growth. 
C)  an increase in population leads to increase in labor supply and a decline in real wage rates. 
D)  low taxes promote economic growth. 
E)  market forces drive economic growth. 
A)  economic growth can be sustained as long as government intervention does not occur. 
B)  increases in technology drive economic growth. 
C)  an increase in population leads to increase in labor supply and a decline in real wage rates. 
D)  low taxes promote economic growth. 
E)  market forces drive economic growth.

Question 15

The new growth theory asserts that profits are

Accepted Answer

A)  permanent, because they are derived from discoveries. 
B)  temporary, because the discoveries that lead to profits are eventually used by all. 
C)  an illusion, since costs are never fully covered. 
D)  permanent, because physical activities can be replicated. 
E)  not an essential component determining whether the economy grows or not. 
A)  permanent, because they are derived from discoveries. 
B)  temporary, because the discoveries that lead to profits are eventually used by all. 
C)  an illusion, since costs are never fully covered. 
D)  permanent, because physical activities can be replicated. 
E)  not an essential component determining whether the economy grows or not.

Question 16

According to classical growth theory, when real income ________, the population grows.

Accepted Answer

A)  is less than the subsistence real income 
B)  exceeds the subsistence real income 
C)  exceeds capital per hour of labor 
D)  is less than capital per hour of labor 
E)  is constant 
A)  is less than the subsistence real income 
B)  exceeds the subsistence real income 
C)  exceeds capital per hour of labor 
D)  is less than capital per hour of labor 
E)  is constant

Question 17

All of the following are preconditions for economic growth EXCEPT i. property rights.
Ii) democracy.
Iii) free markets.

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  Both i and ii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  Both i and ii 
E)  i, ii, and iii

Question 18

Brian is running for state senator and if elected, pledges to improve economic growth.His plan for economic growth includes increasing spending on public education and providing tax incentives to encourage improved private education.His plan is likely to

Accepted Answer

A)  slow economic growth because it includes a provision for private education. 
B)  have no effect on economic growth because property rights are not changed. 
C)  speed economic growth as the quality of resources improve. 
D)  fail because the provision for private education limits government involvement in education. 
E)  have no effect on economic growth because government spending cannot affect the economic growth rate. 
A)  slow economic growth because it includes a provision for private education. 
B)  have no effect on economic growth because property rights are not changed. 
C)  speed economic growth as the quality of resources improve. 
D)  fail because the provision for private education limits government involvement in education. 
E)  have no effect on economic growth because government spending cannot affect the economic growth rate.

Question 19

If Turkey wants to promote faster economic growth, it will need to

Accepted Answer

A)  promote incentive systems to encourage saving, research and development, increased trade and improved education. 
B)  restrict economic freedom so the government has better control of markets. 
C)  restrict international trade to protects its own workers. 
D)  promote government intervention to help markets determine incentives. 
E)  restrict property rights so that individuals can better share inventions. 
A)  promote incentive systems to encourage saving, research and development, increased trade and improved education. 
B)  restrict economic freedom so the government has better control of markets. 
C)  restrict international trade to protects its own workers. 
D)  promote government intervention to help markets determine incentives. 
E)  restrict property rights so that individuals can better share inventions.

Question 20

Classical growth theory predicts that economic growth

Accepted Answer

A)  will continue at the classical rate of 3 percent forever. 
B)  will eventually stop because of population growth. 
C)  occurs because of hard-working citizens. 
D)  is merely an illusion. 
E)  decreases the supply of labor. 
A)  will continue at the classical rate of 3 percent forever. 
B)  will eventually stop because of population growth. 
C)  occurs because of hard-working citizens. 
D)  is merely an illusion. 
E)  decreases the supply of labor.

If the U.S.economy grows as proposed by the neoclassical growth model, we would see that

-In the figure above, according to the classical model of economic growth, in the long run the real wage rate equals and the quantity of labor is billions of hours per year.

The economic growth rate is measured as the

Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million, 950,000 workers are employed, and the number of hours each worker works per year did not change.Hence, labor productivity

Labor productivity growth depends on i. saving and investment. Ii) increases in human capital. Iii) technological growth.

The new growth theory asserts that

According to classical growth theory, people earn only a subsistence real income because of growth in

Economic growth in neoclassical growth theory stops whenever

In a small western nation, labor productivity last year was $20 per hour and total labor hours were 400 hours.Hence, real GDP

A country's leadership believes that the neoclassical growth theory is correct.The country already has the necessary preconditions for growth, so suggest policy changes the government might enact to help speed economic growth.

Saving

What is economic freedom and why is it important for economic growth?

If it took 20 years for real GDP to double, what was the growth rate of real GDP?

A key element of the classical growth theory is that

The new growth theory asserts that profits are

According to classical growth theory, when real income ________, the population grows.

All of the following are preconditions for economic growth EXCEPT i. property rights. Ii) democracy. Iii) free markets.

Brian is running for state senator and if elected, pledges to improve economic growth.His plan for economic growth includes increasing spending on public education and providing tax incentives to encourage improved private education.His plan is likely to

If Turkey wants to promote faster economic growth, it will need to

Classical growth theory predicts that economic growth

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 9: Economic Growth

If the U.S.economy grows as proposed by the neoclassical growth model, we would see that

-In the figure above, according to the classical model of economic growth, in the long run the real wage rate equals ________ and the quantity of labor is ________ billions of hours per year.

The economic growth rate is measured as the

Last year, in a nation far to the South, real GDP was $90 million and 900,000 workers were employed.This year real GDP is $100 million, 950,000 workers are employed, and the number of hours each worker works per year did not change.Hence, labor productivity

Labor productivity growth depends on i. saving and investment. Ii) increases in human capital. Iii) technological growth.

The new growth theory asserts that

According to classical growth theory, people earn only a subsistence real income because of growth in

Economic growth in neoclassical growth theory stops whenever

In a small western nation, labor productivity last year was $20 per hour and total labor hours were 400 hours.Hence, real GDP

A country's leadership believes that the neoclassical growth theory is correct.The country already has the necessary preconditions for growth, so suggest policy changes the government might enact to help speed economic growth.

Saving

What is economic freedom and why is it important for economic growth?

If it took 20 years for real GDP to double, what was the growth rate of real GDP?

A key element of the classical growth theory is that

The new growth theory asserts that profits are

According to classical growth theory, when real income ________, the population grows.

All of the following are preconditions for economic growth EXCEPT i. property rights. Ii) democracy. Iii) free markets.

Brian is running for state senator and if elected, pledges to improve economic growth.His plan for economic growth includes increasing spending on public education and providing tax incentives to encourage improved private education.His plan is likely to

If Turkey wants to promote faster economic growth, it will need to

Classical growth theory predicts that economic growth

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

-In the figure above, according to the classical model of economic growth, in the long run the real wage rate equals and the quantity of labor is billions of hours per year.