Question 1

Which growth theory predicts that even when technology advances, real GDP per person always returns to a subsistence level of income?

Accepted Answer

A)  Classical growth theory 
B)  Sustained growth theory 
C)  Neoclassical growth theory 
D)  New growth theory 
E)  Keynesian growth theory 
A)  Classical growth theory 
B)  Sustained growth theory 
C)  Neoclassical growth theory 
D)  New growth theory 
E)  Keynesian growth theory

Question 2

Economic freedom

Accepted Answer

A)  is not important for nations to grow. 
B)  must come from a democratic government. 
C)  is founded, in part, on the rule of law. 
D)  is created when the nation imposes many regulations on businesses. 
E)  is harmed by having too many property rights. 
A)  is not important for nations to grow. 
B)  must come from a democratic government. 
C)  is founded, in part, on the rule of law. 
D)  is created when the nation imposes many regulations on businesses. 
E)  is harmed by having too many property rights.

Question 3

________ increases with education, training, and job experience. i. Physical capital
Ii) Human capital
Iii) Financial capital

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 4

One of the possible roles governments can play in sponsoring growth is to

Accepted Answer

A)  provide tax incentives to encourage saving. 
B)  own more of the nation's resources in order to put them to use. 
C)  close the nation to trade in order to protect its domestic producers. 
D)  make decisions for its citizens as to the most suitable job. 
E)  limit the use of property rights in order to decrease the harm they create. 
A)  provide tax incentives to encourage saving. 
B)  own more of the nation's resources in order to put them to use. 
C)  close the nation to trade in order to protect its domestic producers. 
D)  make decisions for its citizens as to the most suitable job. 
E)  limit the use of property rights in order to decrease the harm they create.

Question 5

$$\begin{array}{l}
\text { Real GDP }\
\begin{array} { c c } 
\text { Year } & \text { (billions of 2005 pesetas) } \
\hline 1998 & 45,901 \
1997 & 44,224
\end{array}
\end{array}$$
-The table above gives information about the economy of Spain.If the growth rate in 1998 is maintained, real GDP will double in ________ years.

Accepted Answer

A)  4 
B)  19 
C)  10 
D)  18 
E)  25 
A)  4 
B)  19 
C)  10 
D)  18 
E)  25

Question 6

In growth theory, the change in a country's standard of living is measured by the change in

Accepted Answer

A)  real GDP per person. 
B)  real GDP. 
C)  the nation's capital stock. 
D)  wages per person. 
E)  employment. 
A)  real GDP per person. 
B)  real GDP. 
C)  the nation's capital stock. 
D)  wages per person. 
E)  employment.

Question 7

If real GDP was $14 trillion last year and is $16 trillion this year, what is the growth rate?

Accepted Answer

A)  12.5 percent 
B)  -12.5 percent 
C)  14 percent 
D)  $2 trillion 
E)  47 percent 
A)  12.5 percent 
B)  -12.5 percent 
C)  14 percent 
D)  $2 trillion 
E)  47 percent

Question 8

A key reason why some countries are growing very slowly is

Accepted Answer

A)  they lack a democratic government. 
B)  they lack economic freedom. 
C)  their inflation rate is too high. 
D)  they are too poor, so there is no saving. 
E)  there is too much competition within their economies. 
A)  they lack a democratic government. 
B)  they lack economic freedom. 
C)  their inflation rate is too high. 
D)  they are too poor, so there is no saving. 
E)  there is too much competition within their economies.

Question 9

What does the new growth theory predict about the persistence of real GDP gaps among rich and poor countries?

Accepted Answer

The new growth theory predicts that nati

Question 10

The new growth theory

Accepted Answer

A)  corrects for poor estimates of population growth. 
B)  eliminates technological advances from the growth picture. 
C)  applies to only very poor, less-developed nations. 
D)  explains the source of technological advances. 
E)  asserts that economic growth can be rapid but can only persist for a limited period of time. 
A)  corrects for poor estimates of population growth. 
B)  eliminates technological advances from the growth picture. 
C)  applies to only very poor, less-developed nations. 
D)  explains the source of technological advances. 
E)  asserts that economic growth can be rapid but can only persist for a limited period of time.

Question 11

Real GDP equals aggregate hours

Accepted Answer

A)  divided by labor productivity. 
B)  minus labor productivity. 
C)  plus labor productivity. 
D)  multiplied by labor productivity. 
E)  multiplied by human capital. 
A)  divided by labor productivity. 
B)  minus labor productivity. 
C)  plus labor productivity. 
D)  multiplied by labor productivity. 
E)  multiplied by human capital.

Question 12

The new growth theory suggests that as the economy grows

Accepted Answer

A)  there are only movements along the production function but no shifts in the curve. 
B)  there are only shifts in the production function but no movements along the curve. 
C)  there are both shifts in and movements along the production function. 
D)  there are neither shifts in nor movements along the production function. 
E)  the production function will eventually become obsolete because production will increase so much. 
A)  there are only movements along the production function but no shifts in the curve. 
B)  there are only shifts in the production function but no movements along the curve. 
C)  there are both shifts in and movements along the production function. 
D)  there are neither shifts in nor movements along the production function. 
E)  the production function will eventually become obsolete because production will increase so much.

Question 13

New growth theory asserts that i. human capital grows because of choices.
Ii) discoveries result from choices.
Iii) competition brings profits.

Accepted Answer

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

Question 14

$$\begin{array}{l}
\text { Real GDP }\
\begin{array} { c c } 
\text { Year } & \text { (trillions of 2005 yen) } \
\hline 1997 & 484 \
1996 & 480 \
\hline
\end{array}
\end{array}$$
-If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per person

Accepted Answer

A)  falls. 
B)  rises. 
C)  does not change. 
D)  might rise, fall, or not change. 
E)  cannot be measured. 
A)  falls. 
B)  rises. 
C)  does not change. 
D)  might rise, fall, or not change. 
E)  cannot be measured.

Question 15

$$\begin{array} { l c c } 
& \begin{array} { c } 
\text { Real GDP } \
\text { Year }
\end{array} & \begin{array} { c } 
\text { Population } \
\text { (millions of 2005 dollars) } \
\text { (millions of people) }
\end{array} \
\hline \text { Year 1 } & 500 & 10 \
\text { Year 2 } & 550 & 11 \
\hline
\end{array}$$
-According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

Accepted Answer

A)  10 percent 
B)  1 percent 
C)  50 percent 
D)  5 percent 
E)  55 percent 
A)  10 percent 
B)  1 percent 
C)  50 percent 
D)  5 percent 
E)  55 percent

Question 16

New growth theory predicts that

Accepted Answer

A)  economic growth is only temporary. 
B)  economic growth can last indefinitely 
C)  economic growth is eroded by changes in taxes. 
D)  government policies can do nothing to foster increased growth. 
E)  ultimately people earn a subsistence wage. 
A)  economic growth is only temporary. 
B)  economic growth can last indefinitely 
C)  economic growth is eroded by changes in taxes. 
D)  government policies can do nothing to foster increased growth. 
E)  ultimately people earn a subsistence wage.

Question 17

In explaining economic growth, new growth theory stresses the role played by

Accepted Answer

A)  human choices. 
B)  population moderation. 
C)  women in the workforce. 
D)  the participation rate of elderly workers. 
E)  the government in directing the nation's investments. 
A)  human choices. 
B)  population moderation. 
C)  women in the workforce. 
D)  the participation rate of elderly workers. 
E)  the government in directing the nation's investments.

Question 18

-In the figure above, productivity has increased.In which growth model can this type of change lead to a permanently higher growth rate of real GDP per person?
i. Classical growth model
ii. Neoclassical growth model
iii. New growth model

Accepted Answer

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

Question 19

The Rule of 70 can be used to calculate the

Accepted Answer

A)  economic growth rate per month. 
B)  population growth rate per year. 
C)  number of years it would take for the level of any variable to double. 
D)  70 percent level of the economic growth rate. 
E)  economic growth rate per year. 
A)  economic growth rate per month. 
B)  population growth rate per year. 
C)  number of years it would take for the level of any variable to double. 
D)  70 percent level of the economic growth rate. 
E)  economic growth rate per year.

Question 20

Which of the following are predicted by the classical growth theory?
i. population growth will end economic growth
ii. real GDP per person will return to subsistence level
iii. technology drives persistent economic growth

Accepted Answer

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

Which growth theory predicts that even when technology advances, real GDP per person always returns to a subsistence level of income?

Economic freedom

________ increases with education, training, and job experience. i. Physical capital Ii) Human capital Iii) Financial capital

One of the possible roles governments can play in sponsoring growth is to

Real GDP Year (billions of 2005 pesetas) 1998 45,901 1997 44,224 -The table above gives information about the economy of Spain.If the growth rate in 1998 is maintained, real GDP will double in ________ years.

In growth theory, the change in a country's standard of living is measured by the change in

If real GDP was $14 trillion last year and is $16 trillion this year, what is the growth rate?

A key reason why some countries are growing very slowly is

What does the new growth theory predict about the persistence of real GDP gaps among rich and poor countries?

The new growth theory

Real GDP equals aggregate hours

The new growth theory suggests that as the economy grows

New growth theory asserts that i. human capital grows because of choices. Ii) discoveries result from choices. Iii) competition brings profits.

Real GDP Year (trillions of 2005 yen) 1997 484 1996 480 -If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per person

Real GDP Year Population (millions of 2005 dollars) (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

New growth theory predicts that

In explaining economic growth, new growth theory stresses the role played by

-In the figure above, productivity has increased.In which growth model can this type of change lead to a permanently higher growth rate of real GDP per person? i. Classical growth model ii. Neoclassical growth model iii. New growth model

The Rule of 70 can be used to calculate the

Which of the following are predicted by the classical growth theory? i. population growth will end economic growth ii. real GDP per person will return to subsistence level iii. technology drives persistent 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

Which growth theory predicts that even when technology advances, real GDP per person always returns to a subsistence level of income?

Economic freedom

________ increases with education, training, and job experience. i. Physical capital Ii) Human capital Iii) Financial capital

One of the possible roles governments can play in sponsoring growth is to

Real GDP Year (billions of 2005 pesetas) 1998 45,901 1997 44,224 -The table above gives information about the economy of Spain.If the growth rate in 1998 is maintained, real GDP will double in ________ years.

In growth theory, the change in a country's standard of living is measured by the change in

If real GDP was $14 trillion last year and is $16 trillion this year, what is the growth rate?

A key reason why some countries are growing very slowly is

What does the new growth theory predict about the persistence of real GDP gaps among rich and poor countries?

The new growth theory

Real GDP equals aggregate hours

The new growth theory suggests that as the economy grows

New growth theory asserts that i. human capital grows because of choices. Ii) discoveries result from choices. Iii) competition brings profits.

Real GDP Year (trillions of 2005 yen) 1997 484 1996 480 -If the growth rate of population is greater than a nation's growth rate of real GDP, then its real GDP per person

Real GDP Year Population (millions of 2005 dollars) (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP grew at a rate of ________ between year 1 and year 2.

New growth theory predicts that

In explaining economic growth, new growth theory stresses the role played by

-In the figure above, productivity has increased.In which growth model can this type of change lead to a permanently higher growth rate of real GDP per person? i. Classical growth model ii. Neoclassical growth model iii. New growth model

The Rule of 70 can be used to calculate the

Which of the following are predicted by the classical growth theory? i. population growth will end economic growth ii. real GDP per person will return to subsistence level iii. technology drives persistent 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