Question 1

In order to increase economic growth, a government can ________.

Accepted Answer

A)  discourage research and development 
B)  decrease funding on education 
C)  discourage specialization and trade 
D)  establish property rights and a legal system 
E)  tax saving in order to encourage more spending 
A)  discourage research and development 
B)  decrease funding on education 
C)  discourage specialization and trade 
D)  establish property rights and a legal system 
E)  tax saving in order to encourage more spending

Question 2

U.S.labor productivity slowed during the 1970s because of i. increasing government taxes and regulations on production.
Ii) the necessity to cope with energy price increases.
Iii) inflation, which shortened the horizon over which businesses made their borrowing plans.

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 3

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom?
i. A democratic form of government.
ii. Property rights must be protected.
iii. The government must support and pay for inventions and innovations.

Accepted Answer

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

Question 4

$$\begin{array} { l c c } 
& \text { Real GDP } & \text { Population } \
\text { Year } & \text { (billions of 2005 dollars) } & \text { (millions of people) } \
\hline 1961 & 2,432 & 184 \
1962 & 2,578 & 186 \
\hline
\end{array}$$
-U.S.real GDP per person grew rapidly in the early 1960s.The table above has U.S.real GDP and population for 1961 and 1962.
a. What was U.S.real GDP per person in 1961?
b. What was U.S.real GDP per person in 1962?
c. Between 1961 and 1962, how rapidly did U.S.real GDP per person grow?

Accepted Answer

a.U.S.real GDP per person in 1961 = ($2,

Question 5

Language, writing, and mathematics are examples of

Accepted Answer

A)  physical capital. 
B)  real GDP per person. 
C)  technologies embodied in human capital. 
D)  technologies embodied in physical capital. 
E)  financial capital. 
A)  physical capital. 
B)  real GDP per person. 
C)  technologies embodied in human capital. 
D)  technologies embodied in physical capital. 
E)  financial capital.

Question 6

Belgium's real GDP per person is $33,000 and Austria's is $34,700.The population growth rate in Belgium is 0.13 percent and the growth rate of real GDP is 3.0 percent.The population growth rate in Austria is 0.08 percent and the growth rate of real GDP is 3.3 percent.If these growth rates continue, how many years will it take for Belgium's real GDP per person to equal Austria's real GDP per person?

Accepted Answer

A)  Belgium's standard of living will never equal Austria's. 
B)  Just over 23 years 
C)  Just over 24 years 
D)  Just over 21 years 
E)  Over 230 years 
A)  Belgium's standard of living will never equal Austria's. 
B)  Just over 23 years 
C)  Just over 24 years 
D)  Just over 21 years 
E)  Over 230 years

Question 7

Suppose that real GDP grows at 3 percent per year.What is the growth rate of real GDP per person if the population grows at:
a. 2 percent?
 What happens to the standard of living?
b. 3 percent?
 What happens to the standard of living?
c. 4 percent?
 What happens to the standard of living?

Accepted Answer

a. The growth rate of real GDP per perso

Question 8

One possible way of achieving faster economic growth is to

Accepted Answer

A)  abolish the system of patents and copyrights so that everyone can use people's ideas. 
B)  limit international trade to only a few countries so that the nation is not hurt by too much trade. 
C)  encourage research and development. 
D)  limit schooling in order to have more people in the labor force, producing goods and services. 
E)  tax saving so that people spend more and businesses' profits are larger. 
A)  abolish the system of patents and copyrights so that everyone can use people's ideas. 
B)  limit international trade to only a few countries so that the nation is not hurt by too much trade. 
C)  encourage research and development. 
D)  limit schooling in order to have more people in the labor force, producing goods and services. 
E)  tax saving so that people spend more and businesses' profits are larger.

Question 9

Using the rule of 70, a sustained 3 percent per year real GDP growth rate will

Accepted Answer

A)  last for 70 years. 
B)  double the current level of real GDP in about 23 years. 
C)  double the current level of real GDP in about 210 years. 
D)  double the current level of real GDP in about 70 years. 
E)  double the current level of real GDP in about 40 years. 
A)  last for 70 years. 
B)  double the current level of real GDP in about 23 years. 
C)  double the current level of real GDP in about 210 years. 
D)  double the current level of real GDP in about 70 years. 
E)  double the current level of real GDP in about 40 years.

Question 10

Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent.The change in standard of living, as measured by the growth rate in real GDP per person, is

Accepted Answer

A)  7 percent. 
B)  2.5 percent. 
C)  5 percent. 
D)  3 percent. 
E)  -3 percent. 
A)  7 percent. 
B)  2.5 percent. 
C)  5 percent. 
D)  3 percent. 
E)  -3 percent.

Question 11

Neoclassical growth theory assumes that technological advances

Accepted Answer

A)  have a direct relationship to the level of real income per capita. 
B)  can eliminate diminishing returns of labor and capital. 
C)  are negative if there is a subsistence level of real income but positive otherwise. 
D)  result from chance. 
E)  occurs only when firms can profit from it. 
A)  have a direct relationship to the level of real income per capita. 
B)  can eliminate diminishing returns of labor and capital. 
C)  are negative if there is a subsistence level of real income but positive otherwise. 
D)  result from chance. 
E)  occurs only when firms can profit from it.

Question 12

$$\begin{array} { l c c } 
& \begin{array} { c } 
\text { Real GDP } \
\text { Year }
\end{array} & \begin{array} { c } 
\text { Population } \
\text { (millions of 2005 dollars) } \
\text { (millions of people) }
\end{array} \
\hline \text { Year 1 } & 500 & 10 \
\text { Year 2 } & 550 & 11 \
\hline
\end{array}$$
-According to the data in the table above,

Accepted Answer

A)  the standard of living improved between year 1 and year 2. 
B)  the standard of living worsened between year 1 and year 2. 
C)  as measured by real GDP per person, the standard of living remained the same between year 1 and year 2. 
D)  real GDP grew more rapidly than population between year 1 and year 2. 
E)  real GDP grew more slowly than population between year 1 and year 2. 
A)  the standard of living improved between year 1 and year 2. 
B)  the standard of living worsened between year 1 and year 2. 
C)  as measured by real GDP per person, the standard of living remained the same between year 1 and year 2. 
D)  real GDP grew more rapidly than population between year 1 and year 2. 
E)  real GDP grew more slowly than population between year 1 and year 2.

Question 13

The annual growth rate of an economy is 10 percent.The economy's GDP will double in about ________ years.

Accepted Answer

A)  7 
B)  10 
C)  12 
D)  14 
E)  20 
A)  7 
B)  10 
C)  12 
D)  14 
E)  20

Question 14

To measure the change in the standard of living, it is best to use the growth rate

Accepted Answer

A)  from the Rule of 70. 
B)  of real GDP. 
C)  of the population. 
D)  of real GDP per person. 
E)  of the price level. 
A)  from the Rule of 70. 
B)  of real GDP. 
C)  of the population. 
D)  of real GDP per person. 
E)  of the price level.

Question 15

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

Accepted Answer

Labor productivity is defined

Question 16

The neoclassical growth theory predicts that

Accepted Answer

A)  population growth slows economic growth. 
B)  population growth increases real GDP per person. 
C)  real GDP per person grows as long as technology keeps advancing. 
D)  the growth rate of real GDP influences the rate of technological change. 
E)  eventually people receive only a subsistence level of income. 
A)  population growth slows economic growth. 
B)  population growth increases real GDP per person. 
C)  real GDP per person grows as long as technology keeps advancing. 
D)  the growth rate of real GDP influences the rate of technological change. 
E)  eventually people receive only a subsistence level of income.

Question 17

Aggregate hours show a sustained increase only as a result of

Accepted Answer

A)  individuals working more hours. 
B)  a greater percentage of the population entering the workforce. 
C)  an increase in the population. 
D)  increases in overtime work. 
E)  sustained increases in the labor force participation rate. 
A)  individuals working more hours. 
B)  a greater percentage of the population entering the workforce. 
C)  an increase in the population. 
D)  increases in overtime work. 
E)  sustained increases in the labor force participation rate.

Question 18

New growth theory asserts that ________ will lead us to greater productivity and economic growth.

Accepted Answer

A)  new machinery 
B)  government regulation 
C)  unlimited wants 
D)  leisure time 
E)  nothing 
A)  new machinery 
B)  government regulation 
C)  unlimited wants 
D)  leisure time 
E)  nothing

Question 19

Governments should promote education because education contributes to the nation's

Accepted Answer

A)  employment. 
B)  free markets. 
C)  economic growth potential. 
D)  international trade. 
E)  protection of property rights. 
A)  employment. 
B)  free markets. 
C)  economic growth potential. 
D)  international trade. 
E)  protection of property rights.

Question 20

-In the figure above, productivity has increased.In which growth model is this type of change the result of people's choices?
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

In order to increase economic growth, a government can ________.

U.S.labor productivity slowed during the 1970s because of i. increasing government taxes and regulations on production. Ii) the necessity to cope with energy price increases. Iii) inflation, which shortened the horizon over which businesses made their borrowing plans.

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom? i. A democratic form of government. ii. Property rights must be protected. iii. The government must support and pay for inventions and innovations.

Language, writing, and mathematics are examples of

Suppose that real GDP grows at 3 percent per year.What is the growth rate of real GDP per person if the population grows at: a. 2 percent? What happens to the standard of living? b. 3 percent? What happens to the standard of living? c. 4 percent? What happens to the standard of living?

One possible way of achieving faster economic growth is to

Using the rule of 70, a sustained 3 percent per year real GDP growth rate will

Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent.The change in standard of living, as measured by the growth rate in real GDP per person, is

Neoclassical growth theory assumes that technological advances

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,

The annual growth rate of an economy is 10 percent.The economy's GDP will double in about ________ years.

To measure the change in the standard of living, it is best to use the growth rate

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

The neoclassical growth theory predicts that

Aggregate hours show a sustained increase only as a result of

New growth theory asserts that ________ will lead us to greater productivity and economic growth.

Governments should promote education because education contributes to the nation's

-In the figure above, productivity has increased.In which growth model is this type of change the result of people's choices? i. Classical growth model ii. Neoclassical growth model iii. New growth model

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

In order to increase economic growth, a government can ________.

U.S.labor productivity slowed during the 1970s because of i. increasing government taxes and regulations on production. Ii) the necessity to cope with energy price increases. Iii) inflation, which shortened the horizon over which businesses made their borrowing plans.

Economic freedom is a precondition for economic growth.Which of the following is a characteristic of economic freedom? i. A democratic form of government. ii. Property rights must be protected. iii. The government must support and pay for inventions and innovations.

Language, writing, and mathematics are examples of

Suppose that real GDP grows at 3 percent per year.What is the growth rate of real GDP per person if the population grows at: a. 2 percent? What happens to the standard of living? b. 3 percent? What happens to the standard of living? c. 4 percent? What happens to the standard of living?

One possible way of achieving faster economic growth is to

Using the rule of 70, a sustained 3 percent per year real GDP growth rate will

Assume the population growth rate is 2 percent and the real GDP growth rate is 5 percent.The change in standard of living, as measured by the growth rate in real GDP per person, is

Neoclassical growth theory assumes that technological advances

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,

The annual growth rate of an economy is 10 percent.The economy's GDP will double in about ________ years.

To measure the change in the standard of living, it is best to use the growth rate

Real GDP equals $12 trillion and aggregate hours equals 300 billion hours.What does labor productivity equal?

The neoclassical growth theory predicts that

Aggregate hours show a sustained increase only as a result of

New growth theory asserts that ________ will lead us to greater productivity and economic growth.

Governments should promote education because education contributes to the nation's

-In the figure above, productivity has increased.In which growth model is this type of change the result of people's choices? i. Classical growth model ii. Neoclassical growth model iii. New growth model

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