Question 1

Of all industrialized nations, real GDP per capita was the highest in Canada in 2010.

Accepted Answer

A) True 
 B)False

Question 2

Consider two countries, Alpha and Beta.In Alpha, real GDP per capita is $6,000.In Beta, real GDP per capita is $9,000.Based on the economic growth model, what would you predict about the growth rates in real GDP per capita across these two countries?

Accepted Answer

A) The growth rate of real GDP per capita will be lower in Alpha than it is in Beta. 
B) The growth rate of real GDP per capita will be higher in Alpha than it is in Beta. 
C) The growth rate of real GDP per capita in Alpha and Beta will be the same. 
D) The economic growth model makes no predictions regarding differences in growth rates of real GDP per capita across the two countries. 
E) The growth rate of real GDP per capita will be higher in Beta than it is in Alpha and the gap will widen over time. 
A) The growth rate of real GDP per capita will be lower in Alpha than it is in Beta. 
B) The growth rate of real GDP per capita will be higher in Alpha than it is in Beta. 
C) The growth rate of real GDP per capita in Alpha and Beta will be the same. 
D) The economic growth model makes no predictions regarding differences in growth rates of real GDP per capita across the two countries. 
E) The growth rate of real GDP per capita will be higher in Beta than it is in Alpha and the gap will widen over time.

Question 3

The economic growth model predicts that ________ across countries will converge over time.

Accepted Answer

A) income levels 
B) GDP per capita 
C) foreign direct investment rates 
D) growth rates 
E) unemployment rates 
A) income levels 
B) GDP per capita 
C) foreign direct investment rates 
D) growth rates 
E) unemployment rates

Question 4

Figure 7.4   Alt text for Figure 7.4: In figure 7.4, a graph representing per-worker production functions.
Long description for Figure 7.4: The x-axis is labelled, capital per hour worked, K/L.The y-axis is labelled, real GDP per hour worked, Y/L.3 concave curves originating from 0 at the vertex are shown.5 points A ($50000, $15000), B ($60000, $16000), C ($70000, $16400), D ($60000, $17000), and E ($60000, $15000)are plotted.The curve labelled, Production function 1, passes through point E.The curve labelled, Production function 2, passes through points A, B, and C.The curve labelled, Production function 3, passes through point D.These 5 points are connected to their respective coordinates on the x-axis and y-axis with dotted lines.
-Refer to Figure 7.4.The movement from A to B to C illustrates

Accepted Answer

A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labour. 
E) rising labour force participation. 
A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labour. 
E) rising labour force participation.

Question 5

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following policies are designed specifically to directly promote technological change in an economy?

Accepted Answer

A) government subsidization of research and development 
B) tax incentives to promote investment in RRSP plans 
C) laws to strengthen property rights 
D) a vaccination program to combat infectious diseases 
E) policies to protect domestic businesses from foreign direct investment 
A) government subsidization of research and development 
B) tax incentives to promote investment in RRSP plans 
C) laws to strengthen property rights 
D) a vaccination program to combat infectious diseases 
E) policies to protect domestic businesses from foreign direct investment

Question 7

Figure 7.4   Alt text for Figure 7.4: In figure 7.4, a graph representing per-worker production functions.
Long description for Figure 7.4: The x-axis is labelled, capital per hour worked, K/L.The y-axis is labelled, real GDP per hour worked, Y/L.3 concave curves originating from 0 at the vertex are shown.5 points A ($50000, $15000), B ($60000, $16000), C ($70000, $16400), D ($60000, $17000), and E ($60000, $15000)are plotted.The curve labelled, Production function 1, passes through point E.The curve labelled, Production function 2, passes through points A, B, and C.The curve labelled, Production function 3, passes through point D.These 5 points are connected to their respective coordinates on the x-axis and y-axis with dotted lines.
-Refer to Figure 7.4.Many countries in Africa strongly discouraged and prohibited foreign direct investment in the 1950s and 1960s.By doing so, these countries were essentially preventing a movement from

Accepted Answer

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

Question 8

Technological change allows the economy to produce more output with the same amount of capital and labour.

Accepted Answer

A) True 
 B)False

Question 9

In a small Asian country, it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million, assuming no technological change and no change in the hours of work?

Accepted Answer

A) GDP would increase further, but by less than $2 million. 
B) GDP would increase further by exactly $2 million. 
C) GDP would increase further by more than $2 million. 
D) GDP would increase further by exactly $8 million. 
E) GDP would increase further by more than $8 million. 
A) GDP would increase further, but by less than $2 million. 
B) GDP would increase further by exactly $2 million. 
C) GDP would increase further by more than $2 million. 
D) GDP would increase further by exactly $8 million. 
E) GDP would increase further by more than $8 million.

Question 10

Lack of investment in strong education and health care systems

Accepted Answer

A) causes a deterioration in human capital and a decline in labour productivity. 
B) causes a decline in physical capital and a decline in labour productivity. 
C) increases human capital and causes a decline in labour productivity. 
D) causes a deterioration in human capital and an increase in physical capital. 
E) cause better enforcement of the rule of law. 
A) causes a deterioration in human capital and a decline in labour productivity. 
B) causes a decline in physical capital and a decline in labour productivity. 
C) increases human capital and causes a decline in labour productivity. 
D) causes a deterioration in human capital and an increase in physical capital. 
E) cause better enforcement of the rule of law.

Question 11

The current low interest rates are seen as an indicator of secular stagnation because

Accepted Answer

A) the high savings rates of baby boomers. 
B) insufficient demand for investment spending. 
C) increases in government borrowing. 
D) increases in consumer debt. 
E) increasing net exports. 
A) the high savings rates of baby boomers. 
B) insufficient demand for investment spending. 
C) increases in government borrowing. 
D) increases in consumer debt. 
E) increasing net exports.

Question 12

Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

Accepted Answer

A) increasing 
B) decreasing 
C) constant 
D) negative 
E) zero 
A) increasing 
B) decreasing 
C) constant 
D) negative 
E) zero

Question 13

According to Joseph Schumpeter, which of the factors of production is central to economic growth?

Accepted Answer

A) land 
B) labour 
C) natural resources 
D) the entrepreneur 
E) human capital 
A) land 
B) labour 
C) natural resources 
D) the entrepreneur 
E) human capital

Question 14

Corruption

Accepted Answer

A) curtails economic growth. 
B) raises the rate of growth as bribes enhance income. 
C) is eliminated by foreign direct investment. 
D) acts as a magnet for foreign direct investment. 
E) is a necessary result of economic growth. 
A) curtails economic growth. 
B) raises the rate of growth as bribes enhance income. 
C) is eliminated by foreign direct investment. 
D) acts as a magnet for foreign direct investment. 
E) is a necessary result of economic growth.

Question 15

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300.Based on this information, what is the slope of the per-worker production function in this range?

Accepted Answer

A) 0.03 
B) 0.3 
C) 3.3 
D) 33.3 
E) 333 
A) 0.03 
B) 0.3 
C) 3.3 
D) 33.3 
E) 333

Question 16

Unemployment insurance is usually available to workers in ________ for a shorter period of time than it is in ________.

Accepted Answer

A) the United States; Canada 
B) Canada and some Western European countries; the United States 
C) Canada; some Western European countries 
D) some Western European countries; the United States 
E) Western Canada; the Maritimes 
A) the United States; Canada 
B) Canada and some Western European countries; the United States 
C) Canada; some Western European countries 
D) some Western European countries; the United States 
E) Western Canada; the Maritimes

Question 17

Knowledge capital is

Accepted Answer

A) rival. 
B) nonrival. 
C) nonexcludable. 
D) both B and C 
A) rival. 
B) nonrival. 
C) nonexcludable. 
D) both B and C

Question 18

Figure 7.1   Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1. Which of the following could cause an economy to move from point C to B?

Accepted Answer

A) Restrictions on foreign direct investment and international migration. 
B) Government funding of universities. 
C) Policies that encourage firms to adopt new production technology. 
D) The introduction of computer coding classes in primary education. 
E) An economy gaining more capital. 
A) Restrictions on foreign direct investment and international migration. 
B) Government funding of universities. 
C) Policies that encourage firms to adopt new production technology. 
D) The introduction of computer coding classes in primary education. 
E) An economy gaining more capital.

Question 19

The period of time from 1 000 000 BCE to 1300 CE was a period of

Accepted Answer

A) no sustained economic growth. 
B) slow and steady economic growth. 
C) moderate economic growth. 
D) rapid and sustained economic growth. 
E) rapidly accelerating economic growth. 
A) no sustained economic growth. 
B) slow and steady economic growth. 
C) moderate economic growth. 
D) rapid and sustained economic growth. 
E) rapidly accelerating economic growth.

Question 20

Figure 7.1   Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1.Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected 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) C to A. 
E) B to D. 
A) A to B. 
B) B to C. 
C) B to A. 
D) C to A. 
E) B to D.

Of all industrialized nations, real GDP per capita was the highest in Canada in 2010.

Consider two countries, Alpha and Beta.In Alpha, real GDP per capita is $6,000.In Beta, real GDP per capita is $9,000.Based on the economic growth model, what would you predict about the growth rates in real GDP per capita across these two countries?

The economic growth model predicts that ________ across countries will converge over time.

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Which of the following policies are designed specifically to directly promote technological change in an economy?

Technological change allows the economy to produce more output with the same amount of capital and labour.

Lack of investment in strong education and health care systems

The current low interest rates are seen as an indicator of secular stagnation because

Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

According to Joseph Schumpeter, which of the factors of production is central to economic growth?

Corruption

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300.Based on this information, what is the slope of the per-worker production function in this range?

Unemployment insurance is usually available to workers in for a shorter period of time than it is in .

Knowledge capital is

The period of time from 1 000 000 BCE to 1300 CE was a period of

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

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 Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 7: Long-Run Economic Growth: Sources and Policies

Of all industrialized nations, real GDP per capita was the highest in Canada in 2010.

Consider two countries, Alpha and Beta.In Alpha, real GDP per capita is $6,000.In Beta, real GDP per capita is $9,000.Based on the economic growth model, what would you predict about the growth rates in real GDP per capita across these two countries?

The economic growth model predicts that ________ across countries will converge over time.

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Which of the following policies are designed specifically to directly promote technological change in an economy?

Technological change allows the economy to produce more output with the same amount of capital and labour.

Lack of investment in strong education and health care systems

The current low interest rates are seen as an indicator of secular stagnation because

Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to human capital.

According to Joseph Schumpeter, which of the factors of production is central to economic growth?

Corruption

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300.Based on this information, what is the slope of the per-worker production function in this range?

Unemployment insurance is usually available to workers in ________ for a shorter period of time than it is in ________.

Knowledge capital is

The period of time from 1 000 000 BCE to 1300 CE was a period of

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

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 Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Unemployment insurance is usually available to workers in for a shorter period of time than it is in .