Question 1

Knowledge capital is ________ in production and ________.As a result, firms ________ free ride.

Accepted Answer

A) nonrival; nonexcludable; can 
B) nonrival; excludable; can 
C) rival; nonexcludable; cannot 
D) nonrival; nonexcludable; cannot 
E) rival; excludable; cannot 
A) nonrival; nonexcludable; can 
B) nonrival; excludable; can 
C) rival; nonexcludable; cannot 
D) nonrival; nonexcludable; cannot 
E) rival; excludable; cannot

Question 2

If the per-worker production function shifts up,

Accepted Answer

A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes flatter. 
D) negative technological change has occurred in the economy. 
E) future production will require more resources than in the past. 
A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes flatter. 
D) negative technological change has occurred in the economy. 
E) future production will require more resources than in the past.

Question 3

Which of the following is not an implication of secular stagnation?

Accepted Answer

A) Economic growth will resume as soon as savings increase. 
B) Economic growth requires higher levels of population growth. 
C) Falling costs of capital reduce the interest rate. 
D) Modern technology firms reduced need for capital reduces productivity. 
A) Economic growth will resume as soon as savings increase. 
B) Economic growth requires higher levels of population growth. 
C) Falling costs of capital reduce the interest rate. 
D) Modern technology firms reduced need for capital reduces productivity.

Question 4

The opportunity cost of being unemployed tends to be the highest in which of the following countries?

Accepted Answer

A) Canada 
B) the United States 
C) France 
D) the United Kingdom 
E) Sweden 
A) Canada 
B) the United States 
C) France 
D) the United Kingdom 
E) Sweden

Question 5

Growth in real GDP per person in Canada began to slow down during what period of time?

Accepted Answer

A) 1900-1949 
B) 1950-1972 
C) 1973-1994 
D) 1995-2008 
E) 2010-2015 
A) 1900-1949 
B) 1950-1972 
C) 1973-1994 
D) 1995-2008 
E) 2010-2015

Question 6

Table 7.7  
-Refer to Table 7.7.Consider the statistics in the table above in describing the following industrialized and developing countries.Are these consistent with the economic growth model? Briefly explain.

Accepted Answer

These statistics combine industrialized

Question 7

If an outflow of workers leaves a country with a smaller but more productive workforce and the capital per hour worked does not change, there will be ________ the per-worker production function in that country.

Accepted Answer

A) a movement up 
B) a movement down 
C) an upward shift of 
D) a downward shift of 
E) a flattening out of 
A) a movement up 
B) a movement down 
C) an upward shift of 
D) a downward shift of 
E) a flattening out of

Question 8

Secular stagnation is NOT caused by

Accepted Answer

A) slowing population growth. 
B) modern inflation technology firms use much less capital than older manufacturing firms. 
C) economic growth shifting to countries other than Canada. 
D) falling costs of capital equipment. 
A) slowing population growth. 
B) modern inflation technology firms use much less capital than older manufacturing firms. 
C) economic growth shifting to countries other than Canada. 
D) falling costs of capital equipment.

Question 9

In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of

Accepted Answer

A) declining populations. 
B) rapid increases in government debt. 
C) increases in outsourcing of the production of goods and services to low-income countries. 
D) increasing pollution and the depletion of natural resources. 
E) increasing corruption. 
A) declining populations. 
B) rapid increases in government debt. 
C) increases in outsourcing of the production of goods and services to low-income countries. 
D) increasing pollution and the depletion of natural resources. 
E) increasing corruption.

Question 10

There has been catch-up among the ________ countries, but there has not been catch-up among ________.

Accepted Answer

A) developing countries such as Niger; industrialized countries such as Japan 
B) industrialized countries such as Japan; all countries of the world 
C) developing countries such as Niger; all countries of the world 
D) all countries of the world together; industrialized countries such as Japan 
E) industrialized countries such as Canada; industrialized countries of Asia 
A) developing countries such as Niger; industrialized countries such as Japan 
B) industrialized countries such as Japan; all countries of the world 
C) developing countries such as Niger; all countries of the world 
D) all countries of the world together; industrialized countries such as Japan 
E) industrialized countries such as Canada; industrialized countries of Asia

Question 11

Figure 7.5   Alt text for Figure 7.5: In figure 7.5, a graph depicting the "catch-up line."
Long description for Figure 7.5: The x-axis is labelled, initial level of real GDP per capita.The y-axis is labelled, growth in real GDP per capita.A line slopes down from the top left corner to the end of the x-axis.2 points, A and B, are plotted on this line such that point A is on the top part of the line, and point B is on the bottom part of the line.
-Refer to Figure 7.5.Based on the "catch-up line" drawn above, poorer countries are more likely to be at a point like ________, where growth in GDP is relatively ________, while richer countries are more likely to be at a point like ________, where growth in GDP is relatively ________.

Accepted Answer

A) A; low; B; high 
B) A; high; B; low 
C) B; low; A; high 
D) B; high; A; low 
E) A; high; B; high 
A) A; low; B; high 
B) A; high; B; low 
C) B; low; A; high 
D) B; high; A; low 
E) A; high; B; high

Question 12

Political stability is not a prerequisite to economic growth.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

Accepted Answer

A) There are fewer government regulations in the United States regarding the way firms can hire and fire workers. 
B) The financial systems of foreign countries are generally more efficient than those in the United States. 
C) European countries have more flexible policies regarding the number of hours employees are permitted to work. 
D) Job mobility in the United States is more restricted than it is in many foreign countries. 
E) European countries have better infrastructure than the United States. 
A) There are fewer government regulations in the United States regarding the way firms can hire and fire workers. 
B) The financial systems of foreign countries are generally more efficient than those in the United States. 
C) European countries have more flexible policies regarding the number of hours employees are permitted to work. 
D) Job mobility in the United States is more restricted than it is in many foreign countries. 
E) European countries have better infrastructure than the United States.

Question 14

Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by

Accepted Answer

A) reducing physical capital. 
B) reducing human capital. 
C) increasing labour productivity. 
D) increasing technological change. 
E) increasing the incentive to save. 
A) reducing physical capital. 
B) reducing human capital. 
C) increasing labour productivity. 
D) increasing technological change. 
E) increasing the incentive to save.

Question 15

Why would knowledge capital exhibit increasing returns for an entire economy, but not for an individual firm?

Accepted Answer

A) Its non-rival nature means small gains in productivity can be enjoyed by thousands of firms at once. 
B) Its non-rival nature means that firms must compete to enjoy the benefits fo knowledge capital. 
C) Its non-excludable nature means that firms have an extra incentive to produce knowledge capital. 
D) Its non-excludable nature means that use by one firm does not reduce the benefit of knowledge capital to another. 
E) Its non-excludable nature means that small gains in productivity cannot be captured by just one firm. 
A) Its non-rival nature means small gains in productivity can be enjoyed by thousands of firms at once. 
B) Its non-rival nature means that firms must compete to enjoy the benefits fo knowledge capital. 
C) Its non-excludable nature means that firms have an extra incentive to produce knowledge capital. 
D) Its non-excludable nature means that use by one firm does not reduce the benefit of knowledge capital to another. 
E) Its non-excludable nature means that small gains in productivity cannot be captured by just one firm.

Question 16

Foreign direct investment in Canada increased 3.8 percent in 2011.This means that

Accepted Answer

A) people or firms in other countries increased their purchases of stocks and bonds in Canada by 3.8 percent in 2011. 
B) people or firms in Canada increased their purchases of stocks and bonds in foreign countries by 3.8 percent in 2011. 
C) people or firms in other countries increased their building or facilities of purchases of facilities in Canada by 3.8 percent in 2011. 
D) people or firms in Canada increased their building of facilities or purchases of facilities in foreign countries by 3.8 percent in 2011. 
E) 3)8 percent more Canadian workers took jobs in foreign countries in 2001. 
A) people or firms in other countries increased their purchases of stocks and bonds in Canada by 3.8 percent in 2011. 
B) people or firms in Canada increased their purchases of stocks and bonds in foreign countries by 3.8 percent in 2011. 
C) people or firms in other countries increased their building or facilities of purchases of facilities in Canada by 3.8 percent in 2011. 
D) people or firms in Canada increased their building of facilities or purchases of facilities in foreign countries by 3.8 percent in 2011. 
E) 3)8 percent more Canadian workers took jobs in foreign countries in 2001.

Question 17

Which of the following does not contribute to the explanation 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 and education. 
D) Countries that are relatively poor are more likely to have higher savings. 
E) Countries that are relatively poor or more likely to have free trade agreements with wealthy countries. 
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 and education. 
D) Countries that are relatively poor are more likely to have higher savings. 
E) Countries that are relatively poor or more likely to have free trade agreements with wealthy countries.

Question 18

The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.

Accepted Answer

A) True 
 B)False

Question 19

In a small European country, it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $12 million, assuming no technological change and no change in the hours of work?

Accepted Answer

A) GDP would increase further, but by less than $1 million. 
B) GDP would increase further by exactly $1 million. 
C) GDP would increase further by more than $1 million. 
D) GDP would increase further by exactly $4 million. 
E) GDP would increase further, but more than $4 million. 
A) GDP would increase further, but by less than $1 million. 
B) GDP would increase further by exactly $1 million. 
C) GDP would increase further by more than $1 million. 
D) GDP would increase further by exactly $4 million. 
E) GDP would increase further, but more than $4 million.

Question 20

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs, we say there is

Accepted Answer

A) human capital investment. 
B) technological change. 
C) an increase in labour productivity. 
D) a movement along a given per-worker production function. 
E) the accumulation of physical capital. 
A) human capital investment. 
B) technological change. 
C) an increase in labour productivity. 
D) a movement along a given per-worker production function. 
E) the accumulation of physical capital.

Knowledge capital is in production and .As a result, firms free ride.

If the per-worker production function shifts up,

Which of the following is not an implication of secular stagnation?

The opportunity cost of being unemployed tends to be the highest in which of the following countries?

Growth in real GDP per person in Canada began to slow down during what period of time?

Table 7.7 -Refer to Table 7.7.Consider the statistics in the table above in describing the following industrialized and developing countries.Are these consistent with the economic growth model? Briefly explain.

If an outflow of workers leaves a country with a smaller but more productive workforce and the capital per hour worked does not change, there will be ________ the per-worker production function in that country.

Secular stagnation is NOT caused by

In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of

There has been catch-up among the countries, but there has not been catch-up among .

Political stability is not a prerequisite to economic growth.

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by

Why would knowledge capital exhibit increasing returns for an entire economy, but not for an individual firm?

Foreign direct investment in Canada increased 3.8 percent in 2011.This means that

Which of the following does not contribute to the explanation 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?

The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs, we say there is

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

Knowledge capital is ________ in production and ________.As a result, firms ________ free ride.

If the per-worker production function shifts up,

Which of the following is not an implication of secular stagnation?

The opportunity cost of being unemployed tends to be the highest in which of the following countries?

Growth in real GDP per person in Canada began to slow down during what period of time?

Table 7.7 -Refer to Table 7.7.Consider the statistics in the table above in describing the following industrialized and developing countries.Are these consistent with the economic growth model? Briefly explain.

If an outflow of workers leaves a country with a smaller but more productive workforce and the capital per hour worked does not change, there will be ________ the per-worker production function in that country.

Secular stagnation is NOT caused by

In 1973, the Club of Rome published a book titled The Limits to Growth, which predicted that economic growth would likely end in high-income countries because of

There has been catch-up among the ________ countries, but there has not been catch-up among ________.

Political stability is not a prerequisite to economic growth.

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by

Why would knowledge capital exhibit increasing returns for an entire economy, but not for an individual firm?

Foreign direct investment in Canada increased 3.8 percent in 2011.This means that

Which of the following does not contribute to the explanation 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?

The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs, we say there is

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

Knowledge capital is in production and .As a result, firms free ride.

There has been catch-up among the countries, but there has not been catch-up among .