Question 1

Is knowledge capital subject to the law of diminishing returns? Explain.

Accepted Answer

The law of diminishing returns states th

Question 2

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Accepted Answer

A) knowledge; increasing returns to scale; firm 
B) physical; decreasing returns to scale; firm 
C) knowledge; decreasing returns to scale; economy 
D) knowledge; increasing returns to scale; economy 
E) financial; constant returns to scale; economy 
A) knowledge; increasing returns to scale; firm 
B) physical; decreasing returns to scale; firm 
C) knowledge; decreasing returns to scale; economy 
D) knowledge; increasing returns to scale; economy 
E) financial; constant returns to scale; economy

Question 3

Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

Accepted Answer

A) Countries with a strong rule of law have faster economic growth. 
B) Countries with a weak rule of law have faster economic growth. 
C) Countries that enforce property rights through lawsuits have slower economic growth. 
D) Countries where favouritism and bribery are common have stronger rates of growth. 
E) Countries in which the government regularly takes control of industries have faster economic growth. 
A) Countries with a strong rule of law have faster economic growth. 
B) Countries with a weak rule of law have faster economic growth. 
C) Countries that enforce property rights through lawsuits have slower economic growth. 
D) Countries where favouritism and bribery are common have stronger rates of growth. 
E) Countries in which the government regularly takes control of industries have faster economic growth.

Question 4

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year, which of the following is true?

Accepted Answer

A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population. 
E) Nominal GDP per capita must be constant. 
A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population. 
E) Nominal GDP per capita must be constant.

Question 5

The purchase or building by a corporation of a facility in a foreign country is called

Accepted Answer

A) foreign direct investment. 
B) foreign portfolio investment. 
C) foreign capital depreciation. 
D) globally-directed investment. 
E) international capital acquisition. 
A) foreign direct investment. 
B) foreign portfolio investment. 
C) foreign capital depreciation. 
D) globally-directed investment. 
E) international capital acquisition.

Question 6

Canada

Accepted Answer

A) currently is one of the most corrupt countries. 
B) has never had a significant problem with corruption. 
C) had a significant problem with corruption in the 1930s. 
D) currently ranks among the least corrupt countries. 
E) currently has no dealings with nations where corruption is high. 
A) currently is one of the most corrupt countries. 
B) has never had a significant problem with corruption. 
C) had a significant problem with corruption in the 1930s. 
D) currently ranks among the least corrupt countries. 
E) currently has no dealings with nations where corruption is high.

Question 7

For how long does a patent give a firm the exclusive legal right to a product?

Accepted Answer

A) 10 years 
B) 17 years 
C) 20 years 
D) 50 years 
E) the life of the patent filer 
A) 10 years 
B) 17 years 
C) 20 years 
D) 50 years 
E) the life of the patent filer

Question 8

Employees who are employed for longer periods tend to have greater skills, greater productivity and higher wages.American workers tend to retire later and have fewer spells of long unemployment.This is due to

Accepted Answer

A) less generous payments for unemployment. 
B) fewer regulations around firms' abilities to fire workers. 
C) fewer restrictions around implementation of new technology. 
D) relatively little corruption. 
E) all of the above 
A) less generous payments for unemployment. 
B) fewer regulations around firms' abilities to fire workers. 
C) fewer restrictions around implementation of new technology. 
D) relatively little corruption. 
E) all of the above

Question 9

List two ways the labour force experience is different for workers in Canada and in the United States.How do these differences influence productivity?

Accepted Answer

It is harder to fire workers in Canada a

Question 10

Which of the following countries had the lowest GDP per capita in 2014?

Accepted Answer

A) France 
B) Mexico 
C) Central African Republic 
D) Argentina 
E) Singapore 
A) France 
B) Mexico 
C) Central African Republic 
D) Argentina 
E) Singapore

Question 11

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 $5 million to $6 million. If the number of hours worked in the labour force does not change, what does this information tell you about the slope of the per-worker production function in this range?

Accepted Answer

A) The slope is -4. 
B) The slope is 1/4. 
C) The slope is 2. 
D) The slope is 4. 
E) The slope is 8. 
A) The slope is -4. 
B) The slope is 1/4. 
C) The slope is 2. 
D) The slope is 4. 
E) The slope is 8.

Question 12

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A) the fifteenth century. 
B) the seventeenth century. 
C) the eighteenth century. 
D) the nineteenth century. 
E) the twentieth century. 
A) the fifteenth century. 
B) the seventeenth century. 
C) the eighteenth century. 
D) the nineteenth century. 
E) the twentieth century.

Question 13

Foreign investment can give a low-income country

Accepted Answer

A) access to funds for investment and access to technology. 
B) the means to slow down growth. 
C) a path to dependency and low growth. 
D) no hope to break the vicious cycle of poverty. 
E) decreased opportunities to engage in specialization and trade. 
A) access to funds for investment and access to technology. 
B) the means to slow down growth. 
C) a path to dependency and low growth. 
D) no hope to break the vicious cycle of poverty. 
E) decreased opportunities to engage in specialization and trade.

Question 14

Which of the following accurately describes economic growth and standards of living between   and 1300 CE?

Accepted Answer

A) Standards of living in 1300 CE were substantially better than what they were in 1,000,000 BCE. 
B) Standards of living substantially declined from 1,000,000 BCE to 1300 CE. 
C) Significant economic growth took place between 1,000,000 BCE and 1300 CE. 
D) No sustained economic growth occurred between 1,000,000 BCE and 1300 CE. 
E) Standards of living grew slowly, but steadily between 1,000,000 BCE and 1300 CE. 
A) Standards of living in 1300 CE were substantially better than what they were in 1,000,000 BCE. 
B) Standards of living substantially declined from 1,000,000 BCE to 1300 CE. 
C) Significant economic growth took place between 1,000,000 BCE and 1300 CE. 
D) No sustained economic growth occurred between 1,000,000 BCE and 1300 CE. 
E) Standards of living grew slowly, but steadily between 1,000,000 BCE and 1300 CE.

Question 15

An economic growth model

Accepted Answer

A) explains changes in nominal GDP per capita in the long run. 
B) explains changes in real GDP per capita in the long run. 
C) explains changes in nominal GDP per capita in the short run. 
D) explains changes in real GDP per capita in the short run. 
E) explains changes in the unemployment rates in the long run. 
A) explains changes in nominal GDP per capita in the long run. 
B) explains changes in real GDP per capita in the long run. 
C) explains changes in nominal GDP per capita in the short run. 
D) explains changes in real GDP per capita in the short run. 
E) explains changes in the unemployment rates in the long run.

Question 16

Developing countries with low saving rates and poor levels of health and education are likely to experience

Accepted Answer

A) high levels of foreign direct investment. 
B) easy access to financial backing from banks. 
C) rapid growth in household incomes. 
D) low rates of growth in real GDP per capita. 
E) lower birth rates. 
A) high levels of foreign direct investment. 
B) easy access to financial backing from banks. 
C) rapid growth in household incomes. 
D) low rates of growth in real GDP per capita. 
E) lower birth rates.

Question 17

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.Suppose the per-worker production function in the figure above represents the production function for the Canadian economy.If Canada decided to cut its support of university research in half, this would cause a movement from

Accepted Answer

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

Question 18

If property rights are not enforced in a country,

Accepted Answer

A) the market system will still work smoothly. 
B) entrepreneurs are unlikely to risk their own funds investing in such an economy. 
C) that country's growth rate will not be affected. 
D) that country will grow more rapidly because of the reduction of law suits. 
E) that country's growth will be high due to added incentive to innovate. 
A) the market system will still work smoothly. 
B) entrepreneurs are unlikely to risk their own funds investing in such an economy. 
C) that country's growth rate will not be affected. 
D) that country will grow more rapidly because of the reduction of law suits. 
E) that country's growth will be high due to added incentive to innovate.

Question 19

Table 7.3  
-Refer to Table 7.3.Use the table above to calculate the annual growth rate in GDP.Also calculate the total percentage change in the growth from 2008 through 2011.Explain the difference between the average annual growth rate in real per capita GDP from 2008 through 2011 and the total percentage change in growth from 2008 and 2011.

Accepted Answer

One calculates the average annual percen

Question 20

If real GDP per capita in Ireland is estimated to be $7,400 in 2012, what will real GDP per capita be in 2017 if real GDP per capita grows at an annual rate of 2.8%?

Accepted Answer

A) $7,607 
B) $8,496 
C) $9,472 
D) $20,720 
E) $21,375 
A) $7,607 
B) $8,496 
C) $9,472 
D) $20,720 
E) $21,375

Is knowledge capital subject to the law of diminishing returns? Explain.

New growth theory states that increases in capital will result in at the level.

Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year, which of the following is true?

The purchase or building by a corporation of a facility in a foreign country is called

Canada

For how long does a patent give a firm the exclusive legal right to a product?

Employees who are employed for longer periods tend to have greater skills, greater productivity and higher wages.American workers tend to retire later and have fewer spells of long unemployment.This is due to

List two ways the labour force experience is different for workers in Canada and in the United States.How do these differences influence productivity?

Which of the following countries had the lowest GDP per capita in 2014?

Growth in real GDP per capita for the world economy was greatest during

Foreign investment can give a low-income country

Which of the following accurately describes economic growth and standards of living between and 1300 CE?

An economic growth model

Developing countries with low saving rates and poor levels of health and education are likely to experience

If property rights are not enforced in a country,

If real GDP per capita in Ireland is estimated to be $7,400 in 2012, what will real GDP per capita be in 2017 if real GDP per capita grows at an annual rate of 2.8%?

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

Is knowledge capital subject to the law of diminishing returns? Explain.

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year, which of the following is true?

The purchase or building by a corporation of a facility in a foreign country is called

Canada

For how long does a patent give a firm the exclusive legal right to a product?

Employees who are employed for longer periods tend to have greater skills, greater productivity and higher wages.American workers tend to retire later and have fewer spells of long unemployment.This is due to

List two ways the labour force experience is different for workers in Canada and in the United States.How do these differences influence productivity?

Which of the following countries had the lowest GDP per capita in 2014?

Growth in real GDP per capita for the world economy was greatest during

Foreign investment can give a low-income country

Which of the following accurately describes economic growth and standards of living between and 1300 CE?

An economic growth model

Developing countries with low saving rates and poor levels of health and education are likely to experience

If property rights are not enforced in a country,

If real GDP per capita in Ireland is estimated to be $7,400 in 2012, what will real GDP per capita be in 2017 if real GDP per capita grows at an annual rate of 2.8%?

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

New growth theory states that increases in capital will result in at the level.