Question 1

The historical record for the United States since 1900 shows

Accepted Answer

A)  mostly positive economic growth, with two substantial periods of negative economic growth. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per capita real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century. 
A)  mostly positive economic growth, with two substantial periods of negative economic growth. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per capita real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century.

Question 2

Which of the following is a true statement concerning economic growth?

Accepted Answer

A)  Changes in per capita nominal GDP are used to measure economic growth because population growth can distort the figures and we want to use the nominal amounts since that is what people identify with. 
B)  Changes in per capita nominal GDP are used to measure economic growth, but there are serious problems concerning the desirability of using figures that do not account for pollution and urban sprawl. 
C)  Changes in per capita real GDP are used to measure economic growth because this accurately measures all the differences in living standards across countries. 
D)  Changes in per capita real GDP are used to measure economic growth because inflation and population growth can distort nominal GDP figures or total GDP figures. 
A)  Changes in per capita nominal GDP are used to measure economic growth because population growth can distort the figures and we want to use the nominal amounts since that is what people identify with. 
B)  Changes in per capita nominal GDP are used to measure economic growth, but there are serious problems concerning the desirability of using figures that do not account for pollution and urban sprawl. 
C)  Changes in per capita real GDP are used to measure economic growth because this accurately measures all the differences in living standards across countries. 
D)  Changes in per capita real GDP are used to measure economic growth because inflation and population growth can distort nominal GDP figures or total GDP figures.

Question 3

The development of a strain of wheat that will yield two crops per year rather than one crop per year is an example of economic growth resulting from

Accepted Answer

A)  capital accumulation. 
B)  increased gross investment. 
C)  technological progress. 
D)  an increase in per capita real income. 
A)  capital accumulation. 
B)  increased gross investment. 
C)  technological progress. 
D)  an increase in per capita real income.

Question 4

The definition of economic growth is the annual percentage

Accepted Answer

A)  increase in the per capita real GDP. 
B)  increase in the per capita nominal GDP. 
C)  increase in the total nominal GDP. 
D)  increase in total exports. 
A)  increase in the per capita real GDP. 
B)  increase in the per capita nominal GDP. 
C)  increase in the total nominal GDP. 
D)  increase in total exports.

Question 5

Economic growth can be defined as

Accepted Answer

A)  the rate of growth in the productivity of labor. 
B)  the rate of growth in the productivity of capital. 
C)  the rate of growth of labor plus the rate of depreciation of capital. 
D)  the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital. 
A)  the rate of growth in the productivity of labor. 
B)  the rate of growth in the productivity of capital. 
C)  the rate of growth of labor plus the rate of depreciation of capital. 
D)  the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital.

Question 6

The rate of economic growth will be faster if

Accepted Answer

A)  the rate of growth of the money supply is higher. 
B)  the rate of saving is higher. 
C)  the rate of growth of the population is higher. 
D)  consumption spending is greater. 
A)  the rate of growth of the money supply is higher. 
B)  the rate of saving is higher. 
C)  the rate of growth of the population is higher. 
D)  consumption spending is greater.

Question 7

According to Romer and other new growth theorists, what could poor countries do to stimulate greater economic growth?

Accepted Answer

According to new growth theory, poor cou

Question 8

Which of the following is true?

Accepted Answer

A)  Real standards of living can increase without any positive economic growth. 
B)  Real growth rates fail to account for by price level changes. 
C)  Real and nominal values are not related. 
D)  Real standards of living decrease with positive economic growth. 
A)  Real standards of living can increase without any positive economic growth. 
B)  Real growth rates fail to account for by price level changes. 
C)  Real and nominal values are not related. 
D)  Real standards of living decrease with positive economic growth.

Question 9

Free trade is viewed as key to economic development because

Accepted Answer

A)  it encourages a faster spread of technology. 
B)  it encourages a country's exports only. 
C)  it brings in expensive new technology. 
D)  none of the above is correct. 
A)  it encourages a faster spread of technology. 
B)  it encourages a country's exports only. 
C)  it brings in expensive new technology. 
D)  none of the above is correct.

Question 10

Whenever average output produced per worker during a specific time-period increases, then

Accepted Answer

A)  leisure time increases. 
B)  nominal GDP decreases. 
C)  labor productivity increases. 
D)  the standard of living goes down. 
A)  leisure time increases. 
B)  nominal GDP decreases. 
C)  labor productivity increases. 
D)  the standard of living goes down.

Question 11

Paul Romer's theory of economic growth differs from traditional theories in that

Accepted Answer

A)  Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital. 
B)  Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital. 
C)  Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant. 
D)  Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect. 
A)  Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital. 
B)  Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital. 
C)  Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant. 
D)  Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect.

Question 12

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Accepted Answer

A)  plentiful natural resources 
B)  openness to international trade. 
C)  an educated population 
D)  All of the above are correct. 
A)  plentiful natural resources 
B)  openness to international trade. 
C)  an educated population 
D)  All of the above are correct.

Question 13

The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of

Accepted Answer

A)  inflation. 
B)  productive activity. 
C)  personal well-being. 
D)  quality of life. 
A)  inflation. 
B)  productive activity. 
C)  personal well-being. 
D)  quality of life.

Question 14

The new growth theory of economic growth examines the interaction of

Accepted Answer

A)  labor and population. 
B)  regulations and capital expansion. 
C)  resources and labor productivity. 
D)  technology, research, and innovation. 
A)  labor and population. 
B)  regulations and capital expansion. 
C)  resources and labor productivity. 
D)  technology, research, and innovation.

Question 15

New growth theory is concerned with

Accepted Answer

A)  finding a good way to measure economic growth. 
B)  increasing the savings rate in the U.S. 
C)  understanding the forces that increase productivity. 
D)  understanding how compounding works. 
A)  finding a good way to measure economic growth. 
B)  increasing the savings rate in the U.S. 
C)  understanding the forces that increase productivity. 
D)  understanding how compounding works.

Question 16

Which one of the following is true?

Accepted Answer

A)  Investments in secondary education produce gains in the form of economic growth. 
B)  Secondary education does not boost economic growth in developing nations, because so much of the workforce remains in agriculture. 
C)  New growth theory suggests that there is no connection between the level of education in a country and its rate of economic growth. 
D)  New growth theory suggests that education benefits only those people who receive it, and not the population as a whole. 
A)  Investments in secondary education produce gains in the form of economic growth. 
B)  Secondary education does not boost economic growth in developing nations, because so much of the workforce remains in agriculture. 
C)  New growth theory suggests that there is no connection between the level of education in a country and its rate of economic growth. 
D)  New growth theory suggests that education benefits only those people who receive it, and not the population as a whole.

Question 17

Innovation typically increases when

Accepted Answer

A)  market incentives and private property rights are encouraged. 
B)  government controls the resource base. 
C)  high taxes are present. 
D)  the legal system is weak. 
A)  market incentives and private property rights are encouraged. 
B)  government controls the resource base. 
C)  high taxes are present. 
D)  the legal system is weak.

Question 18

Labor productivity is

Accepted Answer

A)  the average amount produced times the number of workers. 
B)  the average amount produced times the number of people in the labor force. 
C)  the average amount produced per worker. 
D)  the rate of change in the total amount produced per worker. 
A)  the average amount produced times the number of workers. 
B)  the average amount produced times the number of people in the labor force. 
C)  the average amount produced per worker. 
D)  the rate of change in the total amount produced per worker.

Question 19

An educated populace contributes to economic growth because

Accepted Answer

A)  schools provide many jobs for teachers. 
B)  education allows workers to develop skills that increase their productive capabilities. 
C)  educated people are more likely to live in poverty. 
D)  educated people understand the importance of protectionism. 
A)  schools provide many jobs for teachers. 
B)  education allows workers to develop skills that increase their productive capabilities. 
C)  educated people are more likely to live in poverty. 
D)  educated people understand the importance of protectionism.

Question 20

Human capital is

Accepted Answer

A)  the saving done by human beings. 
B)  the knowledge and skills that people in the work force acquire through education and training. 
C)  a measure of the labor productivity of workers. 
D)  the investment people make in industries that make capital goods. 
A)  the saving done by human beings. 
B)  the knowledge and skills that people in the work force acquire through education and training. 
C)  a measure of the labor productivity of workers. 
D)  the investment people make in industries that make capital goods.

Exam 9: Global Economic Growth and Development

The historical record for the United States since 1900 shows

Which of the following is a true statement concerning economic growth?

The development of a strain of wheat that will yield two crops per year rather than one crop per year is an example of economic growth resulting from

The definition of economic growth is the annual percentage

Economic growth can be defined as

The rate of economic growth will be faster if

According to Romer and other new growth theorists, what could poor countries do to stimulate greater economic growth?

Which of the following is true?

Free trade is viewed as key to economic development because

Whenever average output produced per worker during a specific time-period increases, then

Paul Romer's theory of economic growth differs from traditional theories in that

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of

The new growth theory of economic growth examines the interaction of

New growth theory is concerned with

Which one of the following is true?

Innovation typically increases when

Labor productivity is

An educated populace contributes to economic growth because

Human capital is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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