Question 1

According to Romer,

Accepted Answer

A)  capital drives economic growth. 
B)  invention drives economic growth. 
C)  ideas drive economic growth. 
D)  government drives economic growth. 
A)  capital drives economic growth. 
B)  invention drives economic growth. 
C)  ideas drive economic growth. 
D)  government drives economic growth.

Question 2

Which of the following factors would economists consider "key" to economic development?

Accepted Answer

A)  expansionary monetary policy 
B)  establishing a system of property rights 
C)  policies that promote consumption expenditures by households 
D)  All of the above are correct 
A)  expansionary monetary policy 
B)  establishing a system of property rights 
C)  policies that promote consumption expenditures by households 
D)  All of the above are correct

Question 3

A patent is

Accepted Answer

A)  a bond issued by the government. 
B)  a bond issued by a state. 
C)  the monopoly right given to a producer/company. 
D)  an agreement between a union and management on certain labor issues. 
A)  a bond issued by the government. 
B)  a bond issued by a state. 
C)  the monopoly right given to a producer/company. 
D)  an agreement between a union and management on certain labor issues.

Question 4

It can be argued that Thomas Malthus' An Essay on the Principle of Population statement that population growth will always outstrip food production has been discredited due to

Accepted Answer

A)  increase in the world-wide farming population. 
B)  less world-wide consumption of grains. 
C)  improvement in technology of food production. 
D)  increase in food processing facilities. 
A)  increase in the world-wide farming population. 
B)  less world-wide consumption of grains. 
C)  improvement in technology of food production. 
D)  increase in food processing facilities.

Question 5

Explain Paul Romer's ideas concerning economic growth.

Accepted Answer

Romer argues that knowledge is a factor

Question 6

Which of the following is NOT a reason that free trade stimulates economic growth?

Accepted Answer

A)  Free trade encourages a more rapid spread of technology. 
B)  Industries have larger markets. 
C)  The importation of technically advanced products enables the country to imitate the technology. 
D)  Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development. 
A)  Free trade encourages a more rapid spread of technology. 
B)  Industries have larger markets. 
C)  The importation of technically advanced products enables the country to imitate the technology. 
D)  Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development.

Question 7

Countries with higher rates of saving

Accepted Answer

A)  experience lower growth rates in the future. 
B)  have a large population. 
C)  have a greater number of poor people. 
D)  have higher rates of growth. 
A)  experience lower growth rates in the future. 
B)  have a large population. 
C)  have a greater number of poor people. 
D)  have higher rates of growth.

Question 8

Creative destruction refers to

Accepted Answer

A)  the destruction of the government system which limits economic growth. 
B)  the movement from an agricultural society to a service economy. 
C)  the mechanism for establishing property rights. 
D)  the creation of new jobs and economic growth after destroying old jobs. 
A)  the destruction of the government system which limits economic growth. 
B)  the movement from an agricultural society to a service economy. 
C)  the mechanism for establishing property rights. 
D)  the creation of new jobs and economic growth after destroying old jobs.

Question 9

Economic growth may understate changes in standards of living if

Accepted Answer

A)  the growth is accompanied by increasing congestion. 
B)  leisure time is also increasing. 
C)  the types of jobs generated feelings of alienation. 
D)  deflation is taking place. 
A)  the growth is accompanied by increasing congestion. 
B)  leisure time is also increasing. 
C)  the types of jobs generated feelings of alienation. 
D)  deflation is taking place.

Question 10

When the government grants an inventor a patent,

Accepted Answer

A)  he has the exclusive right to make, sell or use his invention for 5 years. 
B)  the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. 
C)  the patent holder is guaranteed a profit on his invention. 
D)  the protection of a current invention would increase spending on R&D. 
A)  he has the exclusive right to make, sell or use his invention for 5 years. 
B)  the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. 
C)  the patent holder is guaranteed a profit on his invention. 
D)  the protection of a current invention would increase spending on R&D.

Question 11

The development of new products through research and development in new growth theory is important because

Accepted Answer

A)  there can be a positive impact on future growth. 
B)  society's scarce resources are being used when they could be used for current consumption. 
C)  it will lead to a reduction in the savings rate. 
D)  new patents are created. 
A)  there can be a positive impact on future growth. 
B)  society's scarce resources are being used when they could be used for current consumption. 
C)  it will lead to a reduction in the savings rate. 
D)  new patents are created.

Question 12

Labor productivity measures

Accepted Answer

A)  the growth of per capita real GDP. 
B)  the growth of real output. 
C)  real output per labor hour. 
D)  the growth in the quantity of labor. 
A)  the growth of per capita real GDP. 
B)  the growth of real output. 
C)  real output per labor hour. 
D)  the growth in the quantity of labor.

Question 13

What can be expected to happen in a country that enacts trade barriers?

Accepted Answer

A)  The rate of immigration will increase. 
B)  The rate of technological innovation will increase. 
C)  The rate of economic growth will decrease. 
D)  The rate of population growth will decrease. 
A)  The rate of immigration will increase. 
B)  The rate of technological innovation will increase. 
C)  The rate of economic growth will decrease. 
D)  The rate of population growth will decrease.

Question 14

Which of the following will cause an increase in economic growth?

Accepted Answer

A)  an increase in human capital 
B)  a reduction in the stock of physical capital 
C)  a reduction in the unemployment rate 
D)  a reduction in labor force participation 
A)  an increase in human capital 
B)  a reduction in the stock of physical capital 
C)  a reduction in the unemployment rate 
D)  a reduction in labor force participation

Question 15

Which of the following variables can be used to measure labor productivity?

Accepted Answer

A)  real GDP 
B)  number of workers 
C)  number of labor hours 
D)  all of the above 
A)  real GDP 
B)  number of workers 
C)  number of labor hours 
D)  all of the above

Question 16

Giving up consumption today for consumption tomorrow accelerates economic growth by

Accepted Answer

A)  having the economy produce no consumer goods. 
B)  increasing saving out of disposable income. 
C)  increasing the expected rate of inflation. 
D)  rapid expansion of the money supply. 
A)  having the economy produce no consumer goods. 
B)  increasing saving out of disposable income. 
C)  increasing the expected rate of inflation. 
D)  rapid expansion of the money supply.

Question 17

Which of the following statements is NOT true about economic growth?

Accepted Answer

A)  When growth occurs the production possibilities curve shifts outward. 
B)  Growth represents an increase in a nation's productive capacity. 
C)  Growth is measured as the overall level of real GDP. 
D)  Growth generally means that overall the members of the nation are better off materially. 
A)  When growth occurs the production possibilities curve shifts outward. 
B)  Growth represents an increase in a nation's productive capacity. 
C)  Growth is measured as the overall level of real GDP. 
D)  Growth generally means that overall the members of the nation are better off materially.

Question 18

A one percentage point in the growth rate

Accepted Answer

A)  does not make much difference in the long run per capita real GDP. 
B)  will not influence the real standard of living in a country. 
C)  can make a big difference in the per capita real GDP because of urban congestion. 
D)  can make a big difference in the per capita real GDP because of compounding. 
A)  does not make much difference in the long run per capita real GDP. 
B)  will not influence the real standard of living in a country. 
C)  can make a big difference in the per capita real GDP because of urban congestion. 
D)  can make a big difference in the per capita real GDP because of compounding.

Question 19

New growth theory supports the idea that I. economic growth can continue as long as we keep finding new ideas.
II) increases in human capital can lead to greater rates of economic growth.

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Question 20

Recently economists have added what factor as a major explanation of economic growth?

Accepted Answer

A)  The growth rate of labor 
B)  The growth rate of capital 
C)  The growth rate in labor and capital productivity 
D)  Technology 
A)  The growth rate of labor 
B)  The growth rate of capital 
C)  The growth rate in labor and capital productivity 
D)  Technology

Exam 9: Global Economic Growth and Development

According to Romer,

Which of the following factors would economists consider "key" to economic development?

A patent is

It can be argued that Thomas Malthus' An Essay on the Principle of Population statement that population growth will always outstrip food production has been discredited due to

Explain Paul Romer's ideas concerning economic growth.

Which of the following is NOT a reason that free trade stimulates economic growth?

Countries with higher rates of saving

Creative destruction refers to

Economic growth may understate changes in standards of living if

When the government grants an inventor a patent,

The development of new products through research and development in new growth theory is important because

Labor productivity measures

What can be expected to happen in a country that enacts trade barriers?

Which of the following will cause an increase in economic growth?

Which of the following variables can be used to measure labor productivity?

Giving up consumption today for consumption tomorrow accelerates economic growth by

Which of the following statements is NOT true about economic growth?

A one percentage point in the growth rate

New growth theory supports the idea that I. economic growth can continue as long as we keep finding new ideas. II) increases in human capital can lead to greater rates of economic growth.

Recently economists have added what factor as a major explanation of economic growth?

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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