Question 1

Why might population growth and immigration stimulate economic growth?

Accepted Answer

Faster population growth means

Question 2

Explain how the "new growth theory" treats technology differently from the way economists used to treat technology.

Accepted Answer

Technology used to be treated as an outs

Question 3

Labor productivity can be increased if

Accepted Answer

A)  people spend less time developing skills before entering the workforce. 
B)  the government mandates it. 
C)  there is an increase in capital goods. 
D)  the standard of living declines. 
A)  people spend less time developing skills before entering the workforce. 
B)  the government mandates it. 
C)  there is an increase in capital goods. 
D)  the standard of living declines.

Question 4

How should per capita real Gross Domestic Product (GDP) be used?

Accepted Answer

A)  It is an accurate measure of economic well-being. 
B)  It is a reasonably good measure of productive activity. 
C)  Per capita real Gross Domestic Product (GDP) is a good gauge of a nation's quality of life because it takes into account a nation's cultural and spiritual values. 
D)  All of the above. 
A)  It is an accurate measure of economic well-being. 
B)  It is a reasonably good measure of productive activity. 
C)  Per capita real Gross Domestic Product (GDP) is a good gauge of a nation's quality of life because it takes into account a nation's cultural and spiritual values. 
D)  All of the above.

Question 5

Economic growth is

Accepted Answer

A)  an increase in the per person real production in a nation. 
B)  an increase in stock market values. 
C)  an increase in real estate values. 
D)  an increase in the number of people employed in agriculture. 
A)  an increase in the per person real production in a nation. 
B)  an increase in stock market values. 
C)  an increase in real estate values. 
D)  an increase in the number of people employed in agriculture.

Question 6

Which one of the following does NOT contribute to economic growth?

Accepted Answer

A)  the growth of capital and labor productivity 
B)  the growth of the capital stock 
C)  the growth of the labor force 
D)  increases in the price level 
A)  the growth of capital and labor productivity 
B)  the growth of the capital stock 
C)  the growth of the labor force 
D)  increases in the price level

Question 7

Which of the following is NOT an important factor affecting economic growth?

Accepted Answer

A)  The rate of saving 
B)  The growth of leisure 
C)  The rate of growth of capital 
D)  The rate of growth in labor productivity 
A)  The rate of saving 
B)  The growth of leisure 
C)  The rate of growth of capital 
D)  The rate of growth in labor productivity

Question 8

An increase in human capital will tend to cause which of the following?

Accepted Answer

A)  increase economic growth 
B)  increase the standard of living 
C)  increase labor productivity 
D)  all of the above 
A)  increase economic growth 
B)  increase the standard of living 
C)  increase labor productivity 
D)  all of the above

Question 9

Regarding open economies, economists tend to find evidence that

Accepted Answer

A)  the more closed an economy is, the higher the rate of growth the economy will experience. 
B)  trade tariffs tend to improve economic growth. 
C)  free trade encourages a more rapid spread of technology, and hence increases economic growth. 
D)  open economies tend to have access to smaller markets than do closed economies. 
A)  the more closed an economy is, the higher the rate of growth the economy will experience. 
B)  trade tariffs tend to improve economic growth. 
C)  free trade encourages a more rapid spread of technology, and hence increases economic growth. 
D)  open economies tend to have access to smaller markets than do closed economies.

Question 10

Which of the following would typically be considered a cost of economic growth?

Accepted Answer

A)  increased illiteracy 
B)  decreased levels of health 
C)  increased poverty 
D)  urban congestion 
A)  increased illiteracy 
B)  decreased levels of health 
C)  increased poverty 
D)  urban congestion

Question 11

Patents stimulate technological advance by

Accepted Answer

A)  making capital more productive. 
B)  enabling the government to determine which potential technological advances firms should pursue. 
C)  providing information about the status of technical knowledge in the economy. 
D)  allowing inventors to capture the economic rewards of their inventions. 
A)  making capital more productive. 
B)  enabling the government to determine which potential technological advances firms should pursue. 
C)  providing information about the status of technical knowledge in the economy. 
D)  allowing inventors to capture the economic rewards of their inventions.

Question 12

The term "creative destruction" refers to

Accepted Answer

A)  the process by which immigrants build a new life in their country of destination. 
B)  the process by which new jobs are created and old ones destroyed. 
C)  the effects of population growth on the environment. 
D)  All of the above are correct. 
A)  the process by which immigrants build a new life in their country of destination. 
B)  the process by which new jobs are created and old ones destroyed. 
C)  the effects of population growth on the environment. 
D)  All of the above are correct.

Question 13

Economic growth is best measured by increases in

Accepted Answer

A)  nominal personal income. 
B)  nominal Gross Domestic Product (GDP). 
C)  per capita real Gross Domestic Product (GDP). 
D)  per capita nominal Gross Domestic Product (GDP). 
A)  nominal personal income. 
B)  nominal Gross Domestic Product (GDP). 
C)  per capita real Gross Domestic Product (GDP). 
D)  per capita nominal Gross Domestic Product (GDP).

Question 14

According to the World Bank and the International Monetary Fund, which of the following countries has shown the greatest rate of economic growth in the past two decades?

Accepted Answer

A)  China 
B)  Germany 
C)  United States 
D)  Mexico 
A)  China 
B)  Germany 
C)  United States 
D)  Mexico

Question 15

The immediate effect of increased population growth, with real GDP growth unchanged, is to

Accepted Answer

A)  reduce economic growth by reducing per capita real GDP. 
B)  increase economic growth by stimulating more saving. 
C)  increase economic growth by boosting the capital stock. 
D)  leave economic growth unchanged. 
A)  reduce economic growth by reducing per capita real GDP. 
B)  increase economic growth by stimulating more saving. 
C)  increase economic growth by boosting the capital stock. 
D)  leave economic growth unchanged.

Question 16

New growth theory emphasizes all of the following EXCEPT

Accepted Answer

A)  technology. 
B)  import restrictions. 
C)  research and development. 
D)  innovation. 
A)  technology. 
B)  import restrictions. 
C)  research and development. 
D)  innovation.

Question 17

If we are interested in knowing whether a poor country is improving economically, we want to know not only what the economic growth rate is, but also

Accepted Answer

A)  whether the economic growth rate is faster than other nations' growth rates. 
B)  whether government spending is growing at the same rate. 
C)  whether the economic growth rate is greater than last year's rate. 
D)  whether the lowest income groups are benefiting from the growth. 
A)  whether the economic growth rate is faster than other nations' growth rates. 
B)  whether government spending is growing at the same rate. 
C)  whether the economic growth rate is greater than last year's rate. 
D)  whether the lowest income groups are benefiting from the growth.

Question 18

A key idea of the new growth theory is that

Accepted Answer

A)  technology is not an important determinant of economic growth. 
B)  economic growth is not as important as leisure time growth. 
C)  the greater the rewards for technological advances, the greater the number of technological advances. 
D)  the rewards associated with technological advances have little to do with the actual rate of invention or innovation. 
A)  technology is not an important determinant of economic growth. 
B)  economic growth is not as important as leisure time growth. 
C)  the greater the rewards for technological advances, the greater the number of technological advances. 
D)  the rewards associated with technological advances have little to do with the actual rate of invention or innovation.

Question 19

How does innovation differ from invention? Why is innovation required for economic growth?

Accepted Answer

Innovation involves the transformation o

Question 20

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?

Accepted Answer

A)  Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does. 
B)  Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C)  Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains. 
D)  Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth. 
A)  Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does. 
B)  Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C)  Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains. 
D)  Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth.

Exam 9: Global Economic Growth and Development

Why might population growth and immigration stimulate economic growth?

Explain how the "new growth theory" treats technology differently from the way economists used to treat technology.

Labor productivity can be increased if

How should per capita real Gross Domestic Product (GDP) be used?

Economic growth is

Which one of the following does NOT contribute to economic growth?

Which of the following is NOT an important factor affecting economic growth?

An increase in human capital will tend to cause which of the following?

Regarding open economies, economists tend to find evidence that

Which of the following would typically be considered a cost of economic growth?

Patents stimulate technological advance by

The term "creative destruction" refers to

Economic growth is best measured by increases in

According to the World Bank and the International Monetary Fund, which of the following countries has shown the greatest rate of economic growth in the past two decades?

The immediate effect of increased population growth, with real GDP growth unchanged, is to

New growth theory emphasizes all of the following EXCEPT

If we are interested in knowing whether a poor country is improving economically, we want to know not only what the economic growth rate is, but also

A key idea of the new growth theory is that

How does innovation differ from invention? Why is innovation required for economic growth?

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?

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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