Exam 6: Economic Growth

-The first table above gives the labor demand and labor supply schedules for a nation. The second table gives its production function. a)What are the equilibrium real wage rate and the level of employment? b)What is potential GDP?

Which of the following policy actions could speed productivity growth? I.Tax incentives to encourage saving II.Encouraging international trade III.Directing public funds toward financing basic research

Which one of the following statements about growth theories is CORRECT?

Which of the following ideas apply to the neoclassical growth theory? I.The rate of technological change influences the rate of economic growth. II.Technological change promotes saving and investment. III.Convergence of economic growth rates across countries

All of the following contribute to labor productivity growth EXCEPT

New growth theory predicts that

"According to the neoclassical growth theory, national incentives to save, invest, accumulate human capital, and develop new technology influence the country's growth rate of real GDP." Comment on the accuracy of the previous statement.

The growth rate of real GDP per person in the United States has

All of the following lead to more rapid economic growth EXCEPT

If capital per worker rises

An increase in education and training

The gap between real GDP per person in Africa and real GDP per person in the United States has been

An important foundation of the new growth theory is that

The higher the real wage rate, the higher the labor force participation rate.

Which of the following does NOT increase labor productivity?

New growth theory economists believe that: I.Economic growth can continue as long as we keep finding new ideas. II.The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

A recent article states that "...gains from two centuries of rapid technological innovation are largely exhausted, and new discoveries lack the same revolutionary quality....{Further}, 80 percent of the growth between 1950 and 1993 came from the new application of old ideas, and these old ideas are now mostly wrung dry." (The Economist, 03/03/2011) -If this quote is TRUE, what would the neoclassical growth theory predict?

If the money wage rate rises relative to the price level, firms ________ the quantity of labor they demand and workers ________ the quantity of labor they supply.

An increase in the population and hence the supply of labor causes a

The real wage rate will fall if the