Question 1

Which of the following is used to calculate the standard of living?

Accepted Answer

A)  real GDP/population 
B)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) × 100 
C)  the one-third rule 
D)  real GDP/aggregate hours 
A)  real GDP/population 
B)  ((real GDP in the current year - real GDP in previous year)/real GDP in previous year) × 100 
C)  the one-third rule 
D)  real GDP/aggregate hours

Question 2

Because of the choices people make in the pursuit of profit, new growth theory argues that

Accepted Answer

A)  technology growth slows down in the long-run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the capital stock experiences diminishing returns. 
D)  the economy can enjoy persisting economic growth. 
A)  technology growth slows down in the long-run. 
B)  population growth increases will bring real GDP per person back to subsistence level. 
C)  the capital stock experiences diminishing returns. 
D)  the economy can enjoy persisting economic growth.

Question 3

Which of the following is consistent with classical growth theory?

Accepted Answer

A)  Real GDP per person will increase because technological change induces investment. 
B)  Real GDP per person will never permanently increase. 
C)  Competition destroys innovation and decreases profit. 
D)  As real GDP increases, there will be a decrease in the rate of population growth. 
A)  Real GDP per person will increase because technological change induces investment. 
B)  Real GDP per person will never permanently increase. 
C)  Competition destroys innovation and decreases profit. 
D)  As real GDP increases, there will be a decrease in the rate of population growth.

Question 4

Using the Rule of 70, if the country of Huttodom's current growth rate of real GDP per person was 10 percent a year, how long would it take the country's real GDP per person to double?

Accepted Answer

A)  0.7 years 
B)  20 years 
C)  7 years 
D)  10 years 
A)  0.7 years 
B)  20 years 
C)  7 years 
D)  10 years

Question 5

What are the sources of human capital?

Accepted Answer

Human capital, the accumulated skills an

Question 6

Human capital is, in part, the

Accepted Answer

A)  amount of money held by a worker. 
B)  stock of knowledge of a worker. 
C)  stock of plant and equipment. 
D)  stock of financial assets held by the public. 
A)  amount of money held by a worker. 
B)  stock of knowledge of a worker. 
C)  stock of plant and equipment. 
D)  stock of financial assets held by the public.

Question 7

According to the new growth theory, competition

Accepted Answer

A)  reduces profit. 
B)  increases profit. 
C)  has no impact on real profit, only nominal profit. 
D)  is only theoretical because all firms are growing at some rate. 
A)  reduces profit. 
B)  increases profit. 
C)  has no impact on real profit, only nominal profit. 
D)  is only theoretical because all firms are growing at some rate.

Question 8

Slowdonia's current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Accepted Answer

A)  10 years 
B)  35 years 
C)  70 years 
D)  100 years 
A)  10 years 
B)  35 years 
C)  70 years 
D)  100 years

Question 9

Labor productivity equals

Accepted Answer

A)  real GDP divided by the capital stock. 
B)  real GDP divided by the working-age population. 
C)  total wages divided by real GDP. 
D)  real GDP divided by aggregate labor hours. 
A)  real GDP divided by the capital stock. 
B)  real GDP divided by the working-age population. 
C)  total wages divided by real GDP. 
D)  real GDP divided by aggregate labor hours.

Question 10

Since 1960

Accepted Answer

A)  in every decade, Japan has experienced faster growth than the United States. 
B)  growth rates in South American countries have exceeded those in North America. 
C)  real GDP per person in Hong Kong and Singapore have grown and are approaching or surpassing that in the United States. 
D)  due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States. 
A)  in every decade, Japan has experienced faster growth than the United States. 
B)  growth rates in South American countries have exceeded those in North America. 
C)  real GDP per person in Hong Kong and Singapore have grown and are approaching or surpassing that in the United States. 
D)  due to rapid growth, real GDP per person in China is now about 50 percent of that in the United States.

Question 11

A higher saving rate leads to faster growth because

Accepted Answer

A)  more saving produces greater additions to capital per hour of labor, raising real GDP per person. 
B)  capital would wear out faster. 
C)  people could consume more of an economy's output. 
D)  population growth would accelerate. 
A)  more saving produces greater additions to capital per hour of labor, raising real GDP per person. 
B)  capital would wear out faster. 
C)  people could consume more of an economy's output. 
D)  population growth would accelerate.

Question 12

The labor demand curve slopes downward because

Accepted Answer

A)  the firm maximizes profits by hiring more labor when the real wage rate rises. 
B)  workers supply more hours of work when the real wage rate rises. 
C)  the firm maximizes profits by hiring more labor when the real wage rate falls. 
D)  workers supply fewer hours of work when the real wage rate rises. 
A)  the firm maximizes profits by hiring more labor when the real wage rate rises. 
B)  workers supply more hours of work when the real wage rate rises. 
C)  the firm maximizes profits by hiring more labor when the real wage rate falls. 
D)  workers supply fewer hours of work when the real wage rate rises.

Question 13

Neoclassical growth theory is based on the proposition that real GDP per person grows when

Accepted Answer

A)  the population growth rate increases. 
B)  the population growth rate decreases. 
C)  technological advances occur. 
D)  saving decreases. 
A)  the population growth rate increases. 
B)  the population growth rate decreases. 
C)  technological advances occur. 
D)  saving decreases.

Question 14

In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012?

Accepted Answer

A)  0.38 percent 
B)  9.0 percent 
C)  3.8 percent 
D)  8.3 percent 
A)  0.38 percent 
B)  9.0 percent 
C)  3.8 percent 
D)  8.3 percent

Question 15

Population increases are the limiting factor in the growth process in

Accepted Answer

A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory. 
A)  classical growth theory. 
B)  neoclassical growth theory. 
C)  the new growth theory. 
D)  real growth theory.

Question 16

The best definition for economic growth is

Accepted Answer

A)  a sustained expansion of production possibilities measured as the increase in real GDP over a given period. 
B)  a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. 
C)  a sustained expansion of consumption goods over a given period. 
D)  a sustained expansion of production goods over a given period. 
A)  a sustained expansion of production possibilities measured as the increase in real GDP over a given period. 
B)  a sustained expansion of production possibilities measured as the increase in nominal GDP over a given period. 
C)  a sustained expansion of consumption goods over a given period. 
D)  a sustained expansion of production goods over a given period.

Question 17

The relationship between education and economic growth can best be summarized by saying that

Accepted Answer

A)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
B)  educational expenditures tend to divert funds from productive investments, which discourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  education has benefits beyond those who receive the education, which encourages economic growth. 
A)  educated people are less apt to consume goods that deplete economic resources, which encourages economic growth. 
B)  educational expenditures tend to divert funds from productive investments, which discourages economic growth. 
C)  educational expenditures tend to be inflationary, which discourages economic growth. 
D)  education has benefits beyond those who receive the education, which encourages economic growth.

Question 18

-In the above figure, the equilibrium level of labor is

Accepted Answer

A)  100 billion hours. 
B)  150 billion hours. 
C)  200 billion hours. 
D)  none of the above 
A)  100 billion hours. 
B)  150 billion hours. 
C)  200 billion hours. 
D)  none of the above

Question 19

Neoclassical growth theory

Accepted Answer

A)  predicts that growth rates and incomes per person throughout the world will converge. 
B)  predicts that the faster growing underdeveloped nations will overtake and then surpass the industrial nations. 
C)  predicts that nations that enjoy a technological advantage will maintain that advantage. 
D)  makes no predictions about the relative growth or incomes among countries. 
A)  predicts that growth rates and incomes per person throughout the world will converge. 
B)  predicts that the faster growing underdeveloped nations will overtake and then surpass the industrial nations. 
C)  predicts that nations that enjoy a technological advantage will maintain that advantage. 
D)  makes no predictions about the relative growth or incomes among countries.

Question 20

What happens to the real wage rate and potential GDP if population increases?

Accepted Answer

An increase in population increases the

Which of the following is used to calculate the standard of living?

Because of the choices people make in the pursuit of profit, new growth theory argues that

Which of the following is consistent with classical growth theory?

Using the Rule of 70, if the country of Huttodom's current growth rate of real GDP per person was 10 percent a year, how long would it take the country's real GDP per person to double?

What are the sources of human capital?

Human capital is, in part, the

According to the new growth theory, competition

Slowdonia's current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Labor productivity equals

Since 1960

A higher saving rate leads to faster growth because

The labor demand curve slopes downward because

Neoclassical growth theory is based on the proposition that real GDP per person grows when

In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012?

Population increases are the limiting factor in the growth process in

The best definition for economic growth is

The relationship between education and economic growth can best be summarized by saying that

-In the above figure, the equilibrium level of labor is

Neoclassical growth theory

What happens to the real wage rate and potential GDP if population increases?

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 6: Economic Growth

Which of the following is used to calculate the standard of living?

Because of the choices people make in the pursuit of profit, new growth theory argues that

Which of the following is consistent with classical growth theory?

Using the Rule of 70, if the country of Huttodom's current growth rate of real GDP per person was 10 percent a year, how long would it take the country's real GDP per person to double?

What are the sources of human capital?

Human capital is, in part, the

According to the new growth theory, competition

Slowdonia's current growth rate of real GDP per person is 1 percent a year. Approximately how long will it take to double real GDP per person?

Labor productivity equals

Since 1960

A higher saving rate leads to faster growth because

The labor demand curve slopes downward because

Neoclassical growth theory is based on the proposition that real GDP per person grows when

In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012, real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012?

Population increases are the limiting factor in the growth process in

The best definition for economic growth is

The relationship between education and economic growth can best be summarized by saying that

-In the above figure, the equilibrium level of labor is

Neoclassical growth theory

What happens to the real wage rate and potential GDP if population increases?

What Is Economics?

The Economic Problem

Demand and Supply

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters