Question 1

In 2010, of the following which nations had the highest level of real GDP per person?

Accepted Answer

A)  Japan 
B)  Europe Big 4 
C)  Canada 
D)  China 
A)  Japan 
B)  Europe Big 4 
C)  Canada 
D)  China

Question 2

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

Accepted Answer

A) True 
 B)False

Question 3

During 2013, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2012, real GDP was 105 billion and the population was 0.85 billion. Economia's growth rate of real GDP per person is

Accepted Answer

A)  3.23 percent. 
B)  5 percent. 
C)  5.88 percent. 
D)  9.52 percent. 
A)  3.23 percent. 
B)  5 percent. 
C)  5.88 percent. 
D)  9.52 percent.

Question 4

The historical record for the United States for the past 100 years shows

Accepted Answer

A)  growth in real GDP per person during most years. 
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 person real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century. 
A)  growth in real GDP per person during most years. 
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 person real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century.

Question 5

The aggregate production function is graphed as

Accepted Answer

A)  a downward sloping curve. 
B)  an upward sloping straight line. 
C)  an upward sloping line that becomes flatter as the quantity of labor increases. 
D)  an upward sloping line that becomes steeper as the quantity of labor increases. 
A)  a downward sloping curve. 
B)  an upward sloping straight line. 
C)  an upward sloping line that becomes flatter as the quantity of labor increases. 
D)  an upward sloping line that becomes steeper as the quantity of labor increases.

Question 6

Equilibrium in the labor market

Accepted Answer

A)  cannot occur if the production function is shifting upward. 
B)  can happen only when actual GDP exceeds potential GDP. 
C)  means that resources are allocated inefficiently 
D)  occurs when actual GDP is equal to potential GDP 
A)  cannot occur if the production function is shifting upward. 
B)  can happen only when actual GDP exceeds potential GDP. 
C)  means that resources are allocated inefficiently 
D)  occurs when actual GDP is equal to potential GDP

Question 7

A key assumption of new growth theory is that

Accepted Answer

A)  all technological change is the result of luck. 
B)  higher incomes lead to a higher birth rate. 
C)  a successful innovator has the opportunity to earn a temporary, above-average profit. 
D)  the population growth rate is lower than the real interest rate. 
A)  all technological change is the result of luck. 
B)  higher incomes lead to a higher birth rate. 
C)  a successful innovator has the opportunity to earn a temporary, above-average profit. 
D)  the population growth rate is lower than the real interest rate.

Question 8

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Accepted Answer

A)  Population growth occurs, increasing the supply of labor. 
B)  Population growth occurs, shifting the labor supply curve leftward. 
C)  Growth is not possible so the demand for labor never changes. 
D)  Investment in capital decreases labor demand, decreasing the demand for labor. 
A)  Population growth occurs, increasing the supply of labor. 
B)  Population growth occurs, shifting the labor supply curve leftward. 
C)  Growth is not possible so the demand for labor never changes. 
D)  Investment in capital decreases labor demand, decreasing the demand for labor.

Question 9

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)
-In neoclassical growth theory, technological change ________.

Accepted Answer

A)  occurs by chance 
B)  is influenced by population growth 
C)  is influenced by the rate of economic growth 
D)  occurs at a steady rate 
A)  occurs by chance 
B)  is influenced by population growth 
C)  is influenced by the rate of economic growth 
D)  occurs at a steady rate

Question 10

What are the basic arguments of the classical growth theory?

Accepted Answer

The classical growth theory originated d

Question 11

The labor force participation rate

Accepted Answer

A)  does not change when the real wage rate changes. 
B)  decreases as the real wage rate rises. 
C)  increases as the real wage rate increases. 
D)  has an inverse effect of the supply of labor. 
A)  does not change when the real wage rate changes. 
B)  decreases as the real wage rate rises. 
C)  increases as the real wage rate increases. 
D)  has an inverse effect of the supply of labor.

Question 12

Savings is an important factor influencing economic growth because saving

Accepted Answer

A)  can finance new investment and capital formation. 
B)  helps the economy maintain the current level of total expenditures when a recession begins. 
C)  provides a fund for wages needed from any unexpected population growth. 
D)  All of the above answers are correct. 
A)  can finance new investment and capital formation. 
B)  helps the economy maintain the current level of total expenditures when a recession begins. 
C)  provides a fund for wages needed from any unexpected population growth. 
D)  All of the above answers are correct.

Question 13

The quantity of labor demanded depends on the

Accepted Answer

A)  money wage rate not the real wage rate. 
B)  real wage rate not the money wage rate. 
C)  price of output not the money wage rate nor the real wage rate. 
D)  money wage rate AND the real wage rate. 
A)  money wage rate not the real wage rate. 
B)  real wage rate not the money wage rate. 
C)  price of output not the money wage rate nor the real wage rate. 
D)  money wage rate AND the real wage rate.

Question 14

What is the role of profits in the neoclassical growth theory versus the new growth theory?

Accepted Answer

Profits play essentially no role in the

Question 15

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Accepted Answer

A)  investment in new capital 
B)  resource conservation 
C)  investment in human capital 
D)  discoveries of new technology 
A)  investment in new capital 
B)  resource conservation 
C)  investment in human capital 
D)  discoveries of new technology

Question 16

Between which pair of countries or continents listed below has real GDP per person converged the most since 1960?

Accepted Answer

A)  Canada and Japan 
B)  United States and Africa 
C)  United States and South America 
D)  Canada and South America 
A)  Canada and Japan 
B)  United States and Africa 
C)  United States and South America 
D)  Canada and South America

Question 17

When the population increases with no change in labor productivity, employment ________ and potential GDP ________.

Accepted Answer

A)  decreases; decreases 
B)  increases; increases 
C)  decreases; increases 
D)  increases; decreases 
A)  decreases; decreases 
B)  increases; increases 
C)  decreases; increases 
D)  increases; decreases

Question 18

A central proposition of the new growth theory is that

Accepted Answer

A)  growth will cease but prosperity will persist. 
B)  knowledge is not subject to diminishing returns. 
C)  government direction and oversight is necessary for consistent growth. 
D)  growth is often just an illusion fostered by growth accounting. 
A)  growth will cease but prosperity will persist. 
B)  knowledge is not subject to diminishing returns. 
C)  government direction and oversight is necessary for consistent growth. 
D)  growth is often just an illusion fostered by growth accounting.

Question 19

Classical economists believed that

Accepted Answer

A)  real GDP per person would rise above its subsistence level in the long run. 
B)  real GDP per person would never rise above its subsistence level in the long run. 
C)  the demand for labor increases when the population increases. 
D)  population growth decreases as real GDP per person rises. 
A)  real GDP per person would rise above its subsistence level in the long run. 
B)  real GDP per person would never rise above its subsistence level in the long run. 
C)  the demand for labor increases when the population increases. 
D)  population growth decreases as real GDP per person rises.

Question 20

Which of the following is NOT associated with the new growth theory?

Accepted Answer

A)  natural resources 
B)  research 
C)  technology 
D)  innovation 
A)  natural resources 
B)  research 
C)  technology 
D)  innovation

In 2010, of the following which nations had the highest level of real GDP per person?

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

During 2013, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2012, real GDP was 105 billion and the population was 0.85 billion. Economia's growth rate of real GDP per person is

The historical record for the United States for the past 100 years shows

The aggregate production function is graphed as

Equilibrium in the labor market

A key assumption of new growth theory is that

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

What are the basic arguments of the classical growth theory?

The labor force participation rate

Savings is an important factor influencing economic growth because saving

The quantity of labor demanded depends on the

What is the role of profits in the neoclassical growth theory versus the new growth theory?

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Between which pair of countries or continents listed below has real GDP per person converged the most since 1960?

When the population increases with no change in labor productivity, employment and potential GDP .

A central proposition of the new growth theory is that

Classical economists believed that

Which of the following is NOT associated with the new growth theory?

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

In 2010, of the following which nations had the highest level of real GDP per person?

The classical growth theory's view of the economy and its ability to achieve growth can be compared to a perpetual motion machine.

During 2013, the country of Economia had a real GDP of $115 billion and the population was 0.9 billion. In 2012, real GDP was 105 billion and the population was 0.85 billion. Economia's growth rate of real GDP per person is

The historical record for the United States for the past 100 years shows

The aggregate production function is graphed as

Equilibrium in the labor market

A key assumption of new growth theory is that

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

What are the basic arguments of the classical growth theory?

The labor force participation rate

Savings is an important factor influencing economic growth because saving

The quantity of labor demanded depends on the

What is the role of profits in the neoclassical growth theory versus the new growth theory?

Which of the following has NOT been one of the primary sources of economic growth over the last 200 years?

Between which pair of countries or continents listed below has real GDP per person converged the most since 1960?

When the population increases with no change in labor productivity, employment ________ and potential GDP ________.

A central proposition of the new growth theory is that

Classical economists believed that

Which of the following is NOT associated with the new growth theory?

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

When the population increases with no change in labor productivity, employment and potential GDP .