Question 1

The production function exhibits

Accepted Answer

A)  increasing returns to scale in human capital. 
B)  decreasing returns to scale in human capital. 
C)  constant returns to scale in human capital. 
D)  increasing marginal product of physical capital. 
E)  decreasing marginal product of human capital. 
A)  increasing returns to scale in human capital. 
B)  decreasing returns to scale in human capital. 
C)  constant returns to scale in human capital. 
D)  increasing marginal product of physical capital. 
E)  decreasing marginal product of human capital.

Question 2

What causes barriers to technology adoption?

Accepted Answer

A)  weather 
B)  population 
C)  political barriers to international trade 
D)  tax policies 
E)  the size of government 
A)  weather 
B)  population 
C)  political barriers to international trade 
D)  tax policies 
E)  the size of government

Question 3

In the endogenous growth models of Lucas and Romer,an increase in a worker's level of human capital

Accepted Answer

A)  increases the amount of additional human capital he or she can produce, but does not increase the amount of output she can produce. 
B)  increases the amount of additional output he or she can produce, but does not increase the amount of human capital she can produce. 
C)  increases both the amount of additional human capital he or she can produce and the amount of output she can produce. 
D)  increases neither the amount of additional human capital he or she can produce nor the amount of output she can produce. 
E)  increases both the amount of additional human capital he or she can produce and the amount of total factor productivity produced. 
A)  increases the amount of additional human capital he or she can produce, but does not increase the amount of output she can produce. 
B)  increases the amount of additional output he or she can produce, but does not increase the amount of human capital she can produce. 
C)  increases both the amount of additional human capital he or she can produce and the amount of output she can produce. 
D)  increases neither the amount of additional human capital he or she can produce nor the amount of output she can produce. 
E)  increases both the amount of additional human capital he or she can produce and the amount of total factor productivity produced.

Question 4

In the Solow growth model,countries with identical total factor productivities,identical labour force growth rates,and identical savings rates

Accepted Answer

A)  always have identical levels of capital per worker and output per worker. 
B)  in equilibrium, have identical levels of capital per worker and output per worker. 
C)  in equilibrium, have identical levels of capital per worker but not necessarily identical levels of output per worker. 
D)  in equilibrium, have identical levels of output per worker but not necessarily identical levels of capital per worker. 
E)  there is no convergence to the same level of capital per worker or output per worker. 
A)  always have identical levels of capital per worker and output per worker. 
B)  in equilibrium, have identical levels of capital per worker and output per worker. 
C)  in equilibrium, have identical levels of capital per worker but not necessarily identical levels of output per worker. 
D)  in equilibrium, have identical levels of output per worker but not necessarily identical levels of capital per worker. 
E)  there is no convergence to the same level of capital per worker or output per worker.

Question 5

Nonrivalry means

Accepted Answer

A)  it is impossible or extremely costly to prevent someone from benefitting from a good. 
B)  it is possible to prevent a person from enjoying the benefits of a good. 
C)  consumption of a good does not decrease the consumption of the good by another person. 
D)  the consumption of a good by one person decreases consumption of the good by another person. 
E)  the quantity of a good that a person is able to consume is not influenced by the amount the person pays for the good. 
A)  it is impossible or extremely costly to prevent someone from benefitting from a good. 
B)  it is possible to prevent a person from enjoying the benefits of a good. 
C)  consumption of a good does not decrease the consumption of the good by another person. 
D)  the consumption of a good by one person decreases consumption of the good by another person. 
E)  the quantity of a good that a person is able to consume is not influenced by the amount the person pays for the good.

Question 6

There are greater opportunities for taking advantage of human capital externalities

Accepted Answer

A)  in poorer countries. 
B)  in countries with high population growth rates. 
C)  in countries where there has been a convergence in incomes. 
D)  in countries where there is a convergence in technology adoption. 
E)  in highly developed regions. 
A)  in poorer countries. 
B)  in countries with high population growth rates. 
C)  in countries where there has been a convergence in incomes. 
D)  in countries where there is a convergence in technology adoption. 
E)  in highly developed regions.

Question 7

In the endogenous growth model,government policy can affect

Accepted Answer

A)  the budgetary deficit. 
B)  the growth rate of aggregate output and consumption. 
C)  exports. 
D)  interest rates. 
E)  leisure. 
A)  the budgetary deficit. 
B)  the growth rate of aggregate output and consumption. 
C)  exports. 
D)  interest rates. 
E)  leisure.

Question 8

The endogenous growth model appears consistent with the fact that there are

Accepted Answer

A)  persistent differences in income per worker between the poorer countries and the richer countries. 
B)  persistent differences in consumption per worker between the poorer countries and the richer countries. 
C)  persistent differences in government spending between the poorer countries and the richer countries. 
D)  persistent differences in infrastructure between the poorer countries and the richer countries. 
E)  persistent differences in education per worker between the poorer countries and the richer countries. 
A)  persistent differences in income per worker between the poorer countries and the richer countries. 
B)  persistent differences in consumption per worker between the poorer countries and the richer countries. 
C)  persistent differences in government spending between the poorer countries and the richer countries. 
D)  persistent differences in infrastructure between the poorer countries and the richer countries. 
E)  persistent differences in education per worker between the poorer countries and the richer countries.

Question 9

Suppose that two countries share identical levels of total factor productivity,identical labour force growth rates and identical savings rates.According to the Solow model,

Accepted Answer

A)  the country with the greater initial level of output per worker will grow more rapidly than the country with the smaller initial level of output per worker. 
B)  the country with the smaller initial level of output per worker will grow more rapidly than the country with the greater initial level of output per worker. 
C)  both countries will have the same growth rates of output per worker, even if they start out with different levels of output per worker. 
D)  if both countries start out with different levels of income per worker, both countries may have different growth rates of output per worker, but we cannot be certain which country will have the higher growth rate of output per worker. 
E)  the country with the smaller initial income per worker will grow more rapidly than the country with the greater initial level of income per worker. 
A)  the country with the greater initial level of output per worker will grow more rapidly than the country with the smaller initial level of output per worker. 
B)  the country with the smaller initial level of output per worker will grow more rapidly than the country with the greater initial level of output per worker. 
C)  both countries will have the same growth rates of output per worker, even if they start out with different levels of output per worker. 
D)  if both countries start out with different levels of income per worker, both countries may have different growth rates of output per worker, but we cannot be certain which country will have the higher growth rate of output per worker. 
E)  the country with the smaller initial income per worker will grow more rapidly than the country with the greater initial level of income per worker.

Question 10

In contrast to the Solow growth model,the endogenous growth model

Accepted Answer

A)  does not take standards of living into account. 
B)  does not take savings into account. 
C)  predicts persistent differences in per capita income. 
D)  predicts convergence in per capita incomes over time. 
E)  does not explain reality. 
A)  does not take standards of living into account. 
B)  does not take savings into account. 
C)  predicts persistent differences in per capita income. 
D)  predicts convergence in per capita incomes over time. 
E)  does not explain reality.

Question 11

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

Accepted Answer

A)  contagion. 
B)  externality. 
C)  transference. 
D)  convergence. 
E)  equilibrium. 
A)  contagion. 
B)  externality. 
C)  transference. 
D)  convergence. 
E)  equilibrium.

Question 12

Government ownership of production

Accepted Answer

A)  encourages competition. 
B)  should never happen. 
C)  increases total factor productivity. 
D)  leads to protection of employment at the expense of efficiency. 
E)  is negatively correlated with economic growth. 
A)  encourages competition. 
B)  should never happen. 
C)  increases total factor productivity. 
D)  leads to protection of employment at the expense of efficiency. 
E)  is negatively correlated with economic growth.

Question 13

A key characteristic of the production function in the endogenous growth model presented in the text is that

Accepted Answer

A)  there are increasing returns to scale in human capital. 
B)  there are decreasing returns to scale in human capital. 
C)  there are constant returns to scale in human capital. 
D)  at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital. 
E)  there are substantial diminishing marginal returns to human capital. 
A)  there are increasing returns to scale in human capital. 
B)  there are decreasing returns to scale in human capital. 
C)  there are constant returns to scale in human capital. 
D)  at low levels of human capital, there are increasing returns to scale in human capital, while at high levels of human capital, there are decreasing returns to scale in human capital. 
E)  there are substantial diminishing marginal returns to human capital.

Question 14

The importance of barriers to the adoption of technologies is supported by research by

Accepted Answer

A)  P. Romer. 
B)  R. Lucas. 
C)  S. Parente and E. Prescott. 
D)  G. Glomm and B. Ravikumar. 
E)  Friedman and Lucas. 
A)  P. Romer. 
B)  R. Lucas. 
C)  S. Parente and E. Prescott. 
D)  G. Glomm and B. Ravikumar. 
E)  Friedman and Lucas.

Question 15

Which of the following is a drawback of using real GDP to measure of aggregate economic welfare?

Accepted Answer

A)  It does not accurately measure aggregate output. 
B)  It does not account for leisure. 
C)  Incomes are underestimated. 
D)  Incomes are overestimated. 
E)  It flucates over time. 
A)  It does not accurately measure aggregate output. 
B)  It does not account for leisure. 
C)  Incomes are underestimated. 
D)  Incomes are overestimated. 
E)  It flucates over time.

Question 16

Which of the following is a way to obtain endogenous growth:

Accepted Answer

A)  inflation 
B)  physical capital accumulation 
C)  population growth 
D)  human capital accumulation 
E)  reduce barriers to technology adoption 
A)  inflation 
B)  physical capital accumulation 
C)  population growth 
D)  human capital accumulation 
E)  reduce barriers to technology adoption

Question 17

Countries do not have access to the same technology when

Accepted Answer

A)  government introduces laws to make it easy for labour unions to organize. 
B)  population growth rates increase. 
C)  governments enter into free trade agreements. 
D)  total factor productivity does not converge. 
E)  labour supply declines. 
A)  government introduces laws to make it easy for labour unions to organize. 
B)  population growth rates increase. 
C)  governments enter into free trade agreements. 
D)  total factor productivity does not converge. 
E)  labour supply declines.

Question 18

In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital),b represents the efficiency of human capital accumulation,H represents the amount of human capital,and z represents the marginal product of efficiency units of labour.Consumption equals

Accepted Answer

A)  buH. 
B)  zuH. 
C)  buz. 
D)  buzH. 
E)  ebuH2. 
A)  buH. 
B)  zuH. 
C)  buz. 
D)  buzH. 
E)  ebuH2.

Question 19

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

Accepted Answer

A)  Both physical capital accumulation and human capital accumulation are characterized by decreasing marginal returns. 
B)  Physical capital accumulation is subject to decreasing marginal returns, but human capital accumulation is not. 
C)  Human capital accumulation is subject to decreasing marginal returns, but physical capital accumulation is not. 
D)  Neither physical capital accumulation nor human capital accumulation is characterized by decreasing marginal returns. 
E)  Both physical capital accumulation and human capital accumulation are characterized by increasing marginal returns. 
A)  Both physical capital accumulation and human capital accumulation are characterized by decreasing marginal returns. 
B)  Physical capital accumulation is subject to decreasing marginal returns, but human capital accumulation is not. 
C)  Human capital accumulation is subject to decreasing marginal returns, but physical capital accumulation is not. 
D)  Neither physical capital accumulation nor human capital accumulation is characterized by decreasing marginal returns. 
E)  Both physical capital accumulation and human capital accumulation are characterized by increasing marginal returns.

Question 20

In the endogenous growth model,

Accepted Answer

A)  the growth rate of human capital is greater than the growth rate of output. 
B)  the growth rate of human capital is equal to the growth rate of output. 
C)  the growth rate of capital is less than the growth rate of output. 
D)  the growth rate of output is greater than to the growth rate of human capital. 
E)  the growth rate of output is equal to the growth rate of human capital. 
A)  the growth rate of human capital is greater than the growth rate of output. 
B)  the growth rate of human capital is equal to the growth rate of output. 
C)  the growth rate of capital is less than the growth rate of output. 
D)  the growth rate of output is greater than to the growth rate of human capital. 
E)  the growth rate of output is equal to the growth rate of human capital.

The production function exhibits

What causes barriers to technology adoption?

In the endogenous growth models of Lucas and Romer,an increase in a worker's level of human capital

In the Solow growth model,countries with identical total factor productivities,identical labour force growth rates,and identical savings rates

Nonrivalry means

There are greater opportunities for taking advantage of human capital externalities

In the endogenous growth model,government policy can affect

The endogenous growth model appears consistent with the fact that there are

Suppose that two countries share identical levels of total factor productivity,identical labour force growth rates and identical savings rates.According to the Solow model,

In contrast to the Solow growth model,the endogenous growth model

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

Government ownership of production

A key characteristic of the production function in the endogenous growth model presented in the text is that

The importance of barriers to the adoption of technologies is supported by research by

Which of the following is a drawback of using real GDP to measure of aggregate economic welfare?

Which of the following is a way to obtain endogenous growth:

Countries do not have access to the same technology when

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

In the endogenous growth model,

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 8: Income Disparity Among Countries and Endogenous Growth

The production function exhibits

What causes barriers to technology adoption?

In the endogenous growth models of Lucas and Romer,an increase in a worker's level of human capital

In the Solow growth model,countries with identical total factor productivities,identical labour force growth rates,and identical savings rates

Nonrivalry means

There are greater opportunities for taking advantage of human capital externalities

In the endogenous growth model,government policy can affect

The endogenous growth model appears consistent with the fact that there are

Suppose that two countries share identical levels of total factor productivity,identical labour force growth rates and identical savings rates.According to the Solow model,

In contrast to the Solow growth model,the endogenous growth model

The idea that contact with others with high levels of human capital increases ones' own human capital is called human capital

Government ownership of production

A key characteristic of the production function in the endogenous growth model presented in the text is that

The importance of barriers to the adoption of technologies is supported by research by

Which of the following is a drawback of using real GDP to measure of aggregate economic welfare?

Which of the following is a way to obtain endogenous growth:

Countries do not have access to the same technology when

Which of the following statements best describes the characteristics of accumulating physical capital and human capital?

In the endogenous growth model,

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters