Question 1

Robert Lucas,a Nobel laureate in economics,argues that there are increasing returns to

Accepted Answer

A) knowledge capital. 
B) physical capital. 
C) financial capital. 
D) human capital. 
A) knowledge capital. 
B) physical capital. 
C) financial capital. 
D) human capital.

Question 2

During which of the following periods was growth in GDP per capita the strongest?

Accepted Answer

A) prior to 500 A.D. 
B) 500 A.D.to 1800 A.D. 
C) 1800-1900 A.D. 
D) 1900-2000 A.D. 
A) prior to 500 A.D. 
B) 500 A.D.to 1800 A.D. 
C) 1800-1900 A.D. 
D) 1900-2000 A.D.

Question 3

The term "brain drain" refers to

Accepted Answer

A) highly educated individuals who leave developing countries for high-income countries. 
B) the diminishing returns to studying for an exam. 
C) the negative impact on brain function of an individual's overinvestment in human capital. 
D) the decreased quality of the college-educated workforce. 
A) highly educated individuals who leave developing countries for high-income countries. 
B) the diminishing returns to studying for an exam. 
C) the negative impact on brain function of an individual's overinvestment in human capital. 
D) the decreased quality of the college-educated workforce.

Question 4

To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries?

Accepted Answer

A) the flexibility of U.S.labor markets and the efficiency of the U.S.financial system 
B) the strict government rules in the United States that regulate a firm's ability to hire and fire workers 
C) the low rate of job mobility in the United States 
D) the high level of unemployment benefits the United States pays relative to other countries like Canada 
A) the flexibility of U.S.labor markets and the efficiency of the U.S.financial system 
B) the strict government rules in the United States that regulate a firm's ability to hire and fire workers 
C) the low rate of job mobility in the United States 
D) the high level of unemployment benefits the United States pays relative to other countries like Canada

Question 5

Figure 11-4  
-Refer to Figure 11-4.Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?

Accepted Answer

A) E to B 
B) B to D 
C) B to E 
D) A to B to C 
A) E to B 
B) B to D 
C) B to E 
D) A to B to C

Question 6

Figure 11-4  
-Refer to Figure 11-4.Within a country,the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from

Accepted Answer

A) A to C. 
B) B to C. 
C) B to A. 
D) E to B. 
A) A to C. 
B) B to C. 
C) B to A. 
D) E to B.

Question 7

The Soviet Union consistently increased the amount of capital available to its workers,but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker.This phenomenon is referred to as

Accepted Answer

A) a rising standard of living. 
B) diminishing returns to capital. 
C) new growth theory. 
D) a shift of the per-worker production function. 
A) a rising standard of living. 
B) diminishing returns to capital. 
C) new growth theory. 
D) a shift of the per-worker production function.

Question 8

An economic growth model

Accepted Answer

A) explains changes in nominal GDP per capita in the long run. 
B) explains changes in real GDP per capita in the long run. 
C) explains changes in nominal GDP per capita in the short run. 
D) explains changes in real GDP per capita in the short run. 
A) explains changes in nominal GDP per capita in the long run. 
B) explains changes in real GDP per capita in the long run. 
C) explains changes in nominal GDP per capita in the short run. 
D) explains changes in real GDP per capita in the short run.

Question 9

Robert Lucas argues that there are ________ returns to human capital,and these productivity increases are not completely captured by individuals as they decide how much education to purchase.As a result,the market produces ________ education and training.

Accepted Answer

A) increasing; too much 
B) decreasing; too much 
C) increasing; too little 
D) decreasing; too little 
A) increasing; too much 
B) decreasing; too much 
C) increasing; too little 
D) decreasing; too little

Question 10

Until recently,many developing countries

Accepted Answer

A) were quite open to foreign investment. 
B) encouraged foreign direct investment but discouraged foreign portfolio investment. 
C) sealed themselves off from foreign investment. 
D) encouraged foreign portfolio investment but discouraged foreign direct investment. 
A) were quite open to foreign investment. 
B) encouraged foreign direct investment but discouraged foreign portfolio investment. 
C) sealed themselves off from foreign investment. 
D) encouraged foreign portfolio investment but discouraged foreign direct investment.

Question 11

The Soviet Union's economic growth rate slowed despite rapid increases in capital per hour worked.

Accepted Answer

A) True 
 B)False

Question 12

Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

Accepted Answer

A) overpopulation. 
B) low saving and investment. 
C) a low import/export ratio. 
D) low government spending. 
A) overpopulation. 
B) low saving and investment. 
C) a low import/export ratio. 
D) low government spending.

Question 13

According to the World Bank,GDP per capita ________ in the least corrupt countries than in the most corrupt countries.

Accepted Answer

A) is more than 50 percent less 
B) is roughly the same 
C) is twice as high 
D) is more than 10 times higher 
A) is more than 50 percent less 
B) is roughly the same 
C) is twice as high 
D) is more than 10 times higher

Question 14

Technological change is the key to sustaining economic growth.

Accepted Answer

A) True 
 B)False

Question 15

Describe the process of "creative destruction" using a specific example.

Accepted Answer

Creative destruction,based on the ideas

Question 16

Policies to promote growth by increasing saving and investment work through

Accepted Answer

A) decreasing the supply of loanable funds,lowering the interest rate,raising the level of investment in physical capital. 
B) increasing the supply of loanable funds,increasing the interest rate,raising the level of investment in physical capital. 
C) increasing the supply of loanable funds,lowering the interest rate,lowering the level of investment in physical capital. 
D) increasing the supply of loanable funds,lowering the interest rate,raising the level of investment in physical capital. 
A) decreasing the supply of loanable funds,lowering the interest rate,raising the level of investment in physical capital. 
B) increasing the supply of loanable funds,increasing the interest rate,raising the level of investment in physical capital. 
C) increasing the supply of loanable funds,lowering the interest rate,lowering the level of investment in physical capital. 
D) increasing the supply of loanable funds,lowering the interest rate,raising the level of investment in physical capital.

Question 17

Technological change will

Accepted Answer

A) shift the per-worker production function up. 
B) shift the per-worker production function down. 
C) move the economy to a point beneath the per-worker production function. 
D) move the economy along a given per-worker production function. 
A) shift the per-worker production function up. 
B) shift the per-worker production function down. 
C) move the economy to a point beneath the per-worker production function. 
D) move the economy along a given per-worker production function.

Question 18

Table 11-2
  
-Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

Accepted Answer

GDP per capita = GDP / Population. GDP p

Question 19

Enforcing property rights in an economy will

Accepted Answer

A) cause the market system to work less efficiently. 
B) decrease the level of foreign portfolio investment. 
C) encourage corruption and expand the underground economy. 
D) raise the level of investment. 
A) cause the market system to work less efficiently. 
B) decrease the level of foreign portfolio investment. 
C) encourage corruption and expand the underground economy. 
D) raise the level of investment.

Question 20

Figure 11-3  
-Refer to Figure 11-3.Technological change is shown in the figure above by the movement from

Accepted Answer

A) B to C. 
B) B to D. 
C) B to E. 
D) B to A. 
A) B to C. 
B) B to D. 
C) B to E. 
D) B to A.

Robert Lucas,a Nobel laureate in economics,argues that there are increasing returns to

During which of the following periods was growth in GDP per capita the strongest?

The term "brain drain" refers to

To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries?

Figure 11-4 -Refer to Figure 11-4.Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?

Figure 11-4 -Refer to Figure 11-4.Within a country,the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from

The Soviet Union consistently increased the amount of capital available to its workers,but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker.This phenomenon is referred to as

An economic growth model

Robert Lucas argues that there are returns to human capital,and these productivity increases are not completely captured by individuals as they decide how much education to purchase.As a result,the market produces education and training.

Until recently,many developing countries

The Soviet Union's economic growth rate slowed despite rapid increases in capital per hour worked.

Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

According to the World Bank,GDP per capita ________ in the least corrupt countries than in the most corrupt countries.

Technological change is the key to sustaining economic growth.

Describe the process of "creative destruction" using a specific example.

Policies to promote growth by increasing saving and investment work through

Technological change will

Table 11-2 -Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

Enforcing property rights in an economy will

Figure 11-3 -Refer to Figure 11-3.Technological change is shown in the figure above by the movement from

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 11: Long-Run Economic Growth: Sources and Policies

Robert Lucas,a Nobel laureate in economics,argues that there are increasing returns to

During which of the following periods was growth in GDP per capita the strongest?

The term "brain drain" refers to

To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries?

Figure 11-4 -Refer to Figure 11-4.Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?

Figure 11-4 -Refer to Figure 11-4.Within a country,the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from

The Soviet Union consistently increased the amount of capital available to its workers,but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker.This phenomenon is referred to as

An economic growth model

Robert Lucas argues that there are ________ returns to human capital,and these productivity increases are not completely captured by individuals as they decide how much education to purchase.As a result,the market produces ________ education and training.

Until recently,many developing countries

The Soviet Union's economic growth rate slowed despite rapid increases in capital per hour worked.

Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

According to the World Bank,GDP per capita ________ in the least corrupt countries than in the most corrupt countries.

Technological change is the key to sustaining economic growth.

Describe the process of "creative destruction" using a specific example.

Policies to promote growth by increasing saving and investment work through

Technological change will

Table 11-2 -Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

Enforcing property rights in an economy will

Figure 11-3 -Refer to Figure 11-3.Technological change is shown in the figure above by the movement from

Economics: Foundations and Models

Trade-Offs,comparative Advantage,and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Robert Lucas argues that there are returns to human capital,and these productivity increases are not completely captured by individuals as they decide how much education to purchase.As a result,the market produces education and training.