Question 1

Which of the following is a normative statement about economic growth?

Accepted Answer

A) Economic growth is associated with higher labor productivity growth. 
B) Economic growth increases GDP per capita. 
C) Economic growth hurts developing countries. 
D) Foreign direct investment stimulates economic growth. 
A) Economic growth is associated with higher labor productivity growth. 
B) Economic growth increases GDP per capita. 
C) Economic growth hurts developing countries. 
D) Foreign direct investment stimulates economic growth.

Question 2

Given the fact that the productivity slowdown of the mid-1970s to the mid-1990s affected all industrial countries,which of the following explanations for the productivity slowdown in the United States is not likely to be correct?

Accepted Answer

A) A deterioration of the U.S.education system caused a decline in the quality of labor. 
B) high oil prices 
C) Services have become a larger fraction of GDP. 
D) stricter environmental regulations 
A) A deterioration of the U.S.education system caused a decline in the quality of labor. 
B) high oil prices 
C) Services have become a larger fraction of GDP. 
D) stricter environmental regulations

Question 3

Figure 11-1  
-Refer to Figure 11-1.Suppose the per-worker production function in the figure above represents the production function for the U.S.economy.If the United States decided to double its support of university research,this would cause a movement from

Accepted Answer

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

Question 4

An economy can improve its standard of living by

Accepted Answer

A) organizing production so that the quantity of goods produced per hour will decrease. 
B) reducing the amount of human capital workers have. 
C) increasing the amount of capital available per hour worked. 
D) all of the above 
A) organizing production so that the quantity of goods produced per hour will decrease. 
B) reducing the amount of human capital workers have. 
C) increasing the amount of capital available per hour worked. 
D) all of the above

Question 5

According to new growth theory,the accumulation of ________ capital is subject to diminishing returns at the ________ level,but not at the level of the economy as a whole.

Accepted Answer

A) physical; firm 
B) technological; personal 
C) knowledge; firm 
D) physical; production 
A) physical; firm 
B) technological; personal 
C) knowledge; firm 
D) physical; production

Question 6

Figure 11-1  
-Refer to Figure 11-1.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 B. 
B) B to C. 
C) B to A. 
D) C to A. 
A) A to B. 
B) B to C. 
C) B to A. 
D) C to A.

Question 7

Between 1990 and 2012,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

Accepted Answer

A) the United States 
B) Germany 
C) Japan 
D) Canada 
A) the United States 
B) Germany 
C) Japan 
D) Canada

Question 8

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Accepted Answer

A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population. 
A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population.

Question 9

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009.This means that

Accepted Answer

A) people or firms in other countries reduced their purchases of stocks and bonds in the United States by 42 percent in the first quarter of 2009. 
B) people or firms in the United States reduced their purchases of stocks and bonds in foreign countries by 42 percent in the first quarter of 2009. 
C) people or firms in other countries reduced their building of facilities of purchases of facilities in the United States by 42 percent in the first quarter of 2009. 
D) people or firms in the United States reduced their building of facilities or purchases of facilities in foreign countries by 42 percent in the first quarter of 2009. 
A) people or firms in other countries reduced their purchases of stocks and bonds in the United States by 42 percent in the first quarter of 2009. 
B) people or firms in the United States reduced their purchases of stocks and bonds in foreign countries by 42 percent in the first quarter of 2009. 
C) people or firms in other countries reduced their building of facilities of purchases of facilities in the United States by 42 percent in the first quarter of 2009. 
D) people or firms in the United States reduced their building of facilities or purchases of facilities in foreign countries by 42 percent in the first quarter of 2009.

Question 10

Explain the meaning of the word "convergence" in the context of economic growth and standards of living.

Accepted Answer

Convergence is a term that describes a p

Question 11

Creative destruction means that

Accepted Answer

A) firms develop new products that replace old products in the economy,thereby encouraging economic growth. 
B) economic growth can only be sustained if capital depreciates rapidly. 
C) knowledge capital can be created through a system of government subsidies for education and research and development. 
D) research and development should only be financed if research and development is incremental (a result of making small changes to existing products). 
A) firms develop new products that replace old products in the economy,thereby encouraging economic growth. 
B) economic growth can only be sustained if capital depreciates rapidly. 
C) knowledge capital can be created through a system of government subsidies for education and research and development. 
D) research and development should only be financed if research and development is incremental (a result of making small changes to existing products).

Question 12

Which of the following would you expect to result in faster economic growth?

Accepted Answer

A) the invention of new computers that increase labor productivity 
B) a decrease in the average level of education in the economy 
C) a decrease in the stock of capital per worker 
D) a decrease in research and development spending 
A) the invention of new computers that increase labor productivity 
B) a decrease in the average level of education in the economy 
C) a decrease in the stock of capital per worker 
D) a decrease in research and development spending

Question 13

Which of the following government provisions would help increase the accumulation of knowledge capital?

Accepted Answer

A) patents 
B) copyrights 
C) education subsidies 
D) All of the above are correct. 
A) patents 
B) copyrights 
C) education subsidies 
D) All of the above are correct.

Question 14

Some researchers have been unable to find evidence of increasing returns to human capital.

Accepted Answer

A) True 
 B)False

Question 15

The Industrial Revolution began in

Accepted Answer

A) England around 1750. 
B) the United States around 1820. 
C) France around 1680. 
D) Germany around 1780. 
A) England around 1750. 
B) the United States around 1820. 
C) France around 1680. 
D) Germany around 1780.

Question 16

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

Accepted Answer

A) There are fewer government regulations in the United States regarding the way firms can hire and fire workers. 
B) The financial systems of foreign countries are generally more efficient than those in the United States. 
C) European countries have more flexible policies regarding the number of hours employees are permitted to work. 
D) Job mobility in the United States is more restricted than it is in many foreign countries. 
A) There are fewer government regulations in the United States regarding the way firms can hire and fire workers. 
B) The financial systems of foreign countries are generally more efficient than those in the United States. 
C) European countries have more flexible policies regarding the number of hours employees are permitted to work. 
D) Job mobility in the United States is more restricted than it is in many foreign countries.

Question 17

According to the World Bank,Albania does one of the worst jobs as a country enforcing the rule of law.The consequence of a weak rule of law is

Accepted Answer

A) difficulty in attracting investment and low economic growth. 
B) a decrease in cash transactions and increased efficiency. 
C) more risk taking on the part of entrepreneurs and greater economic investment. 
D) strong property rights enforcement leading to greater investment. 
A) difficulty in attracting investment and low economic growth. 
B) a decrease in cash transactions and increased efficiency. 
C) more risk taking on the part of entrepreneurs and greater economic investment. 
D) strong property rights enforcement leading to greater investment.

Question 18

Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that

Accepted Answer

A) increased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker. 
B) decreased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker. 
C) increased production costs,causing firms to reorganize production to conserve energy,which increased output per worker. 
D) decreased production costs,causing firms to increase production,which reduced output per worker. 
A) increased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker. 
B) decreased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker. 
C) increased production costs,causing firms to reorganize production to conserve energy,which increased output per worker. 
D) decreased production costs,causing firms to increase production,which reduced output per worker.

Question 19

The question of whether economic growth is desirable is a positive question,easily settled by economic analysis.

Accepted Answer

A) True 
 B)False

Question 20

According to new growth theory,

Accepted Answer

A) physical capital is nonexcludable. 
B) knowledge capital is excludable. 
C) knowledge capital is subject to increasing returns. 
D) knowledge capital is rival and excludable. 
A) physical capital is nonexcludable. 
B) knowledge capital is excludable. 
C) knowledge capital is subject to increasing returns. 
D) knowledge capital is rival and excludable.

Which of the following is a normative statement about economic growth?

Given the fact that the productivity slowdown of the mid-1970s to the mid-1990s affected all industrial countries,which of the following explanations for the productivity slowdown in the United States is not likely to be correct?

Figure 11-1 -Refer to Figure 11-1.Suppose the per-worker production function in the figure above represents the production function for the U.S.economy.If the United States decided to double its support of university research,this would cause a movement from

An economy can improve its standard of living by

According to new growth theory,the accumulation of capital is subject to diminishing returns at the level,but not at the level of the economy as a whole.

Figure 11-1 -Refer to Figure 11-1.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

Between 1990 and 2012,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009.This means that

Explain the meaning of the word "convergence" in the context of economic growth and standards of living.

Creative destruction means that

Which of the following would you expect to result in faster economic growth?

Which of the following government provisions would help increase the accumulation of knowledge capital?

Some researchers have been unable to find evidence of increasing returns to human capital.

The Industrial Revolution began in

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

According to the World Bank,Albania does one of the worst jobs as a country enforcing the rule of law.The consequence of a weak rule of law is

Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that

The question of whether economic growth is desirable is a positive question,easily settled by economic analysis.

According to new growth theory,

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

Which of the following is a normative statement about economic growth?

Given the fact that the productivity slowdown of the mid-1970s to the mid-1990s affected all industrial countries,which of the following explanations for the productivity slowdown in the United States is not likely to be correct?

Figure 11-1 -Refer to Figure 11-1.Suppose the per-worker production function in the figure above represents the production function for the U.S.economy.If the United States decided to double its support of university research,this would cause a movement from

An economy can improve its standard of living by

According to new growth theory,the accumulation of ________ capital is subject to diminishing returns at the ________ level,but not at the level of the economy as a whole.

Figure 11-1 -Refer to Figure 11-1.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

Between 1990 and 2012,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009.This means that

Explain the meaning of the word "convergence" in the context of economic growth and standards of living.

Creative destruction means that

Which of the following would you expect to result in faster economic growth?

Which of the following government provisions would help increase the accumulation of knowledge capital?

Some researchers have been unable to find evidence of increasing returns to human capital.

The Industrial Revolution began in

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

According to the World Bank,Albania does one of the worst jobs as a country enforcing the rule of law.The consequence of a weak rule of law is

Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that

The question of whether economic growth is desirable is a positive question,easily settled by economic analysis.

According to new growth theory,

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

According to new growth theory,the accumulation of capital is subject to diminishing returns at the level,but not at the level of the economy as a whole.