Question 1

The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s was actually a global phenomenon.

Accepted Answer

A) True 
 B)False

Question 2

Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?

Accepted Answer

A) Low-income industrial countries are catching up to high-income industrial countries. 
B) Low-income developing countries are catching up to high-income industrial countries. 
C) Low-income industrial countries are catching up to high-income developing countries. 
D) All low-income countries are catching up to all high-income countries. 
A) Low-income industrial countries are catching up to high-income industrial countries. 
B) Low-income developing countries are catching up to high-income industrial countries. 
C) Low-income industrial countries are catching up to high-income developing countries. 
D) All low-income countries are catching up to all high-income countries.

Question 3

Because firms can free ride on the research and development of other firms,

Accepted Answer

A) firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B) firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C) firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D) firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research. 
A) firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B) firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C) firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D) firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research.

Question 4

Explain three reasons why the productivity slowdown of 1974-1995 occurred.

Accepted Answer

Three explanations have been suggested f

Question 5

Figure 11-2  
-Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2010 and 2014,we would expect to see

Accepted Answer

A) real GDP per hour worked will increase by the same increment each year between 2010 and 2014. 
B) real GDP per hour worked will be lower in 2014 than it was in 2010. 
C) the per-worker production function will get flatter over time. 
D) the per-worker production function will shift up every year there is increase in capital per hour worked. 
A) real GDP per hour worked will increase by the same increment each year between 2010 and 2014. 
B) real GDP per hour worked will be lower in 2014 than it was in 2010. 
C) the per-worker production function will get flatter over time. 
D) the per-worker production function will shift up every year there is increase in capital per hour worked.

Question 6

Knowledge capital is

Accepted Answer

A) rival. 
B) nonrival. 
C) nonexcludable. 
D) both B and C 
A) rival. 
B) nonrival. 
C) nonexcludable. 
D) both B and C

Question 7

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

Accepted Answer

A) diminishing returns. 
B) negative returns. 
C) accelerating returns. 
D) decreasing production. 
A) diminishing returns. 
B) negative returns. 
C) accelerating returns. 
D) decreasing production.

Question 8

In a small European country,it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $12 million,assuming no technological change and no change in the hours of work?

Accepted Answer

A) GDP would increase further,but by less than $1 million. 
B) GDP would increase further by exactly $1 million. 
C) GDP would increase further by more than $1 million 
D) GDP would increase further by exactly $4 million. 
A) GDP would increase further,but by less than $1 million. 
B) GDP would increase further by exactly $1 million. 
C) GDP would increase further by more than $1 million 
D) GDP would increase further by exactly $4 million.

Question 9

The owner of a firm wants some advice on how to increase productivity.Suggest three ways the entrepreneur could increase labor productivity through improving technology.

Accepted Answer

There are three main ways to improve tec

Question 10

Which of the following is an example of foreign direct investment?

Accepted Answer

A) You purchase a plane ticket to China on American Airlines. 
B) American Airlines builds a hub in China. 
C) You buy a plane that was made in China. 
D) A stock broker from China sells you a Chinese government savings bond. 
A) You purchase a plane ticket to China on American Airlines. 
B) American Airlines builds a hub in China. 
C) You buy a plane that was made in China. 
D) A stock broker from China sells you a Chinese government savings bond.

Question 11

Starting at point B in the diagram below,identify which combinations of points illustrate technological change.Give a brief explanation to support your answer.

Accepted Answer

The movement from B to D in the diagram

Question 12

How do economic growth rates affect a nation's standard of living?

Accepted Answer

The speed at which an economy grows dete

Question 13

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ the research and development of other firms.

Accepted Answer

A) make bids on 
B) not use 
C) ignore 
D) free ride on 
A) make bids on 
B) not use 
C) ignore 
D) free ride on

Question 14

If the per-worker production function shifts up,

Accepted Answer

A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes flatter. 
D) negative technological change has occurred in the economy. 
A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes flatter. 
D) negative technological change has occurred in the economy.

Question 15

Some economists argue that the apparent slowdown in economic growth in the United States during the mid-1970s may not really have reduced the standard of living because

Accepted Answer

A) spending on new government regulations such as the Clean Air Act increased output dramatically without increasing the standard of living of Americans. 
B) significant improvements in the quality of services occurred,although the quantity of these services did not increase much during this time. 
C) changes in well-being are accurately reflected in statistics measuring economic growth. 
D) higher production costs from higher oil prices raised production and transportation costs and reduced output. 
A) spending on new government regulations such as the Clean Air Act increased output dramatically without increasing the standard of living of Americans. 
B) significant improvements in the quality of services occurred,although the quantity of these services did not increase much during this time. 
C) changes in well-being are accurately reflected in statistics measuring economic growth. 
D) higher production costs from higher oil prices raised production and transportation costs and reduced output.

Question 16

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

Accepted Answer

A) Even when entrepreneurs cannot secure sufficient funding for projects from banks,venture capital firms may be willing to lend money. 
B) The level of legal protection for investors in the United States is relatively low. 
C) Because the financial market in the United States is so large,the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D) Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults. 
A) Even when entrepreneurs cannot secure sufficient funding for projects from banks,venture capital firms may be willing to lend money. 
B) The level of legal protection for investors in the United States is relatively low. 
C) Because the financial market in the United States is so large,the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D) Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults.

Question 17

The per-worker production function has a ________ slope,indicating that increases in capital per hour worked ________ real GDP.

Accepted Answer

A) negative; increase 
B) positive; increase 
C) negative; decrease 
D) positive; decrease 
A) negative; increase 
B) positive; increase 
C) negative; decrease 
D) positive; decrease

Question 18

According to Joseph Schumpeter,economic growth is achieved through

Accepted Answer

A) focusing only on making old products better rather than inventing new ones. 
B) centralizing economic production. 
C) a process termed "creative destruction." 
D) removing the entrepreneur from the production function. 
A) focusing only on making old products better rather than inventing new ones. 
B) centralizing economic production. 
C) a process termed "creative destruction." 
D) removing the entrepreneur from the production function.

Question 19

If real GDP per capita in the United States is $8,000 in 2013,and if real GDP per capita is $12,000 in 2023,what is the total percent change in the growth rate of GDP per capita between 2013 and 2023?

Accepted Answer

A) 3.33% 
B) 5% 
C) 33% 
D) 50% 
A) 3.33% 
B) 5% 
C) 33% 
D) 50%

Question 20

In the United States,the annual growth rate of real GDP per hour worked between 1996 and 2012 averaged

Accepted Answer

A) -0.3%. 
B) 1.9%. 
C) 6.9%. 
D) 10.2%. 
A) -0.3%. 
B) 1.9%. 
C) 6.9%. 
D) 10.2%.

The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s was actually a global phenomenon.

Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?

Because firms can free ride on the research and development of other firms,

Explain three reasons why the productivity slowdown of 1974-1995 occurred.

Figure 11-2 -Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2010 and 2014,we would expect to see

Knowledge capital is

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

The owner of a firm wants some advice on how to increase productivity.Suggest three ways the entrepreneur could increase labor productivity through improving technology.

Which of the following is an example of foreign direct investment?

Starting at point B in the diagram below,identify which combinations of points illustrate technological change.Give a brief explanation to support your answer.

How do economic growth rates affect a nation's standard of living?

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ the research and development of other firms.

If the per-worker production function shifts up,

Some economists argue that the apparent slowdown in economic growth in the United States during the mid-1970s may not really have reduced the standard of living because

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

The per-worker production function has a slope,indicating that increases in capital per hour worked real GDP.

According to Joseph Schumpeter,economic growth is achieved through

If real GDP per capita in the United States is $8,000 in 2013,and if real GDP per capita is $12,000 in 2023,what is the total percent change in the growth rate of GDP per capita between 2013 and 2023?

In the United States,the annual growth rate of real GDP per hour worked between 1996 and 2012 averaged

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

The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s was actually a global phenomenon.

Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?

Because firms can free ride on the research and development of other firms,

Explain three reasons why the productivity slowdown of 1974-1995 occurred.

Figure 11-2 -Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2010 and 2014,we would expect to see

Knowledge capital is

When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

The owner of a firm wants some advice on how to increase productivity.Suggest three ways the entrepreneur could increase labor productivity through improving technology.

Which of the following is an example of foreign direct investment?

Starting at point B in the diagram below,identify which combinations of points illustrate technological change.Give a brief explanation to support your answer.

How do economic growth rates affect a nation's standard of living?

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ the research and development of other firms.

If the per-worker production function shifts up,

Some economists argue that the apparent slowdown in economic growth in the United States during the mid-1970s may not really have reduced the standard of living because

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

The per-worker production function has a ________ slope,indicating that increases in capital per hour worked ________ real GDP.

According to Joseph Schumpeter,economic growth is achieved through

If real GDP per capita in the United States is $8,000 in 2013,and if real GDP per capita is $12,000 in 2023,what is the total percent change in the growth rate of GDP per capita between 2013 and 2023?

In the United States,the annual growth rate of real GDP per hour worked between 1996 and 2012 averaged

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

The per-worker production function has a slope,indicating that increases in capital per hour worked real GDP.