Question 1

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs, we say there is

Accepted Answer

A)  human capital investment. 
B)  technological change. 
C)  an increase in labor productivity. 
D)  a movement along a given per-worker production function. 
A)  human capital investment. 
B)  technological change. 
C)  an increase in labor productivity. 
D)  a movement along a given per-worker production function.

Question 2

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 3

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Accepted Answer

A)  knowledge; increasing returns to scale; firm 
B)  physical; decreasing returns to scale; firm 
C)  knowledge; decreasing returns to scale; economy 
D)  knowledge; increasing returns to scale; economy 
A)  knowledge; increasing returns to scale; firm 
B)  physical; decreasing returns to scale; firm 
C)  knowledge; decreasing returns to scale; economy 
D)  knowledge; increasing returns to scale; economy

Question 4

Table 22-7
  
-Refer to Table 22-7. Consider the statistics in the table above in describing the following industrialized and developing countries. Are these consistent with the economic growth model? Briefly explain.

Accepted Answer

These statistics combine industrialized

Question 5

Of the following countries, which had the highest level of GDP per capita in 2012?

Accepted Answer

A)  Japan 
B)  France 
C)  Italy 
D)  the United States 
A)  Japan 
B)  France 
C)  Italy 
D)  the United States

Question 6

If the slope of the per-worker production function is 1/4 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

Accepted Answer

A)  Real GDP per hour worked will increase by $2,500. 
B)  Real GDP per hour worked will increase by $40,000. 
C)  Real GDP per hour worked will increase by $10,000. 
D)  Real GDP per hour worked will decrease by $40.000. 
A)  Real GDP per hour worked will increase by $2,500. 
B)  Real GDP per hour worked will increase by $40,000. 
C)  Real GDP per hour worked will increase by $10,000. 
D)  Real GDP per hour worked will decrease by $40.000.

Question 7

Table 22-3
  
-Using the points on the diagram below, identify which combinations of these points illustrate diminishing returns to capital. Give a brief explanation to support your answer.

Accepted Answer

The movement from A to B to C illustrate

Question 8

Of all industrialized nations, real GDP per capita was the highest in Japan in 2012.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A)  the purchase of a U.S. stock by a U.S. citizen 
B)  the purchase of a U.S. Treasury bond by a German citizen 
C)  the purchase of a U.S. mutual fund by a U.S. citizen 
D)  the purchase of a Japanese factory by a Korean citizen 
A)  the purchase of a U.S. stock by a U.S. citizen 
B)  the purchase of a U.S. Treasury bond by a German citizen 
C)  the purchase of a U.S. mutual fund by a U.S. citizen 
D)  the purchase of a Japanese factory by a Korean citizen

Question 10

You have been hired as an economic advisor for a developing country. You have been asked to focus on education as a means for the country's development. Explain to the prime minister how improving education and training can contribute to his country's economic growth, and why it is important for the government to take a pro-active role in promoting education.

Accepted Answer

Education raises the level of human capi

Question 11

Over the last three decades in the United States, services have become a smaller fraction of GDP relative to goods.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C. and 1300 A.D.?

Accepted Answer

A)  Standards of living in 1300 A.D. were substantially better than what they were in 1,000,000 B.C. 
B)  Standards of living substantially declined from 1,000,000 B.C. to 1300 A.D. 
C)  Significant economic growth took place between 1,000,000 B.C. and 1300 A.D. 
D)  No sustained economic growth occurred between 1,000,000 B.C. and 1300 A.D. 
A)  Standards of living in 1300 A.D. were substantially better than what they were in 1,000,000 B.C. 
B)  Standards of living substantially declined from 1,000,000 B.C. to 1300 A.D. 
C)  Significant economic growth took place between 1,000,000 B.C. and 1300 A.D. 
D)  No sustained economic growth occurred between 1,000,000 B.C. and 1300 A.D.

Question 13

There has been catch-up among ________, but there has not been catch-up among ________.

Accepted Answer

A)  developing countries such as Niger; industrialized countries such as Japan 
B)  industrialized countries such as Japan; all countries of the world 
C)  developing countries such as Niger; all countries of the world 
D)  all countries of the world together; industrialized countries such as Japan 
A)  developing countries such as Niger; industrialized countries such as Japan 
B)  industrialized countries such as Japan; all countries of the world 
C)  developing countries such as Niger; all countries of the world 
D)  all countries of the world together; industrialized countries such as Japan

Question 14

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300. Based on this information, what is the slope of the per-worker production function in this range?

Accepted Answer

A)  0.03 
B)  3.3 
C)  33.3 
D)  333 
A)  0.03 
B)  3.3 
C)  33.3 
D)  333

Question 15

If the per-worker production function shifts down,

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 steeper. 
D)  positive 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 steeper. 
D)  positive technological change has occurred in the economy.

Question 16

Compared to the previous 20 years, productivity growth in the United States increased between 1996 and 2012.

Accepted Answer

A) True 
 B)False

Question 17

The period of time from 1,000,000 B.C. to 1300 A.D. was a period of

Accepted Answer

A)  no sustained economic growth. 
B)  slow and steady economic growth. 
C)  moderate economic growth. 
D)  rapid and sustained economic growth. 
A)  no sustained economic growth. 
B)  slow and steady economic growth. 
C)  moderate economic growth. 
D)  rapid and sustained economic growth.

Question 18

If real GDP per capita in Ireland is estimated to be $7,400 in 2014, what will real GDP per capita be in 2019 if real GDP per capita grows at an annual rate of 2.8%?

Accepted Answer

A)  $7,607 
B)  $8,496 
C)  $9,472 
D)  $20,720 
A)  $7,607 
B)  $8,496 
C)  $9,472 
D)  $20,720

Question 19

The rate of growth of productivity in the United States was positive during the 20th century.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following policies would not help promote economic growth?

Accepted Answer

A)  a law requiring that the funds in an individual retirement account be taxed 
B)  a law restricting elected officials from accepting expensive gifts and trips from private individuals 
C)  a law that funds prenatal care for all expectant mothers 
D)  a law that subsidizes research in nanotechnology 
A)  a law requiring that the funds in an individual retirement account be taxed 
B)  a law restricting elected officials from accepting expensive gifts and trips from private individuals 
C)  a law that funds prenatal care for all expectant mothers 
D)  a law that subsidizes research in nanotechnology

Exam 22: Long-Run Economic Growth: Sources and Policies

If there is a change in the ability of a firm to produce a given level of output with a given level of inputs, we say there is

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

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Table 22-7 -Refer to Table 22-7. Consider the statistics in the table above in describing the following industrialized and developing countries. Are these consistent with the economic growth model? Briefly explain.

Of the following countries, which had the highest level of GDP per capita in 2012?

If the slope of the per-worker production function is 1/4 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

Table 22-3 -Using the points on the diagram below, identify which combinations of these points illustrate diminishing returns to capital. Give a brief explanation to support your answer.

Of all industrialized nations, real GDP per capita was the highest in Japan in 2012.

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

Over the last three decades in the United States, services have become a smaller fraction of GDP relative to goods.

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C. and 1300 A.D.?

There has been catch-up among ________, but there has not been catch-up among ________.

In a small European country, it is estimated that a $10,000 increase in capital per hour worked will increase real GDP per hour worked by $300. Based on this information, what is the slope of the per-worker production function in this range?

If the per-worker production function shifts down,

Compared to the previous 20 years, productivity growth in the United States increased between 1996 and 2012.

The period of time from 1,000,000 B.C. to 1300 A.D. was a period of

If real GDP per capita in Ireland is estimated to be $7,400 in 2014, what will real GDP per capita be in 2019 if real GDP per capita grows at an annual rate of 2.8%?

The rate of growth of productivity in the United States was positive during the 20th century.

Which of the following policies would not help promote economic growth?

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

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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

New growth theory states that increases in capital will result in at the level.

There has been catch-up among , but there has not been catch-up among .