Question 1

What's the difference between foreign direct investment and foreign portfolio investment?

Accepted Answer

A)  Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. 
B)  Individuals engage in foreign portfolio investment, but only firms can engage in foreign direct investment. 
C)  Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals, or the government purchase foreign investments. 
D)  Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access. 
A)  Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms, while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. 
B)  Individuals engage in foreign portfolio investment, but only firms can engage in foreign direct investment. 
C)  Foreign direct investment only takes place when governments make official purchases or foreign investments, while foreign portfolio investment takes place when firms, individuals, or the government purchase foreign investments. 
D)  Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have, but foreign portfolio investment does not expand that access.

Question 2

In 2012, GDP per capita was ________ in the United States than in China, and since 1980, the growth rate of real GDP per capita has been ________ in the United States than in China.

Accepted Answer

A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower 
A)  higher; higher 
B)  higher; lower 
C)  lower; higher 
D)  lower; lower

Question 3

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 4

Firms free ride on the research and development of other firms when they

Accepted Answer

A)  buy a firm's newly developed product, and then give it away to consumers. 
B)  use knowledge other firms have developed without paying for that knowledge. 
C)  license a new technology from a firm that developed the new technology. 
D)  choose a level of research and development that is inefficiently high. 
A)  buy a firm's newly developed product, and then give it away to consumers. 
B)  use knowledge other firms have developed without paying for that knowledge. 
C)  license a new technology from a firm that developed the new technology. 
D)  choose a level of research and development that is inefficiently high.

Question 5

Article Summary
Unlike in many nations, when the financial crisis hit in 2008 the Polish economy continued to grow, but due to a current slowdown in exports and domestic demand, Poland is expecting a large outflow of workers. Unemployment was expected to grow to 14 percent in Poland in 2013, and according to Krystyna Iglicka, a demographer at Lazarski University in Warsaw, "…Poles have always treated emigration as a way of improving their lot." Despite earning relatively low salaries in Western European countries, on average just over €2,000 (about $2,660) a month according to the National Bank of Poland, this is still four times more than workers would earn on average by staying in Poland. Iglicka predicts that between 500,000 and 800,000 Poles will emigrate from Poland over the next five years.
Source: Jan Cienski, "Poland braces for fresh exodus of workers," Washington Post, January 22, 2013.
-Refer to the Article Summary. If an outflow of workers leaves Poland with a smaller but more productive workforce and the capital per hour worked does not change, there will be ________ the per-worker production function in Poland.

Accepted Answer

A)  a movement up 
B)  a movement down 
C)  an upward shift of 
D)  a downward shift of 
A)  a movement up 
B)  a movement down 
C)  an upward shift of 
D)  a downward shift of

Question 6

Figure 22-2  
-Refer to Figure 22-2. 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 7

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

Accepted Answer

Three explanations have been suggested f

Question 8

The industrialized group of countries has growth rates that are consistent with the findings of the economic growth model. That is, Taiwan, Korea, and Singapore had ________ incomes in 1960 than the United States and Switzerland, and Taiwan, Korea, and Singapore grew ________ than the United States and Switzerland between 1960 and 2010.

Accepted Answer

A)  lower; more rapidly 
B)  greater; less rapidly 
C)  lower; less rapidly 
D)  greater; more rapidly 
A)  lower; more rapidly 
B)  greater; less rapidly 
C)  lower; less rapidly 
D)  greater; more rapidly

Question 9

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 10

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

Accepted Answer

Creative destruction, based on the ideas

Question 11

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 12

Unemployment insurance is usually available to workers in ________ for a shorter period of time than it is in ________.

Accepted Answer

A)  the United States; Canada 
B)  Canada and some Western European countries; the United States 
C)  Canada; some Western European countries 
D)  some Western European countries; the United States 
A)  the United States; Canada 
B)  Canada and some Western European countries; the United States 
C)  Canada; some Western European countries 
D)  some Western European countries; the United States

Question 13

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 14

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 15

A copyright grants the creator of a book, film, or piece of software exclusive legal rights to use the creation for how long?

Accepted Answer

A)  10 years 
B)  20 years 
C)  50 years 
D)  the creator's lifetime plus 70 years for the creator's heirs 
A)  10 years 
B)  20 years 
C)  50 years 
D)  the creator's lifetime plus 70 years for the creator's heirs

Question 16

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 17

Which of the following is not a reason why China is unlikely to maintain high enough rates of productivity growth to catch up with the standard of living in the United States?

Accepted Answer

A)  The United States invests more in research and development. than does China. 
B)  Much of China's growth is likely due to the transition from a centrally-planned economy to a market economy. 
C)  Because of the low birth rate in China, the labor force will soon decline. 
D)  The Chinese migration of rural workers to more productive urban jobs. 
A)  The United States invests more in research and development. than does China. 
B)  Much of China's growth is likely due to the transition from a centrally-planned economy to a market economy. 
C)  Because of the low birth rate in China, the labor force will soon decline. 
D)  The Chinese migration of rural workers to more productive urban jobs.

Question 18

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 19

Because of the productivity slowdown in the United States from the mid-1970s through the mid-1990s,

Accepted Answer

A)  real GDP per capita grew more rapidly. 
B)  real GDP per capita grew more slowly. 
C)  the standard of living did not change. 
D)  the standard of living increased in the United States. 
A)  real GDP per capita grew more rapidly. 
B)  real GDP per capita grew more slowly. 
C)  the standard of living did not change. 
D)  the standard of living increased in the United States.

Question 20

Describe the pattern of growth rates in real GDP per hour worked in the United States since the early nineteenth century. Has output per hour worked consistently increased at the same rate? Explain.

Accepted Answer

Growth in real GDP per hour worked avera

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

What's the difference between foreign direct investment and foreign portfolio investment?

In 2012, GDP per capita was ________ in the United States than in China, and since 1980, the growth rate of real GDP per capita has been ________ in the United States than in China.

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

Firms free ride on the research and development of other firms when they

Figure 22-2 -Refer to Figure 22-2. 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

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

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

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

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

Unemployment insurance is usually available to workers in ________ for a shorter period of time than it is in ________.

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

An economy can improve its standard of living by

A copyright grants the creator of a book, film, or piece of software exclusive legal rights to use the creation for how long?

Knowledge capital is

Which of the following is not a reason why China is unlikely to maintain high enough rates of productivity growth to catch up with the standard of living in the United States?

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

Because of the productivity slowdown in the United States from the mid-1970s through the mid-1990s,

Describe the pattern of growth rates in real GDP per hour worked in the United States since the early nineteenth century. Has output per hour worked consistently increased at the same rate? Explain.

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

In 2012, GDP per capita was in the United States than in China, and since 1980, the growth rate of real GDP per capita has been in the United States than in China.

Unemployment insurance is usually available to workers in for a shorter period of time than it is in .