Question 1

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Accepted Answer

A)  There must be increases in the quality and quantity of consumption for long-term growth to be achieved. 
B)  Technological progress is necessary to achieve the steady-state level of consumption per worker. 
C)  There must be increases in the quality and quantity of capital for long-term growth to be achieved. 
D)  Technological progress allows for an increase in the saving rate. 
A)  There must be increases in the quality and quantity of consumption for long-term growth to be achieved. 
B)  Technological progress is necessary to achieve the steady-state level of consumption per worker. 
C)  There must be increases in the quality and quantity of capital for long-term growth to be achieved. 
D)  Technological progress allows for an increase in the saving rate.

Question 2

Which of the following is a coincident indicator?

Accepted Answer

A)  Average work week. 
B)  New building approvals. 
C)  Stock prices. 
D)  Household income. 
A)  Average work week. 
B)  New building approvals. 
C)  Stock prices. 
D)  Household income.

Question 3

Which of the following is an example of a government policy aimed at increasing the long-term living standards of Australians?

Accepted Answer

A)  Increases in government spending. 
B)  Decreases in taxes. 
C)  Decreases in interest rates. 
D)  Compulsory superannuation. 
A)  Increases in government spending. 
B)  Decreases in taxes. 
C)  Decreases in interest rates. 
D)  Compulsory superannuation.

Question 4

Narrbegin Exhibit 12.2
 \[\begin{array} { | c | c | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Capital stock } \
\text { per person }
\end{array} & \begin{array} { c } 
\text { Output per } \
\text { person }
\end{array} & \begin{array} { c } 
\text { Capital stock } \
\text { depreciation } \
\text { (at rate of 10 } \
\text { per cent) }
\end{array} & \begin{array} { c } 
\text { Gross in- } \
\text { vestment } \
\text { per person }
\end{array} & \begin{array} { c } 
\text { Required } \
\text { saving } \
\text { per per- } \
\text { son }
\end{array} & \begin{array} { c } 
\text { Required } \
\text { saving } \
\text { rate }
\end{array} & \begin{array} { c } 
\text { Consump- } \
\text { tion per } \
\text { person }
\end{array} \
\hline 100 \quad ( \langle 20 \% ) & 40 & 10 & 10 & 10 & 25 \% & 30 \
\hline 120 \quad ( \langle 20 \% ) & 46 ( < 15 \% ) & 12 & 12 & 12 & 26 \% &-?- \ 
\hline 144 \quad ( \langle 20 \% ) & \begin{array} { c } 
50.6 ( < \
10 \% )
\end{array} & 14 & 14 & 144 & 28.5 \% & 36.2 \
\hline 172.8 ( \langle 20 \% ) & 53.1 ( \langle 5 \% ) & 17.3 & 17.3 & 17.3 &  { } _ { - } { ?} _ { - } \% & 35.8 \
\hline
\end{array}\]
-According to Exhibit 12.2, the level of consumption per person when capital per person is 120 units will be:

Accepted Answer

A)  32. 
B)  34. 
C)  36. 
D)  38. 
A)  32. 
B)  34. 
C)  36. 
D)  38.

Question 5

Some scientists have suggested that technology may be subject to:

Accepted Answer

A)  diminishing marginal returns. 
B)  decreasing returns to scale. 
C)  increasing marginal returns. 
D)  negative externalities. 
A)  diminishing marginal returns. 
B)  decreasing returns to scale. 
C)  increasing marginal returns. 
D)  negative externalities.

Question 6

The GDP gap is the difference between:

Accepted Answer

A)  seasonal unemployment and actual real GDP. 
B)  the unemployment rate and real GDP deflator. 
C)  full-employment real GDP and actual real GDP. 
D)  full-employment real GDP and real GDP deflator. 
A)  seasonal unemployment and actual real GDP. 
B)  the unemployment rate and real GDP deflator. 
C)  full-employment real GDP and actual real GDP. 
D)  full-employment real GDP and real GDP deflator.

Question 7

If a country has no technological progress, the only way for it to have long-term increases in living standards is by:

Accepted Answer

A)  continually increasing capital per worker. 
B)  continually increasing the saving rate. 
C)  continually increasing investment in research and development. 
D)  the government continually running budget surpluses to increase national savings. 
A)  continually increasing capital per worker. 
B)  continually increasing the saving rate. 
C)  continually increasing investment in research and development. 
D)  the government continually running budget surpluses to increase national savings.

Question 8

The endogenous growth model suggests:

Accepted Answer

A)  that technology has significant positive externalities. 
B)  the private sector, on its own, may spend too little on research and development. 
C)  the government can play a role in stimulating research and development. 
D)  all of these factors. 
A)  that technology has significant positive externalities. 
B)  the private sector, on its own, may spend too little on research and development. 
C)  the government can play a role in stimulating research and development. 
D)  all of these factors.

Question 9

Which of the following is true?

Accepted Answer

A)  The GDP gap is the difference between nominal GDP and real GDP. 
B)  Economic growth is a difference between last year's CPI and this year's CPI. 
C)  Economic growth is measured by the annual increase in a nation's real GDP. 
D)  Discouraged workers are not fully accounted for in the unemployment rate. 
A)  The GDP gap is the difference between nominal GDP and real GDP. 
B)  Economic growth is a difference between last year's CPI and this year's CPI. 
C)  Economic growth is measured by the annual increase in a nation's real GDP. 
D)  Discouraged workers are not fully accounted for in the unemployment rate.

Question 10

In the Solow model, technological progress is assumed to occur:

Accepted Answer

A)  systematically as part of capital accumulation. 
B)  randomly outside the system. 
C)  systematically as part of increases in output. 
D)  systematically as part of increases in investment. 
A)  systematically as part of capital accumulation. 
B)  randomly outside the system. 
C)  systematically as part of increases in output. 
D)  systematically as part of increases in investment.

Question 11

The level of GDP that could be produced at full employment is:

Accepted Answer

A)  aggregated GDP. 
B)  desirable nominal GDP. 
C)  potential real GDP. 
D)  unattainable. 
A)  aggregated GDP. 
B)  desirable nominal GDP. 
C)  potential real GDP. 
D)  unattainable.

Question 12

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Accepted Answer

A)  marvellous rate of saving. 
B)  golden rule of saving. 
C)  maximum rate of spending. 
D)  optimum rate of spending. 
A)  marvellous rate of saving. 
B)  golden rule of saving. 
C)  maximum rate of spending. 
D)  optimum rate of spending.

Question 13

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

Accepted Answer

A) True 
 B)False

Question 14

An implication of the Solow growth model is that:

Accepted Answer

A)  economies will automatically move from the optimal saving rate. 
B)  there may be a role for governments to play in moving the economy to its steady state. 
C)  output per worker will be maximised at the steady-state level. 
D)  it is impossible for a country to save 'too much'. 
A)  economies will automatically move from the optimal saving rate. 
B)  there may be a role for governments to play in moving the economy to its steady state. 
C)  output per worker will be maximised at the steady-state level. 
D)  it is impossible for a country to save 'too much'.

Question 15

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

Accepted Answer

A)  allows inflation to be zero. 
B)  keeps output constant. 
C)  keeps unemployment at zero. 
D)  helps keep inflation low. 
A)  allows inflation to be zero. 
B)  keeps output constant. 
C)  keeps unemployment at zero. 
D)  helps keep inflation low.

Question 16

The phase in the business cycle in which real GDP declines is called a:

Accepted Answer

A)  trendline. 
B)  peak. 
C)  recession. 
D)  recovery. 
A)  trendline. 
B)  peak. 
C)  recession. 
D)  recovery.

Question 17

Which of the following is a coincident indicator?

Accepted Answer

A)  CPI data. 
B)  Industrial production. 
C)  Building approvals. 
D)  Retail sales. 
A)  CPI data. 
B)  Industrial production. 
C)  Building approvals. 
D)  Retail sales.

Question 18

What stage of the business cycle immediately follows the trough?

Accepted Answer

A)  Peak. 
B)  Recovery. 
C)  Recession. 
D)  Depression. 
A)  Peak. 
B)  Recovery. 
C)  Recession. 
D)  Depression.

Question 19

Which of the following is true?

Accepted Answer

A)  The GDP gap is the difference between nominal GDP and real GDP. 
B)  Economic growth is needed because it reduces the nation's standard of living. 
C)  Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D)  Economic growth is required to reduce the value of net exports. 
A)  The GDP gap is the difference between nominal GDP and real GDP. 
B)  Economic growth is needed because it reduces the nation's standard of living. 
C)  Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D)  Economic growth is required to reduce the value of net exports.

Question 20

The Solow growth model explains:

Accepted Answer

A)  how consumption, saving, capital, labour and technological change combine in the short term to determine economic growth. 
B)  how consumption, saving, capital, labour and technological change combine in the longer term to determine economic growth. 
C)  how history changes economic growth. 
D)  how net exports determine economic growth. 
A)  how consumption, saving, capital, labour and technological change combine in the short term to determine economic growth. 
B)  how consumption, saving, capital, labour and technological change combine in the longer term to determine economic growth. 
C)  how history changes economic growth. 
D)  how net exports determine economic growth.

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Which of the following is a coincident indicator?

Which of the following is an example of a government policy aimed at increasing the long-term living standards of Australians?

Some scientists have suggested that technology may be subject to:

The GDP gap is the difference between:

If a country has no technological progress, the only way for it to have long-term increases in living standards is by:

The endogenous growth model suggests:

Which of the following is true?

In the Solow model, technological progress is assumed to occur:

The level of GDP that could be produced at full employment is:

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

An implication of the Solow growth model is that:

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

The phase in the business cycle in which real GDP declines is called a:

Which of the following is a coincident indicator?

What stage of the business cycle immediately follows the trough?

Which of the following is true?

The Solow growth model explains:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 13: Business Cycles and Economic Growth

Which of the following statements best represents the impact of technological progress in the Solow growth model?

Which of the following is a coincident indicator?

Which of the following is an example of a government policy aimed at increasing the long-term living standards of Australians?

Some scientists have suggested that technology may be subject to:

The GDP gap is the difference between:

If a country has no technological progress, the only way for it to have long-term increases in living standards is by:

The endogenous growth model suggests:

Which of the following is true?

In the Solow model, technological progress is assumed to occur:

The level of GDP that could be produced at full employment is:

The rate of saving that produces the maximum level of consumption per capita in the long-run steady state is called the:

Endogenous growth theory tries to highlight the importance of capital and labour at the expense of technological progress.

An implication of the Solow growth model is that:

Reducing business cycle fluctuations is an important goal of macroeconomic policy because it:

The phase in the business cycle in which real GDP declines is called a:

Which of the following is a coincident indicator?

What stage of the business cycle immediately follows the trough?

Which of the following is true?

The Solow growth model explains:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters