Question 1

The term "brain drain" refers to

Accepted Answer

A)  highly educated individuals who leave developing countries for high-income countries. 
B)  the diminishing returns to studying for an exam. 
C)  the negative impact on brain function of an individual's overinvestment in human capital. 
D)  the decreased quality of the college-educated workforce. 
A)  highly educated individuals who leave developing countries for high-income countries. 
B)  the diminishing returns to studying for an exam. 
C)  the negative impact on brain function of an individual's overinvestment in human capital. 
D)  the decreased quality of the college-educated workforce. A

Question 2

You are an economic advisor to the president.You are asked to recommend a policy to promote long-term economic growth in the economy.Which of the following policies would you choose?

Accepted Answer

A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above 
A)  a reduction in sales taxes 
B)  an investment tax credit 
C)  a reduction in taxes on luxury yachts 
D)  all of the above B

Question 3

Suppose that in 2011 real GDP grew in Estonia by 3% and that the population increased by 5%.Therefore in 2011,Estonia experienced

Accepted Answer

A)  economic growth, but not an increase in living standards. 
B)  economic growth and an increase in living standards. 
C)  no economic growth, but an increase in living standards. 
D)  no economic growth and no increase in living standards. 
A)  economic growth, but not an increase in living standards. 
B)  economic growth and an increase in living standards. 
C)  no economic growth, but an increase in living standards. 
D)  no economic growth and no increase in living standards. A

Question 4

All of the following policies are ways for a country to promote long-run economic growth except

Accepted Answer

A)  increasing vaccinations against infectious diseases. 
B)  undergoing political reform to decrease corruption. 
C)  enacting stronger laws to protect property rights. 
D)  imposing stricter regulations to limit foreign direct investment. 
A)  increasing vaccinations against infectious diseases. 
B)  undergoing political reform to decrease corruption. 
C)  enacting stronger laws to protect property rights. 
D)  imposing stricter regulations to limit foreign direct investment.

Question 5

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

Accepted Answer

Creative destruction,based on the ideas

Question 6

An economic growth model explains

Accepted Answer

A)  changes in real GDP per capita in the long run. 
B)  how changes in the money supply affect real interest rates. 
C)  changes in government tax policies over time. 
D)  the growth rate of the price level over time. 
A)  changes in real GDP per capita in the long run. 
B)  how changes in the money supply affect real interest rates. 
C)  changes in government tax policies over time. 
D)  the growth rate of the price level over time.

Question 7

Significant economic growth did not begin in the world until

Accepted Answer

A)  1000 A.D. 
B)  1750 A.D. 
C)  1820 A.D. 
D)  the 20th century A.D. 
A)  1000 A.D. 
B)  1750 A.D. 
C)  1820 A.D. 
D)  the 20th century A.D.

Question 8

All of the following are reasons why China is unlikely to maintain high enough rates of productivity growth to catch-up with the standard of living in the United States except

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 9

China's economy has grown tremendously from 1979 to the present.The reason the article gives for this growth is

Accepted Answer

A)  the introduction of the centrally planned economy in 1978. 
B)  the introduction of market-oriented reforms in 1978. 
C)  the introduction of the social networking site, MySpace. 
D)  the total lack of governmental intervention in the economy. 
A)  the introduction of the centrally planned economy in 1978. 
B)  the introduction of market-oriented reforms in 1978. 
C)  the introduction of the social networking site, MySpace. 
D)  the total lack of governmental intervention in the economy.

Question 10

Is knowledge capital subject to the law of diminishing returns? Explain.

Accepted Answer

The law of diminishing returns states th

Question 11

By offering more generous unemployment insurance programs,European countries can expect

Accepted Answer

A)  to pay less in taxes than in the United States. 
B)  workers to gain new skills quickly in response to fluctuations in the labor market. 
C)  shorter periods of unemployment for their workers. 
D)  longer periods of unemployment for their workers. 
A)  to pay less in taxes than in the United States. 
B)  workers to gain new skills quickly in response to fluctuations in the labor market. 
C)  shorter periods of unemployment for their workers. 
D)  longer periods of unemployment for their workers.

Question 12

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 13

Which of the following is not one of the three sources of technological change?

Accepted Answer

A)  additional amounts of existing capital 
B)  better machinery and equipment 
C)  increases in human capital 
D)  better means of organizing and managing production 
A)  additional amounts of existing capital 
B)  better machinery and equipment 
C)  increases in human capital 
D)  better means of organizing and managing production

Question 14

In the early 1900s,Henry Ford revolutionized the automotive manufacturing industry by instituting the assembly line.What impact did the assembly line method for producing automobiles have on the per-worker production function for Ford?

Accepted Answer

A)  It became flatter. 
B)  It shifted up. 
C)  It shifted down. 
D)  It became linear. 
A)  It became flatter. 
B)  It shifted up. 
C)  It shifted down. 
D)  It became linear.

Question 15

Which of the following advances contributed to the "new economy" of the mid-1990s?

Accepted Answer

A)  the increased use of the Internet in selling products and services 
B)  expanded cell phone use 
C)  the lower cost and increased availability of laptop computers 
D)  all of the above 
A)  the increased use of the Internet in selling products and services 
B)  expanded cell phone use 
C)  the lower cost and increased availability of laptop computers 
D)  all of the above

Question 16

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s,but eventually this growth slowed.Why did this occur?

Accepted Answer

A)  Capital per hour worked grew rapidly from 1950 to 1980, but technological change occurred very slowly. 
B)  Capital per hour worked grew slowly, but technological change grew very rapidly. 
C)  Increasing implementation of new technologies eventually suffered diminishing marginal returns. 
D)  The centrally planned economy invested too heavily in technological change. 
A)  Capital per hour worked grew rapidly from 1950 to 1980, but technological change occurred very slowly. 
B)  Capital per hour worked grew slowly, but technological change grew very rapidly. 
C)  Increasing implementation of new technologies eventually suffered diminishing marginal returns. 
D)  The centrally planned economy invested too heavily in technological change.

Question 17

The purchase or building by a corporation of a facility in a foreign country is called

Accepted Answer

A)  foreign direct investment. 
B)  foreign portfolio investment. 
C)  foreign capital depreciation. 
D)  globally-directed investment. 
A)  foreign direct investment. 
B)  foreign portfolio investment. 
C)  foreign capital depreciation. 
D)  globally-directed investment.

Question 18

The rapid growth of the Chinese economy should

Accepted Answer

A)  benefit U.S. consumers as they have access to less expensive consumer goods. 
B)  make it more difficult for citizens of the United States to find a job. 
C)  not affect the mix of jobs available to citizens of the United States. 
D)  A and B 
A)  benefit U.S. consumers as they have access to less expensive consumer goods. 
B)  make it more difficult for citizens of the United States to find a job. 
C)  not affect the mix of jobs available to citizens of the United States. 
D)  A and B

Question 19

Explain how market economies are generally better able to achieve technological progress than are centrally planned economies.

Accepted Answer

In a centrally planned economy,decisions

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

The term "brain drain" refers to

You are an economic advisor to the president.You are asked to recommend a policy to promote long-term economic growth in the economy.Which of the following policies would you choose?

Suppose that in 2011 real GDP grew in Estonia by 3% and that the population increased by 5%.Therefore in 2011,Estonia experienced

All of the following policies are ways for a country to promote long-run economic growth except

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

An economic growth model explains

Significant economic growth did not begin in the world until

All of the following are reasons why China is unlikely to maintain high enough rates of productivity growth to catch-up with the standard of living in the United States except

China's economy has grown tremendously from 1979 to the present.The reason the article gives for this growth is

Is knowledge capital subject to the law of diminishing returns? Explain.

By offering more generous unemployment insurance programs,European countries can expect

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

Which of the following is not one of the three sources of technological change?

In the early 1900s,Henry Ford revolutionized the automotive manufacturing industry by instituting the assembly line.What impact did the assembly line method for producing automobiles have on the per-worker production function for Ford?

Which of the following advances contributed to the "new economy" of the mid-1990s?

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s,but eventually this growth slowed.Why did this occur?

The purchase or building by a corporation of a facility in a foreign country is called

The rapid growth of the Chinese economy should

Explain how market economies are generally better able to achieve technological progress than are centrally planned economies.

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

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