Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

From 1990-2010,productivity growth in the United States was ________ the growth rates of other high-income countries.

Accepted Answer

A)  greater than 
B)  less than 
C)  equal to 
D)  greater than for the first 15 years, then less than 
A)  greater than 
B)  less than 
C)  equal to 
D)  greater than for the first 15 years, then less than

Question 3

Countries that are more globalized tend to have

Accepted Answer

A)  lower levels of real GDP per capita. 
B)  a higher likelihood of war or revolution. 
C)  higher growth rates in real GDP per capita. 
D)  lower levels of foreign direct investment. 
A)  lower levels of real GDP per capita. 
B)  a higher likelihood of war or revolution. 
C)  higher growth rates in real GDP per capita. 
D)  lower levels of foreign direct investment.

Question 4

Enforcing property rights in an economy will

Accepted Answer

A)  cause the market system to work less efficiently. 
B)  decrease the level of foreign portfolio investment. 
C)  encourage corruption and expand the underground economy. 
D)  raise the level of investment. 
A)  cause the market system to work less efficiently. 
B)  decrease the level of foreign portfolio investment. 
C)  encourage corruption and expand the underground economy. 
D)  raise the level of investment.

Question 5

Small differences in economic growth rates result in small differences in living standards.

Accepted Answer

A) True 
 B)False

Question 6

According to the World Bank,Albania does one of the worst jobs as a country enforcing the rule of law.The consequence of a weak rule of law is

Accepted Answer

A)  difficulty in attracting investment and low economic growth. 
B)  a decrease in cash transactions and increased efficiency. 
C)  more risk taking on the part of entrepreneurs and greater economic investment. 
D)  strong property rights enforcement leading to greater investment. 
A)  difficulty in attracting investment and low economic growth. 
B)  a decrease in cash transactions and increased efficiency. 
C)  more risk taking on the part of entrepreneurs and greater economic investment. 
D)  strong property rights enforcement leading to greater investment.

Question 7

Table 22-1
  
-Refer to Table 22-1.In the table above,which countries are consistent with the predictions of the economic growth model?

Accepted Answer

A)  Botswana and Thailand 
B)  Japan and Guatemala 
C)  only Japan 
D)  all four countries 
A)  Botswana and Thailand 
B)  Japan and Guatemala 
C)  only Japan 
D)  all four countries

Question 8

When an economy faces diminishing returns,

Accepted Answer

A)  the slope of the per-worker production function becomes steeper as capital per hour worked increases. 
B)  the slope of the per-worker production function becomes flatter as capital per hour worked increases. 
C)  the per-worker production function shifts to the left. 
D)  the per-worker production function shifts to the right. 
A)  the slope of the per-worker production function becomes steeper as capital per hour worked increases. 
B)  the slope of the per-worker production function becomes flatter as capital per hour worked increases. 
C)  the per-worker production function shifts to the left. 
D)  the per-worker production function shifts to the right.

Question 9

Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per hour worked by $500.If capital per hour worked increases further to $25,000,by how much would you expect real GDP per hour worked to increase if there are diminishing returns?

Accepted Answer

A)  by less than $500 
B)  by exactly $500 
C)  by more than $500 but less than $5,000 
D)  by more than $5,000 but less than $20,000 
A)  by less than $500 
B)  by exactly $500 
C)  by more than $500 but less than $5,000 
D)  by more than $5,000 but less than $20,000

Question 10

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 11

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?

Accepted Answer

A)  The growth model predicts that poor countries should catch up with rich countries, but developing countries are not catching up to lower-income industrialized countries as a group. 
B)  The growth model predicts that poor countries will never catch up with rich countries, but lower-income industrialized countries are catching up to higher-income industrialized countries as a group. 
C)  The growth model predicts that poor countries will catch up with rich countries, but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group. 
D)  The growth model predicts that poor countries will catch up with rich countries, and this is what we observe across all developmental categories of countries. 
A)  The growth model predicts that poor countries should catch up with rich countries, but developing countries are not catching up to lower-income industrialized countries as a group. 
B)  The growth model predicts that poor countries will never catch up with rich countries, but lower-income industrialized countries are catching up to higher-income industrialized countries as a group. 
C)  The growth model predicts that poor countries will catch up with rich countries, but lower-income industrialized countries are not catching up to higher-income industrialized countries as a group. 
D)  The growth model predicts that poor countries will catch up with rich countries, and this is what we observe across all developmental categories of countries.

Question 12

The "new economy" that emerged in the mid-1990s is based on

Accepted Answer

A)  manufacturing. 
B)  financial services. 
C)  information technology. 
D)  retail sales. 
A)  manufacturing. 
B)  financial services. 
C)  information technology. 
D)  retail sales.

Question 13

The productivity slowdown of the mid-1970s can be explained by which of the following?

Accepted Answer

A)  excessive use of fiscal policy 
B)  large increases in research and development 
C)  a decline in labor quality 
D)  diminishing marginal returns 
A)  excessive use of fiscal policy 
B)  large increases in research and development 
C)  a decline in labor quality 
D)  diminishing marginal returns

Question 14

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 15

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 16

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

Accepted Answer

A)  reducing physical capital. 
B)  reducing human capital. 
C)  increasing labor productivity. 
D)  increasing technological change. 
A)  reducing physical capital. 
B)  reducing human capital. 
C)  increasing labor productivity. 
D)  increasing technological change.

Question 17

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 18

Why do some firms choose not to file for a patent and instead try to keep the results of their research a trade secret?

Accepted Answer

A)  because firms must disclose information about the product or process being patented in a patent application 
B)  because trade secrets are never divulged 
C)  because a patent only gives the inventor exclusive rights to a product or process for 5 years 
D)  because trade secrets provide the same exclusive legal rights to a product as a patent does 
A)  because firms must disclose information about the product or process being patented in a patent application 
B)  because trade secrets are never divulged 
C)  because a patent only gives the inventor exclusive rights to a product or process for 5 years 
D)  because trade secrets provide the same exclusive legal rights to a product as a patent does

Question 19

Figure 22-1  
-Refer to Figure 22-1.Diminishing marginal returns is illustrated in the per-worker production function in the figure above by a movement from
A) A to C.
B) B to C.
C) C to D.
D) D to C.

Accepted Answer

The answer of Figure 22-1  
-Refer to Figure 22-1.Diminishing...

Question 20

If real GDP per capita in Ireland is estimated to be $7,400 in 2012,what will real GDP per capita be in 2017 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

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

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

From 1990-2010,productivity growth in the United States was ________ the growth rates of other high-income countries.

Countries that are more globalized tend to have

Enforcing property rights in an economy will

Small differences in economic growth rates result in small differences in living standards.

According to the World Bank,Albania does one of the worst jobs as a country enforcing the rule of law.The consequence of a weak rule of law is

Table 22-1 -Refer to Table 22-1.In the table above,which countries are consistent with the predictions of the economic growth model?

When an economy faces diminishing returns,

Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per hour worked by $500.If capital per hour worked increases further to $25,000,by how much would you expect real GDP per hour worked to increase if there are diminishing returns?

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

Which of the following is a true statement regarding the economic growth model's predictions and how it actually affects the real world?

The "new economy" that emerged in the mid-1990s is based on

The productivity slowdown of the mid-1970s can be explained by which of the following?

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

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

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

Knowledge capital is

Why do some firms choose not to file for a patent and instead try to keep the results of their research a trade secret?

Figure 22-1 -Refer to Figure 22-1.Diminishing marginal returns is illustrated in the per-worker production function in the figure above by a movement from A) A to C. B) B to C. C) C to D. D) D to C.

If real GDP per capita in Ireland is estimated to be $7,400 in 2012,what will real GDP per capita be in 2017 if real GDP per capita grows at an annual rate of 2.8%?

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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