Question 1

Growth in real GDP per hour worked in the United States was slowest during what period of time?

Accepted Answer

A)  1900-1949 
B)  1950-1972 
C)  1973-1994 
D)  1995-2008 
A)  1900-1949 
B)  1950-1972 
C)  1973-1994 
D)  1995-2008

Question 2

Which of the following government policies would most likely result in an increase in economic growth?

Accepted Answer

A)  a decrease in the life of a patent from 20 years to 15 years 
B)  a decrease in the interest rate at which the government provides student loans 
C)  a decrease in government spending on grants issued through the National Institutes of Health 
D)  decreased copyright protection on music and movies 
A)  a decrease in the life of a patent from 20 years to 15 years 
B)  a decrease in the interest rate at which the government provides student loans 
C)  a decrease in government spending on grants issued through the National Institutes of Health 
D)  decreased copyright protection on music and movies

Question 3

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 2009.

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 4

If the Commerce Department adjusts the growth rate of GDP downward for the first quarter of 2011,and the Bureau of Labor Statistics adjusts the number of hours worked upward for the first quarter of 2011,what will the Bureau of Labor Statistics do in terms of revising the figures on the growth rate of labor productivity for the first quarter of 2011?

Accepted Answer

A)  The BLS will adjust the growth rate downwards. 
B)  The BLS will adjust the growth rate upwards. 
C)  The BLS will not change the growth rate of productivity. 
D)  The BLS will adjust the level of labor productivity upward and the growth rate downward. 
A)  The BLS will adjust the growth rate downwards. 
B)  The BLS will adjust the growth rate upwards. 
C)  The BLS will not change the growth rate of productivity. 
D)  The BLS will adjust the level of labor productivity upward and the growth rate downward.

Question 5

Robert Lucas,a Nobel laureate in economics,argues that there are ________ returns to human capital.

Accepted Answer

A)  increasing 
B)  decreasing 
C)  constant 
D)  negative 
A)  increasing 
B)  decreasing 
C)  constant 
D)  negative

Question 6

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Accepted Answer

A) True 
 B)False

Question 7

Creative destruction means that

Accepted Answer

A)  firms develop new products that replace old products in the economy, thereby encouraging economic growth. 
B)  economic growth can only be sustained if capital depreciates rapidly. 
C)  knowledge capital can be created through a system of government subsidies for education and research and development. 
D)  research and development should only be financed if research and development is incremental (a result of making small changes to existing products). 
A)  firms develop new products that replace old products in the economy, thereby encouraging economic growth. 
B)  economic growth can only be sustained if capital depreciates rapidly. 
C)  knowledge capital can be created through a system of government subsidies for education and research and development. 
D)  research and development should only be financed if research and development is incremental (a result of making small changes to existing products).

Question 8

The labor productivity slowdown in the United States in the 1970s was due to declining quality of education in the United States,because no other industrialized country experienced the same labor productivity slowdown at the same time.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true regarding the productivity slowdown in the United States during the mid-1970s?

Accepted Answer

A)  The productivity slowdown occurred despite a rising quality of labor. 
B)  The productivity slowdown was unique to the United States as foreign countries experienced unprecedented rates of growth during that time. 
C)  High oil prices raised the costs of doing business for markets worldwide, and reduced output worldwide as well. 
D)  The move toward a "New Economy" ended in the early 1970s, resulting in less technological progress in the United States during the mid-1970s. 
A)  The productivity slowdown occurred despite a rising quality of labor. 
B)  The productivity slowdown was unique to the United States as foreign countries experienced unprecedented rates of growth during that time. 
C)  High oil prices raised the costs of doing business for markets worldwide, and reduced output worldwide as well. 
D)  The move toward a "New Economy" ended in the early 1970s, resulting in less technological progress in the United States during the mid-1970s.

Question 10

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should ________ the equilibrium level of loanable funds and ________ the rate of long-term growth.

Accepted Answer

A)  decrease; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  increase; increase 
A)  decrease; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  increase; increase

Question 11

Between 1960 and 2010,deaths among children have

Accepted Answer

A)  declined in most high-income countries and have risen in most low-income countries. 
B)  declined in nearly all countries, including most low-income countries. 
C)  remained relatively unchanged in most high-income countries and have declined in most low-income countries. 
D)  declined in most high-income countries and have remained relatively unchanged in most low-income countries. 
A)  declined in most high-income countries and have risen in most low-income countries. 
B)  declined in nearly all countries, including most low-income countries. 
C)  remained relatively unchanged in most high-income countries and have declined in most low-income countries. 
D)  declined in most high-income countries and have remained relatively unchanged in most low-income countries.

Question 12

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 13

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

Accepted Answer

As the level of capital per hour worked

Question 14

If real GDP per capita in the United States is $8,000 in 2011,and if real GDP per capita is $12,000 in 2021,what is the average annual percent change in the growth rate of GDP per capita between 2011 and 2021?

Accepted Answer

A)  3.33% 
B)  5% 
C)  33% 
D)  50% 
A)  3.33% 
B)  5% 
C)  33% 
D)  50%

Question 15

Draw a graph of "catch-up" that shows where you would expect to see a country with low saving rates and low levels of health and education.How would you expect real GDP per capita to grow in a country like this? Explain.

Accepted Answer

Countries with low saving rates and low

Question 16

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 17

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century. 
A)  the seventeenth century. 
B)  the eighteenth century. 
C)  the nineteenth century. 
D)  the twentieth century.

Question 18

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 19

Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can

Accepted Answer

A)  increase infant mortality. 
B)  increase standards of living. 
C)  increase the level of poverty. 
D)  lower life expectancy. 
A)  increase infant mortality. 
B)  increase standards of living. 
C)  increase the level of poverty. 
D)  lower life expectancy.

Question 20

Figure 22-3  
-Refer to Figure 22-3.Based on the "catch-up line" drawn above,poorer countries are more likely to be at a point like ________,where growth in GDP is relatively ________,while richer countries are more likely to be at a point like ________,where growth in GDP is relatively ________.

Accepted Answer

A)  A; low; B; high 
B)  A; high; B; low 
C)  B; low; A; high 
D)  B; high; A; low 
A)  A; low; B; high 
B)  A; high; B; low 
C)  B; low; A; high 
D)  B; high; A; low

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

Growth in real GDP per hour worked in the United States was slowest during what period of time?

Which of the following government policies would most likely result in an increase in economic growth?

Robert Lucas,a Nobel laureate in economics,argues that there are ________ returns to human capital.

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Creative destruction means that

The labor productivity slowdown in the United States in the 1970s was due to declining quality of education in the United States,because no other industrialized country experienced the same labor productivity slowdown at the same time.

Which of the following is true regarding the productivity slowdown in the United States during the mid-1970s?

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should ________ the equilibrium level of loanable funds and ________ the rate of long-term growth.

Between 1960 and 2010,deaths among children have

An economy can improve its standard of living by

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

If real GDP per capita in the United States is $8,000 in 2011,and if real GDP per capita is $12,000 in 2021,what is the average annual percent change in the growth rate of GDP per capita between 2011 and 2021?

Draw a graph of "catch-up" that shows where you would expect to see a country with low saving rates and low levels of health and education.How would you expect real GDP per capita to grow in a country like this? Explain.

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?

Growth in real GDP per capita for the world economy was greatest during

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

Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can

Figure 22-3 -Refer to Figure 22-3.Based on the "catch-up line" drawn above,poorer countries are more likely to be at a point like ________,where growth in GDP is relatively ________,while richer countries are more likely to be at a point like ________,where growth in GDP is relatively ________.

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

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should the equilibrium level of loanable funds and the rate of long-term growth.

Figure 22-3 -Refer to Figure 22-3.Based on the "catch-up line" drawn above,poorer countries are more likely to be at a point like ,where growth in GDP is relatively ,while richer countries are more likely to be at a point like ,where growth in GDP is relatively .