Question 1

The aggregate production function exhibits _____ returns to physical capital.

Accepted Answer

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

Question 2

Sources of funds for investment spending include both foreign and domestic savings.

Accepted Answer

A) True 
 B)False  True

Question 3

Thomas Malthus:

Accepted Answer

A) was President Reagan's primary economic adviser. 
B) successfully predicted the nationalization of the insurance company AIG. 
C) predicted that limited land supplies would prevent large increases in real incomes per capita. 
D) wrote The Limits to Growth in 1972. 
A) was President Reagan's primary economic adviser. 
B) successfully predicted the nationalization of the insurance company AIG. 
C) predicted that limited land supplies would prevent large increases in real incomes per capita. 
D) wrote The Limits to Growth in 1972. C

Question 4

Natural resources:

Accepted Answer

A) are still the most important factor in determining the productivity of human or physical capital for all countries. 
B) are the only factor that consistently shows a positive effect on productivity for wealthy countries. 
C) are a less significant source of productivity growth in most countries today than in earlier times. 
D) can be used to explain the differences in productivity growth among countries. 
A) are still the most important factor in determining the productivity of human or physical capital for all countries. 
B) are the only factor that consistently shows a positive effect on productivity for wealthy countries. 
C) are a less significant source of productivity growth in most countries today than in earlier times. 
D) can be used to explain the differences in productivity growth among countries.

Question 5

Before the twentieth century, the most important determinant of productivity was:

Accepted Answer

A) technology. 
B) natural resources. 
C) physical capital. 
D) human capital. 
A) technology. 
B) natural resources. 
C) physical capital. 
D) human capital.

Question 6

Human capital is:

Accepted Answer

A) the improvement in labor made possible by education and knowledge that is embodied in the workforce. 
B) the machinery and tools that each worker owns. 
C) robots that can perform tasks that only humans could do in the past. 
D) not as important as physical capital. 
A) the improvement in labor made possible by education and knowledge that is embodied in the workforce. 
B) the machinery and tools that each worker owns. 
C) robots that can perform tasks that only humans could do in the past. 
D) not as important as physical capital.

Question 7

Diminishing returns to physical capital means that as more and more physical capital is combined with a fixed amount of human capital and a fixed technology, eventually:

Accepted Answer

A) aggregate output or real GDP declines. 
B) aggregate output or real GDP grows. 
C) additions to aggregate output or real GDP decline. 
D) additions to aggregate output or real GDP increase. 
A) aggregate output or real GDP declines. 
B) aggregate output or real GDP grows. 
C) additions to aggregate output or real GDP decline. 
D) additions to aggregate output or real GDP increase.

Question 8

Economists use real GDP per capita to measure economic growth:

Accepted Answer

A) because it ignores the effect of price changes. 
B) because poor nations have a large population and the population of richer nations is declining. 
C) because it is the inflation-adjusted value of a country's production of goods and services corrected for the change in a country's population. 
D) even though nominal GNP per capita is a far superior measure of economic growth. 
A) because it ignores the effect of price changes. 
B) because poor nations have a large population and the population of richer nations is declining. 
C) because it is the inflation-adjusted value of a country's production of goods and services corrected for the change in a country's population. 
D) even though nominal GNP per capita is a far superior measure of economic growth.

Question 9

In 2010, the median U.S. household income was approximately:

Accepted Answer

A) $50,000. 
B) $8,000. 
C) $16,000. 
D) $25,000. 
A) $50,000. 
B) $8,000. 
C) $16,000. 
D) $25,000.

Question 10

South Korea has real GDP per capita of $25,000, while England has real GDP per capita of $50,000. If real GDP per capita in South Korea grows at 7% and England's real GDP per capita grows at 3.5%, how long will it take for real GDP per capita in the two nations to converge?

Accepted Answer

A) 10 years 
B) 20 years 
C) 25 years 
D) 35 years 
A) 10 years 
B) 20 years 
C) 25 years 
D) 35 years

Question 11

Since the 1960s, nations like South Korea have been a part of the so-called East Asian economic miracle because:

Accepted Answer

A) high rates of human capital growth have offset slow savings rates. 
B) of high rates of national savings that offset the slower rate of technological progress. 
C) of high savings rates, greater quantities of physical capital per worker, and slower growth of human capital. 
D) of the combination of rapid technological progress, high savings rates, and rapid improvement in human capital. 
A) high rates of human capital growth have offset slow savings rates. 
B) of high rates of national savings that offset the slower rate of technological progress. 
C) of high savings rates, greater quantities of physical capital per worker, and slower growth of human capital. 
D) of the combination of rapid technological progress, high savings rates, and rapid improvement in human capital.

Question 12

In 2010, the U.S. spent 38% of its GDP on investment, while China spent only 16% of its GDP on investment.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer questions:
Figure: Productivity  
-(Figure: Productivity) Look at the figure Productivity. An improvement in technology with everything else remaining unchanged is shown on the diagram as a movement from:

Accepted Answer

A) B to A. 
B) A to B. 
C) B to C. 
D) A to C. 
A) B to A. 
B) A to B. 
C) B to C. 
D) A to C.

Question 14

According to the rule of 70, if real GDP per capita is growing at 2% a year, in 100 years it will have increased by:

Accepted Answer

A) about 4 times. 
B) about 7 times. 
C) almost 30 times. 
D) almost 60 times. 
A) about 4 times. 
B) about 7 times. 
C) almost 30 times. 
D) almost 60 times.

Question 15

To hinder growth, a government might:

Accepted Answer

A) provide basic health measures. 
B) support research and development. 
C) not protect property rights. 
D) encourage saving. 
A) provide basic health measures. 
B) support research and development. 
C) not protect property rights. 
D) encourage saving.

Question 16

The aggregate production function exhibits diminishing returns to labor but not to physical capital.

Accepted Answer

A) True 
 B)False

Question 17

A rise in real GDP that is the same as the rate of population growth leaves the average standard of living unchanged.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following may lead to lower productivity because of a lack of incentives?

Accepted Answer

A) a stable political system 
B) protection of property rights 
C) government subsidies 
D) public education 
A) a stable political system 
B) protection of property rights 
C) government subsidies 
D) public education

Question 19

Real GDP per capita, growing at a constant rate over a 35-year period, has doubled at the end of that period. What must the annual growth rate of real GDP per capita be for this economy?

Accepted Answer

A) 1% 
B) 2% 
C) 4% 
D) 15% 
A) 1% 
B) 2% 
C) 4% 
D) 15%

Question 20

Which of the following factors have contributed to the lack of economic growth in Africa?
I. political instability
II. lack of spending on education and infrastructure
III. malnutrition and disease

Accepted Answer

A) I only 
B) II only 
C) III only 
D) I, II, and III 
A) I only 
B) II only 
C) III only 
D) I, II, and III

The aggregate production function exhibits _____ returns to physical capital.

Sources of funds for investment spending include both foreign and domestic savings.

Thomas Malthus:

Natural resources:

Before the twentieth century, the most important determinant of productivity was:

Human capital is:

Diminishing returns to physical capital means that as more and more physical capital is combined with a fixed amount of human capital and a fixed technology, eventually:

Economists use real GDP per capita to measure economic growth:

In 2010, the median U.S. household income was approximately:

South Korea has real GDP per capita of $25,000, while England has real GDP per capita of $50,000. If real GDP per capita in South Korea grows at 7% and England's real GDP per capita grows at 3.5%, how long will it take for real GDP per capita in the two nations to converge?

Since the 1960s, nations like South Korea have been a part of the so-called East Asian economic miracle because:

In 2010, the U.S. spent 38% of its GDP on investment, while China spent only 16% of its GDP on investment.

Use the following to answer questions: Figure: Productivity -(Figure: Productivity) Look at the figure Productivity. An improvement in technology with everything else remaining unchanged is shown on the diagram as a movement from:

According to the rule of 70, if real GDP per capita is growing at 2% a year, in 100 years it will have increased by:

To hinder growth, a government might:

The aggregate production function exhibits diminishing returns to labor but not to physical capital.

A rise in real GDP that is the same as the rate of population growth leaves the average standard of living unchanged.

Which of the following may lead to lower productivity because of a lack of incentives?

Real GDP per capita, growing at a constant rate over a 35-year period, has doubled at the end of that period. What must the annual growth rate of real GDP per capita be for this economy?

Which of the following factors have contributed to the lack of economic growth in Africa? I. political instability II. lack of spending on education and infrastructure III. malnutrition and disease

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 9: Long-Run Economic Growth

The aggregate production function exhibits _____ returns to physical capital.

Sources of funds for investment spending include both foreign and domestic savings.

Thomas Malthus:

Natural resources:

Before the twentieth century, the most important determinant of productivity was:

Human capital is:

Diminishing returns to physical capital means that as more and more physical capital is combined with a fixed amount of human capital and a fixed technology, eventually:

Economists use real GDP per capita to measure economic growth:

In 2010, the median U.S. household income was approximately:

South Korea has real GDP per capita of $25,000, while England has real GDP per capita of $50,000. If real GDP per capita in South Korea grows at 7% and England's real GDP per capita grows at 3.5%, how long will it take for real GDP per capita in the two nations to converge?

Since the 1960s, nations like South Korea have been a part of the so-called East Asian economic miracle because:

In 2010, the U.S. spent 38% of its GDP on investment, while China spent only 16% of its GDP on investment.

Use the following to answer questions: Figure: Productivity -(Figure: Productivity) Look at the figure Productivity. An improvement in technology with everything else remaining unchanged is shown on the diagram as a movement from:

According to the rule of 70, if real GDP per capita is growing at 2% a year, in 100 years it will have increased by:

To hinder growth, a government might:

The aggregate production function exhibits diminishing returns to labor but not to physical capital.

A rise in real GDP that is the same as the rate of population growth leaves the average standard of living unchanged.

Which of the following may lead to lower productivity because of a lack of incentives?

Real GDP per capita, growing at a constant rate over a 35-year period, has doubled at the end of that period. What must the annual growth rate of real GDP per capita be for this economy?

Which of the following factors have contributed to the lack of economic growth in Africa? I. political instability II. lack of spending on education and infrastructure III. malnutrition and disease

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters