Question 1

An increase in human capital will tend to cause which of the following?

Accepted Answer

A)  increase economic growth 
B)  increase the standard of living 
C)  increase labor productivity 
D)  all of the above 
A)  increase economic growth 
B)  increase the standard of living 
C)  increase labor productivity 
D)  all of the above

Question 2

What are the alternative causes of the observed secular stagnation pattern of advanced countries in the recent decade, as argued by economists?

Accepted Answer

The four hypotheses that economists have

Question 3

Economic growth may understate changes in standards of living if

Accepted Answer

A)  the growth is accompanied by increasing congestion. 
B)  leisure time is also increasing. 
C)  the types of jobs generated feelings of alienation. 
D)  deflation is taking place. 
A)  the growth is accompanied by increasing congestion. 
B)  leisure time is also increasing. 
C)  the types of jobs generated feelings of alienation. 
D)  deflation is taking place.

Question 4

What occurs in the second stage of economic development?

Accepted Answer

A)  Most of the labor force works in agriculture. 
B)  The service sector comes to the forefront. 
C)  The manufacturing sector declines in importance. 
D)  Manufacturing gains in importance and employs a large portion of the labor force. 
A)  Most of the labor force works in agriculture. 
B)  The service sector comes to the forefront. 
C)  The manufacturing sector declines in importance. 
D)  Manufacturing gains in importance and employs a large portion of the labor force.

Question 5

The more certain private property rights are

Accepted Answer

A)  the less people need to invest in education or human capital development. 
B)  the less entrepreneurship there will be. 
C)  the more capital accumulation there will be. 
D)  the more an economy must grow to maintain a certain living standard. 
A)  the less people need to invest in education or human capital development. 
B)  the less entrepreneurship there will be. 
C)  the more capital accumulation there will be. 
D)  the more an economy must grow to maintain a certain living standard.

Question 6

A higher rate of saving should lead to

Accepted Answer

A)  higher current consumption. 
B)  less growth. 
C)  more investment, higher capital growth, and more future consumption. 
D)  a higher price level and reduced future consumption. 
A)  higher current consumption. 
B)  less growth. 
C)  more investment, higher capital growth, and more future consumption. 
D)  a higher price level and reduced future consumption.

Question 7

New growth theory emphasizes all of the following EXCEPT

Accepted Answer

A)  technology. 
B)  import restrictions. 
C)  research and development. 
D)  innovation. 
A)  technology. 
B)  import restrictions. 
C)  research and development. 
D)  innovation.

Question 8

New growth theory supports the idea that I. economic growth can continue as long as we keep finding new ideas.
II) increases in human capital can lead to greater rates of economic growth.

Accepted Answer

A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II 
A)  I only 
B)  II only 
C)  Both I and II 
D)  Neither I nor II

Question 9

Which of the following statements is NOT true about economic growth?

Accepted Answer

A)  When growth occurs the production possibilities curve shifts outward. 
B)  Growth represents an increase in a nation's productive capacity. 
C)  Growth is measured as the overall level of real GDP. 
D)  Growth generally means that overall the members of the nation are better off materially. 
A)  When growth occurs the production possibilities curve shifts outward. 
B)  Growth represents an increase in a nation's productive capacity. 
C)  Growth is measured as the overall level of real GDP. 
D)  Growth generally means that overall the members of the nation are better off materially.

Question 10

Suppose two countries have per capita real GDP of $20,000 in 2015. Country A has a growth rate of 4 percent and Country B has a growth rate of 5 percent. By 2018, the per capita real GDPs for the two countries, respectively, are (rounded)

Accepted Answer

A)  $21,630 and $22,050. 
B)  $22,400 and $23,000. 
C)  $22,500 and $23,150. 
D)  $25,000 and $26,500. 
A)  $21,630 and $22,050. 
B)  $22,400 and $23,000. 
C)  $22,500 and $23,150. 
D)  $25,000 and $26,500.

Question 11

According to new growth theory, economic growth is driven by

Accepted Answer

A)  positive externalities. 
B)  the division of labor. 
C)  higher birth rates. 
D)  new ideas. 
A)  positive externalities. 
B)  the division of labor. 
C)  higher birth rates. 
D)  new ideas.

Question 12

Which of the following would typically be considered a cost of economic growth?

Accepted Answer

A)  increased illiteracy 
B)  decreased levels of health 
C)  increased poverty 
D)  urban congestion 
A)  increased illiteracy 
B)  decreased levels of health 
C)  increased poverty 
D)  urban congestion

Question 13

The most important thing about higher labor productivity is that it means

Accepted Answer

A)  we are doing better than anyone else is. 
B)  we can compete well with other nations. 
C)  we can achieve a happier population. 
D)  we can have a higher standard of living. 
A)  we are doing better than anyone else is. 
B)  we can compete well with other nations. 
C)  we can achieve a happier population. 
D)  we can have a higher standard of living.

Question 14

The reason that patents are granted is

Accepted Answer

A)  to encourage a high rate of consumption. 
B)  to protect new techniques developed through research and development. 
C)  to encourage free trade. 
D)  to increase the labor force. 
A)  to encourage a high rate of consumption. 
B)  to protect new techniques developed through research and development. 
C)  to encourage free trade. 
D)  to increase the labor force.

Question 15

A country has had its per capital real GDP remain constant for several years. During this period this country

Accepted Answer

A)  has not experienced any economic growth. 
B)  may have experienced economic growth if the average hours worked per week have fallen. 
C)  will have experienced an inward shift of the production possibilities curve. 
D)  will have an increase in the number of poor people. 
A)  has not experienced any economic growth. 
B)  may have experienced economic growth if the average hours worked per week have fallen. 
C)  will have experienced an inward shift of the production possibilities curve. 
D)  will have an increase in the number of poor people.

Question 16

Which of the following factors are considered under "new growth theory"?

Accepted Answer

A)  technology 
B)  research 
C)  innovation 
D)  All of the above are correct. 
A)  technology 
B)  research 
C)  innovation 
D)  All of the above are correct.

Question 17

Traditionally, economists regarded improvements in technology as

Accepted Answer

A)  the most important factor that helped explain economic growth, and basically the only factor that would cause economic growth. 
B)  an outside factor that helped explain economic growth. 
C)  an important factor in explaining economic growth that was due to economic forces that also could easily be explained. 
D)  unrelated to economic growth in any systematic way. 
A)  the most important factor that helped explain economic growth, and basically the only factor that would cause economic growth. 
B)  an outside factor that helped explain economic growth. 
C)  an important factor in explaining economic growth that was due to economic forces that also could easily be explained. 
D)  unrelated to economic growth in any systematic way.

Question 18

According to economist Paul Romer, economies seeking high economic growth must

Accepted Answer

A)  encourage consumption by households. 
B)  invest in knowledge. 
C)  drastically lower their standards of living. 
D)  reduce their population growth by adopting a one-child policy. 
A)  encourage consumption by households. 
B)  invest in knowledge. 
C)  drastically lower their standards of living. 
D)  reduce their population growth by adopting a one-child policy.

Question 19

An increase in a country's saving rate will tend to cause which of the following in the long run?

Accepted Answer

A)  a reduction in per capita real GDP 
B)  an increase in economic growth 
C)  an increase in the unemployment rate 
D)  an increase in the rate of inflation 
A)  a reduction in per capita real GDP 
B)  an increase in economic growth 
C)  an increase in the unemployment rate 
D)  an increase in the rate of inflation

Question 20

Paul Romer's theory of economic growth differs from traditional theories in that

Accepted Answer

A)  Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital. 
B)  Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital. 
C)  Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant. 
D)  Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect. 
A)  Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital. 
B)  Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital. 
C)  Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant. 
D)  Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect.

Exam 9: Global Economic Growth and Development

An increase in human capital will tend to cause which of the following?

What are the alternative causes of the observed secular stagnation pattern of advanced countries in the recent decade, as argued by economists?

Economic growth may understate changes in standards of living if

What occurs in the second stage of economic development?

The more certain private property rights are

A higher rate of saving should lead to

New growth theory emphasizes all of the following EXCEPT

New growth theory supports the idea that I. economic growth can continue as long as we keep finding new ideas. II) increases in human capital can lead to greater rates of economic growth.

Which of the following statements is NOT true about economic growth?

Suppose two countries have per capita real GDP of $20,000 in 2015. Country A has a growth rate of 4 percent and Country B has a growth rate of 5 percent. By 2018, the per capita real GDPs for the two countries, respectively, are (rounded)

According to new growth theory, economic growth is driven by

Which of the following would typically be considered a cost of economic growth?

The most important thing about higher labor productivity is that it means

The reason that patents are granted is

A country has had its per capital real GDP remain constant for several years. During this period this country

Which of the following factors are considered under "new growth theory"?

Traditionally, economists regarded improvements in technology as

According to economist Paul Romer, economies seeking high economic growth must

An increase in a country's saving rate will tend to cause which of the following in the long run?

Paul Romer's theory of economic growth differs from traditional theories in that

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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