Question 1

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 2

Increased foreign direct investment in India has contributed to its recent economic growth.

Accepted Answer

A) True 
 B)False

Question 3

In the United States,the annual growth rate of real GDP per hour worked between 2006 and 2014 averaged

Accepted Answer

A) -0.3%. 
B) 1.2%. 
C) 6.9%. 
D) 10.2%. 
A) -0.3%. 
B) 1.2%. 
C) 6.9%. 
D) 10.2%.

Question 4

Which of the following countries had the highest GDP per capita in 2014?

Accepted Answer

A) Qatar 
B) United States 
C) Japan 
D) Norway 
A) Qatar 
B) United States 
C) Japan 
D) Norway

Question 5

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.

Question 6

Which of the following is not a reason why the Industrial Revolution occurred when and where it did?

Accepted Answer

A) The British government was committed to upholding private property rights. 
B) The British government was able to eliminate arbitrary increases in taxes. 
C) The British government was able to more easily seize wealth. 
D) Institutional changes by the British government helped protect wealth. 
A) The British government was committed to upholding private property rights. 
B) The British government was able to eliminate arbitrary increases in taxes. 
C) The British government was able to more easily seize wealth. 
D) Institutional changes by the British government helped protect wealth.

Question 7

In a small Asian country,it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $5 million to $6 million.If the number of hours worked in the labor force does not change,what does this information tell you about the slope of the per-worker production function in this range?

Accepted Answer

A) The slope is -4. 
B) The slope is 1/4. 
C) The slope is 4. 
D) The slope is 8. 
A) The slope is -4. 
B) The slope is 1/4. 
C) The slope is 4. 
D) The slope is 8.

Question 8

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 9

The small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s are referred to as

Accepted Answer

A) newly industrializing countries. 
B) countries with low standards of living. 
C) education-deprived countries. 
D) industrial countries. 
A) newly industrializing countries. 
B) countries with low standards of living. 
C) education-deprived countries. 
D) industrial countries.

Question 10

Which of the following accurately describes growth rates in the United States from 1900 to the present?

Accepted Answer

A) Growth rates rose until the 1970s and then fell until the present. 
B) Growth rates have risen continuously from 1900 to the present. 
C) Growth rates rose until the 1970s,slowed until the 1990s,rose again until 2005,and then slowed again to the present. 
D) Growth rates have fallen continuously from 1900 to the present. 
A) Growth rates rose until the 1970s and then fell until the present. 
B) Growth rates have risen continuously from 1900 to the present. 
C) Growth rates rose until the 1970s,slowed until the 1990s,rose again until 2005,and then slowed again to the present. 
D) Growth rates have fallen continuously from 1900 to the present.

Question 11

Some economists argue that the productivity slowdown from mid-1970s to mid-1990s actually didn't happen,but just "appeared" to happen because

Accepted Answer

A) exports were becoming a less important part of the economy,and it was hard to measure decreases in output from exports. 
B) new environmental laws had passed and forced firms to spend to reduce pollution,and this spending did not raise output. 
C) increased spending on health and safety raised worker productivity. 
D) of the high inflation levels of the 1970s. 
A) exports were becoming a less important part of the economy,and it was hard to measure decreases in output from exports. 
B) new environmental laws had passed and forced firms to spend to reduce pollution,and this spending did not raise output. 
C) increased spending on health and safety raised worker productivity. 
D) of the high inflation levels of the 1970s.

Question 12

Table 22-6
 $$\begin{array} { | l | c | c | } 
\hline { \text { Country } } & \begin{array} { c } 
\text { Real GDP per Capita } \
\text { in 1960(1996 dollars) }
\end{array} & \begin{array} { c } 
\text { Average Annual Growth in } \
\text { Real GDP per Capita between } \
\mathbf { 1 9 6 0 } \text { and 2000 }
\end{array} \
\hline \text { India } & \$ 847 & 4.70 \% \
\hline \text { Bangladesh } & 1,057 & 1.45 \% \
\hline \text { Honduras } & 1,700 & 0.50 \% \
\hline \text { Bolivia } & 2,354 & 0.38 \% \
\hline
\end{array}$$
-Refer to Table 22-6.Consider the statistics in the table above in describing the developing countries.Are these consistent with the economic growth model? Briefly explain.

Accepted Answer

These statistics for developing countrie

Question 13

List four types of government policies which can aid economic growth.

Accepted Answer

Governments can aid economic growth thro

Question 14

Corruption

Accepted Answer

A) curtails economic growth. 
B) raises the rate of growth as bribes enhance income. 
C) is eliminated by foreign direct investment. 
D) acts as a magnet for foreign direct investment. 
A) curtails economic growth. 
B) raises the rate of growth as bribes enhance income. 
C) is eliminated by foreign direct investment. 
D) acts as a magnet for foreign direct investment.

Question 15

Figure 22-1  
-Refer to Figure 22-1.Using the per-worker production function in the figure above,the largest changes in an economy's standard of living would be achieved by a movement from

Accepted Answer

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

Question 16

Figure 22-5  
-Refer to Figure 22-5.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

Question 17

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 18

The per-worker production function has a ________ slope,indicating that increases in capital per hour worked ________ real GDP.

Accepted Answer

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

Question 19

What is the difference between foreign direct investment and foreign portfolio investment?

Accepted Answer

A) Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms,while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. 
B) Individuals engage in foreign portfolio investment,but only firms can engage in foreign direct investment. 
C) Foreign direct investment only takes place when governments make official purchases or foreign investments,while foreign portfolio investment takes place when firms,individuals,or the government purchase foreign investments. 
D) Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have,but foreign portfolio investment does not expand that access. 
A) Foreign direct investment involves purchases of foreign stock or bonds by individuals or firms,while foreign portfolio investment involves a firm purchasing or building a facility in a foreign country. 
B) Individuals engage in foreign portfolio investment,but only firms can engage in foreign direct investment. 
C) Foreign direct investment only takes place when governments make official purchases or foreign investments,while foreign portfolio investment takes place when firms,individuals,or the government purchase foreign investments. 
D) Foreign direct investment can give a low-income country access to funds and technology it would not otherwise have,but foreign portfolio investment does not expand that access.

Question 20

If property rights are not enforced in a country

Accepted Answer

A) the market system will still work smoothly. 
B) entrepreneurs are unlikely to risk their own funds investing in such an economy. 
C) that country's growth rate will not be affected. 
D) that country will grow more rapidly because of the reduction of law suits. 
A) the market system will still work smoothly. 
B) entrepreneurs are unlikely to risk their own funds investing in such an economy. 
C) that country's growth rate will not be affected. 
D) that country will grow more rapidly because of the reduction of law suits.

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

An economy can improve its standard of living by

Increased foreign direct investment in India has contributed to its recent economic growth.

In the United States,the annual growth rate of real GDP per hour worked between 2006 and 2014 averaged

Which of the following countries had the highest GDP per capita in 2014?

The term "brain drain" refers to

Which of the following is not a reason why the Industrial Revolution occurred when and where it did?

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

The small group of East Asian countries that experienced high rates of growth in the 1980s and 1990s are referred to as

Which of the following accurately describes growth rates in the United States from 1900 to the present?

Some economists argue that the productivity slowdown from mid-1970s to mid-1990s actually didn't happen,but just "appeared" to happen because

List four types of government policies which can aid economic growth.

Corruption

Figure 22-1 -Refer to Figure 22-1.Using the per-worker production function in the figure above,the largest changes in an economy's standard of living would be achieved by a movement from

Figure 22-5 -Refer to Figure 22-5.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 ________.

An economic growth model explains

The per-worker production function has a ________ slope,indicating that increases in capital per hour worked ________ real GDP.

What is the difference between foreign direct investment and foreign portfolio investment?

If property rights are not enforced in a country

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

Figure 22-5 -Refer to Figure 22-5.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 .

The per-worker production function has a slope,indicating that increases in capital per hour worked real GDP.