Question 1

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 2

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ the research and development of other firms.

Accepted Answer

A) make bids on 
B) not use 
C) ignore 
D) free ride on 
A) make bids on 
B) not use 
C) ignore 
D) free ride on

Question 3

Does globalization promote economic growth,and how does globalization affect the welfare of a given country's citizens?

Accepted Answer

More globalized countries generally expe

Question 4

The rapid growth of China's economy relative to the United States has benefitted U.S.consumers because

Accepted Answer

A) competition from China has made jobs harder to find in the United States. 
B) U.S.consumers can purchase more lower-priced goods made in China. 
C) the United States has comparative advantage in more goods than China does. 
D) goods made in China are always of higher quality than goods made in the United States. 
A) competition from China has made jobs harder to find in the United States. 
B) U.S.consumers can purchase more lower-priced goods made in China. 
C) the United States has comparative advantage in more goods than China does. 
D) goods made in China are always of higher quality than goods made in the United States.

Question 5

What are some of the reasons used to explain improvements in health,education,democracy,and political stability in many low-income countries?

Accepted Answer

Reasons include increases in technology

Question 6

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 7

The best measure of a country's standard of living is

Accepted Answer

A) GDP per labor hour. 
B) GDP per unit of capital. 
C) GDP per capita. 
D) total nominal GDP. 
A) GDP per labor hour. 
B) GDP per unit of capital. 
C) GDP per capita. 
D) total nominal GDP.

Question 8

As predicted by the economic growth model,countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita.

Accepted Answer

A) True 
 B)False

Question 9

Most of the countries of Africa are considered newly industrializing countries.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Figure 22-3  
-Refer to Figure 22-3.Technological change is shown in the figure above by the movement from

Accepted Answer

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

Question 12

One reason why many low-income countries experience low rates of growth is because of poor public education and health.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that in 2016,real GDP grew in Estonia by 3% and the population increased by 5%.Therefore,in 2016,Estonia experienced

Accepted Answer

A) economic growth,but not an increase in living standards. 
B) economic growth and an increase in living standards. 
C) no economic growth,but an increase in living standards. 
D) no economic growth and no increase in living standards. 
A) economic growth,but not an increase in living standards. 
B) economic growth and an increase in living standards. 
C) no economic growth,but an increase in living standards. 
D) no economic growth and no increase in living standards.

Question 14

If the per-worker production function shifts down,

Accepted Answer

A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes steeper. 
D) positive technological change has occurred in the economy. 
A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. 
B) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. 
C) the per-worker production function becomes steeper. 
D) positive technological change has occurred in the economy.

Question 15

Robert Lucas,a Nobel laureate in economics,argues that there are increasing returns to

Accepted Answer

A) knowledge capital. 
B) physical capital. 
C) financial capital. 
D) human capital. 
A) knowledge capital. 
B) physical capital. 
C) financial capital. 
D) human capital.

Question 16

List two ways the labor force experience is different between workers in Europe and in the United States.How do these differences influence productivity?

Accepted Answer

It is harder to fire workers in many Eur

Question 17

The economic growth model predicts that

Accepted Answer

A) GDP per capita of rich countries will grow more rapidly than in poor countries. 
B) GDP per capita of poor countries will grow more rapidly than in rich countries. 
C) Governments must centrally direct the economy for growth to occur. 
D) GDP per capita of poor countries will never change. 
A) GDP per capita of rich countries will grow more rapidly than in poor countries. 
B) GDP per capita of poor countries will grow more rapidly than in rich countries. 
C) Governments must centrally direct the economy for growth to occur. 
D) GDP per capita of poor countries will never change.

Question 18

Which of the following advances contributed to the "new economy" of the mid-1990s?

Accepted Answer

A) the increased use of the Internet in selling products and services 
B) expanded cell phone use 
C) the lower cost and increased availability of laptop computers 
D) all of the above 
A) the increased use of the Internet in selling products and services 
B) expanded cell phone use 
C) the lower cost and increased availability of laptop computers 
D) all of the above

Question 19

Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds.Which of the following is not one of those reasons?

Accepted Answer

A) a smaller capital requirement for modern information technology firms 
B) the falling price of capital relative to other goods 
C) a reduced demand for housing due to slowing population growth 
D) the continued decrease in the value of the dollar relative to the currencies of major U.S.trading partners 
A) a smaller capital requirement for modern information technology firms 
B) the falling price of capital relative to other goods 
C) a reduced demand for housing due to slowing population growth 
D) the continued decrease in the value of the dollar relative to the currencies of major U.S.trading partners

Question 20

The growth rate of real GDP per capita in Mexico was negative in which of the following time periods?

Accepted Answer

A) 1980-1989 
B) 1990-1999 
C) 2000-2014 
D) all of the above 
A) 1980-1989 
B) 1990-1999 
C) 2000-2014 
D) all of the above

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

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

Because knowledge capital is nonexcludable and nonrival,firms have an incentive to ________ the research and development of other firms.

Does globalization promote economic growth,and how does globalization affect the welfare of a given country's citizens?

The rapid growth of China's economy relative to the United States has benefitted U.S.consumers because

What are some of the reasons used to explain improvements in health,education,democracy,and political stability in many low-income countries?

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

The best measure of a country's standard of living is

As predicted by the economic growth model,countries that start with lower levels of GDP per capita always grow faster than countries that start with higher levels of GDP per capita.

Most of the countries of Africa are considered newly industrializing countries.

Enforcing property rights in an economy will

Figure 22-3 -Refer to Figure 22-3.Technological change is shown in the figure above by the movement from

One reason why many low-income countries experience low rates of growth is because of poor public education and health.

Suppose that in 2016,real GDP grew in Estonia by 3% and the population increased by 5%.Therefore,in 2016,Estonia experienced

If the per-worker production function shifts down,

Robert Lucas,a Nobel laureate in economics,argues that there are increasing returns to

List two ways the labor force experience is different between workers in Europe and in the United States.How do these differences influence productivity?

The economic growth model predicts that

Which of the following advances contributed to the "new economy" of the mid-1990s?

Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds.Which of the following is not one of those reasons?

The growth rate of real GDP per capita in Mexico was negative in which of the following time periods?

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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