Question 1

Economic decline will shift a society's production possibility frontier down and to the left.

Accepted Answer

A) True 
 B)False

Question 2

If the capital stock ________ while the supply of labor ________, it is likely that the productivity of labor will fall.

Accepted Answer

A)  increases; decreases 
B)  remains fixed; increases 
C)  increases; increases 
D)  increases; remains fixed 
A)  increases; decreases 
B)  remains fixed; increases 
C)  increases; increases 
D)  increases; remains fixed

Question 3

Related to the Economics in Practice on p. 308: The emigration of Jewish scientists from Germany to the United States in the late 1930s and early 1940s may have increased patent rates in their fields of chemistry by

Accepted Answer

A)  up to 5%. 
B)  15%. 
C)  more than 30%. 
D)  over 100%. 
A)  up to 5%. 
B)  15%. 
C)  more than 30%. 
D)  over 100%.

Question 4

According to predictions made by the Club of Rome in 1972, the collapse of the world economy will occur because of

Accepted Answer

A)  the world's limited capacity to produce food. 
B)  the depletion of nonrenewable resources. 
C)  the ever-increasing birthrate in developed countries. 
D)  low saving rates and, therefore, low rates of capital accumulation. 
A)  the world's limited capacity to produce food. 
B)  the depletion of nonrenewable resources. 
C)  the ever-increasing birthrate in developed countries. 
D)  low saving rates and, therefore, low rates of capital accumulation.

Question 5

As growth progresses and countries become richer, pollution

Accepted Answer

A)  tends to fall. 
B)  rises exponentially. 
C)  rarely changes. 
D)  levels double. 
A)  tends to fall. 
B)  rises exponentially. 
C)  rarely changes. 
D)  levels double.

Question 6

Increased human capital is a source of

Accepted Answer

A)  an increased labor force rate. 
B)  increased productivity. 
C)  decreased wages. 
D)  decreased output. 
A)  an increased labor force rate. 
B)  increased productivity. 
C)  decreased wages. 
D)  decreased output.

Question 7

Refer to the information provided in Figure 16.1 below to answer the questions that follow.   Figure 16.1
-Refer to Figure 16.1. Economic growth is represented by

Accepted Answer

A)  a movement from point D to point C. 
B)  a movement from point A to point C. 
C)  a movement from point D to point A. 
D)  all of the above 
A)  a movement from point D to point C. 
B)  a movement from point A to point C. 
C)  a movement from point D to point A. 
D)  all of the above

Question 8

Which of the following was one of the likely causes of the productivity problem of the 1970s?

Accepted Answer

A)  rapid growth in investment spending 
B)  a reduction in government regulation 
C)  low saving rates 
D)  an increase in research and development spending 
A)  rapid growth in investment spending 
B)  a reduction in government regulation 
C)  low saving rates 
D)  an increase in research and development spending

Question 9

The aggregate production function is Y = 3KL. If there are 30 units of capital and 40 units of labor, aggregate output is

Accepted Answer

A)  3,600 units. 
B)  2,500 units. 
C)  2,100 units. 
D)  400 units. 
A)  3,600 units. 
B)  2,500 units. 
C)  2,100 units. 
D)  400 units.

Question 10

For economic growth to increase living standards,

Accepted Answer

A)  society must discover ways of using available resources more efficiently. 
B)  the choices available to consumers must increase. 
C)  the rate of growth must exceed the rate of population increase. 
D)  society must acquire more resources. 
A)  society must discover ways of using available resources more efficiently. 
B)  the choices available to consumers must increase. 
C)  the rate of growth must exceed the rate of population increase. 
D)  society must acquire more resources.

Question 11

Convergence theory suggests that when less developed countries begin to develop, they typically have higher growth rates as they catch up with more developed nations.

Accepted Answer

A) True 
 B)False

Question 12

Zuliu Hu and Mohsin Khan have stated that the productivity gains in China over the 20 years following market reforms are, in large part, a result of market reforms from incorporating business into the public sector.

Accepted Answer

A) True 
 B)False

Question 13

Human capital increases with on-the-job training.

Accepted Answer

A) True 
 B)False

Question 14

As growth ________ and countries become ________, pollution ________.

Accepted Answer

A)  progresses; richer; tends to fall 
B)  progresses; richer; tends to rise 
C)  declines; poorer; tends to fall 
D)  stabilizes; self-sufficient; falls then rises 
A)  progresses; richer; tends to fall 
B)  progresses; richer; tends to rise 
C)  declines; poorer; tends to fall 
D)  stabilizes; self-sufficient; falls then rises

Question 15

Refer to the information provided in Table 16.1 below to answer the questions that follow.
Table 16.1
  
-Refer to Table 16.1. During Period 3, labor productivity is equal to

Accepted Answer

A)  0.3. 
B)  1.96. 
C)  3.36. 
D)  4.7. 
A)  0.3. 
B)  1.96. 
C)  3.36. 
D)  4.7.

Question 16

The aggregate production function is Y = 4K0.5L0.5. If there are 169 units of capital and 49 units of labor, aggregate output is

Accepted Answer

A)  308 units. 
B)  364 units. 
C)  455 units. 
D)  626 units. 
A)  308 units. 
B)  364 units. 
C)  455 units. 
D)  626 units.

Question 17

A firm used to produce a product using three units of labor and one unit of capital. The firm discovers that it can produce more output at a lower cost if it combines two units of labor with two units of capital. This is an example of

Accepted Answer

A)  an innovation. 
B)  an invention. 
C)  increasing returns. 
D)  economic growth. 
A)  an innovation. 
B)  an invention. 
C)  increasing returns. 
D)  economic growth.

Question 18

Related to the Economics in Practice on p. 304: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, what would be its best strategy?

Accepted Answer

A)  The government needs to keep helping its firms find the world frontier until the firms reach the frontier. 
B)  The government should begin by offering incentives and encourage some risk taking. 
C)  The government needs to help its firms find the world frontier, and then as firms approach the frontier, the government should offer incentives and encourage some risk taking. 
D)  The government should adopt a hands-off approach and let the private sector bring the country to the world frontier. 
A)  The government needs to keep helping its firms find the world frontier until the firms reach the frontier. 
B)  The government should begin by offering incentives and encourage some risk taking. 
C)  The government needs to help its firms find the world frontier, and then as firms approach the frontier, the government should offer incentives and encourage some risk taking. 
D)  The government should adopt a hands-off approach and let the private sector bring the country to the world frontier.

Question 19

Refer to the information provided in Figure 16.2 below to answer the questions that follow.   Figure 16.2
-Refer to Figure 16.2. Point ________ is beyond the production capacity of this economy.

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 20

Refer to the information provided in Table 16.2 below to answer the questions that follow.
Table 16.2
  
-Refer to Table 16.2. When moving from Period 1 to Period 4, labor productivity

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change. 
D)  first increases, then decreases. 
A)  increases. 
B)  decreases. 
C)  does not change. 
D)  first increases, then decreases.

Exam 16: Long-Run Growth

Economic decline will shift a society's production possibility frontier down and to the left.

If the capital stock ________ while the supply of labor ________, it is likely that the productivity of labor will fall.

Related to the Economics in Practice on p. 308: The emigration of Jewish scientists from Germany to the United States in the late 1930s and early 1940s may have increased patent rates in their fields of chemistry by

According to predictions made by the Club of Rome in 1972, the collapse of the world economy will occur because of

As growth progresses and countries become richer, pollution

Increased human capital is a source of

Refer to the information provided in Figure 16.1 below to answer the questions that follow. Figure 16.1 -Refer to Figure 16.1. Economic growth is represented by

Which of the following was one of the likely causes of the productivity problem of the 1970s?

The aggregate production function is Y = 3KL. If there are 30 units of capital and 40 units of labor, aggregate output is

For economic growth to increase living standards,

Convergence theory suggests that when less developed countries begin to develop, they typically have higher growth rates as they catch up with more developed nations.

Zuliu Hu and Mohsin Khan have stated that the productivity gains in China over the 20 years following market reforms are, in large part, a result of market reforms from incorporating business into the public sector.

Human capital increases with on-the-job training.

As growth ________ and countries become ________, pollution ________.

Refer to the information provided in Table 16.1 below to answer the questions that follow. Table 16.1 -Refer to Table 16.1. During Period 3, labor productivity is equal to

The aggregate production function is Y = 4K0.5L0.5. If there are 169 units of capital and 49 units of labor, aggregate output is

A firm used to produce a product using three units of labor and one unit of capital. The firm discovers that it can produce more output at a lower cost if it combines two units of labor with two units of capital. This is an example of

Related to the Economics in Practice on p. 304: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, what would be its best strategy?

Refer to the information provided in Figure 16.2 below to answer the questions that follow. Figure 16.2 -Refer to Figure 16.2. Point ________ is beyond the production capacity of this economy.

Refer to the information provided in Table 16.2 below to answer the questions that follow. Table 16.2 -Refer to Table 16.2. When moving from Period 1 to Period 4, labor productivity

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

If the capital stock while the supply of labor , it is likely that the productivity of labor will fall.

As growth and countries become , pollution .

The aggregate production function is Y = 4K^0.5L^0.5. If there are 169 units of capital and 49 units of labor, aggregate output is