Question 1

Growth in the United States from 1800 to 1900 can be characterized as

Accepted Answer

A) positive and increasing. 
B) positive and flat. 
C) positive and decreasing. 
D) negative. 
A) positive and increasing. 
B) positive and flat. 
C) positive and decreasing. 
D) negative.

Question 2

Which of the following is not an explanation for the revival in the growth of productivity starting in the mid-1990s?

Accepted Answer

A) Information and communication innovations are increasingly geared toward improving business processes and not consumer products. 
B) Faster computers have sped up data processing. 
C) Internet use has increased the efficiency of how firms buy and sell to each other and to consumers. 
D) Cell phones and wireless Internet access have increased worker flexibility. 
A) Information and communication innovations are increasingly geared toward improving business processes and not consumer products. 
B) Faster computers have sped up data processing. 
C) Internet use has increased the efficiency of how firms buy and sell to each other and to consumers. 
D) Cell phones and wireless Internet access have increased worker flexibility.

Question 3

Your friend owns a snow cone stand that he works by himself.He produces about 25 snow cones per hour.He wants to be able to produce twice as many snow cones per hour so he buys a second machine.He notices that he can only produce 10 more snow cones an hour.He jokes that he could have doubled his output with the second machine if he only had four hands.Using your knowledge of the production process,explain to your friend what you think has happened when he added more capital to his production process.

Accepted Answer

The second machine does not add as much

Question 4

Figure 11-2  
-Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2012 and 2016,we would expect to see

Accepted Answer

A) real GDP per hour worked will increase by the same increment each year between 2012 and 2016. 
B) real GDP per hour worked will be lower in 2016 than it was in 2012. 
C) the per-worker production function will get flatter over time. 
D) the per-worker production function will shift up every year there is increase in capital per hour worked. 
A) real GDP per hour worked will increase by the same increment each year between 2012 and 2016. 
B) real GDP per hour worked will be lower in 2016 than it was in 2012. 
C) the per-worker production function will get flatter over time. 
D) the per-worker production function will shift up every year there is increase in capital per hour worked.

Question 5

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

Accepted Answer

A) reducing physical capital. 
B) reducing human capital. 
C) increasing labor productivity. 
D) increasing technological change. 
A) reducing physical capital. 
B) reducing human capital. 
C) increasing labor productivity. 
D) increasing technological change.

Question 6

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 7

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C.and 1300 A.D.?

Accepted Answer

A) Standards of living in 1300 A.D.were substantially better than what they were in 1,000,000 B.C. 
B) Standards of living substantially declined from 1,000,000 B.C.to 1300 A.D. 
C) Significant economic growth took place between 1,000,000 B.C.and 1300 A.D. 
D) No sustained economic growth occurred between 1,000,000 B.C.and 1300 A.D. 
A) Standards of living in 1300 A.D.were substantially better than what they were in 1,000,000 B.C. 
B) Standards of living substantially declined from 1,000,000 B.C.to 1300 A.D. 
C) Significant economic growth took place between 1,000,000 B.C.and 1300 A.D. 
D) No sustained economic growth occurred between 1,000,000 B.C.and 1300 A.D.

Question 8

According to new growth theory,

Accepted Answer

A) technological change is influenced by economic incentives. 
B) centrally-planned economies are the most efficient. 
C) growth in real GDP per capita occurs only if there are increasing returns. 
D) economic growth is determined by forces outside the control of the market system. 
A) technological change is influenced by economic incentives. 
B) centrally-planned economies are the most efficient. 
C) growth in real GDP per capita occurs only if there are increasing returns. 
D) economic growth is determined by forces outside the control of the market system.

Question 9

Figure 11-1  
-Refer to Figure 11-1.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 10

How do economic growth rates affect a nation's standard of living?

Accepted Answer

The speed at which an economy grows dete

Question 11

Technological improvements are more likely to occur if

Accepted Answer

A) the economy is centrally planned. 
B) entrepreneurs are compensated with higher profits for taking risks. 
C) economic decisions are made by politicians rather than entrepreneurs. 
D) companies face little competition in their markets. 
A) the economy is centrally planned. 
B) entrepreneurs are compensated with higher profits for taking risks. 
C) economic decisions are made by politicians rather than entrepreneurs. 
D) companies face little competition in their markets.

Question 12

One of the primary reasons that Mexico has experienced relatively low rates of economic growth is that for Mexican entrepreneurs,

Accepted Answer

A) there is a shortage of low-skilled labor to fill manufacturing jobs. 
B) the government has a history of nationalizing all successful domestically-owned industries. 
C) problems in the banking system have made it difficult to obtain the funding needed to finance expansion. 
D) incentives from its neighboring Central American countries has attracted most of the foreign investment in the region. 
A) there is a shortage of low-skilled labor to fill manufacturing jobs. 
B) the government has a history of nationalizing all successful domestically-owned industries. 
C) problems in the banking system have made it difficult to obtain the funding needed to finance expansion. 
D) incentives from its neighboring Central American countries has attracted most of the foreign investment in the region.

Question 13

Table 11-4
  
-Refer to Table 11-4.In the table above,which countries are consistent with the predictions of the economic growth model?

Accepted Answer

A) Botswana and Thailand 
B) Japan and Guatemala 
C) only Japan 
D) all four countries 
A) Botswana and Thailand 
B) Japan and Guatemala 
C) only Japan 
D) all four countries

Question 14

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 15

Figure 11-3  
-Refer to Figure 11-3.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 16

Figure 11-4  
-Refer to Figure 11-4.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) E to B to D. 
C) C to B to A. 
D) D to B to E. 
A) A to B to C. 
B) E to B to D. 
C) C to B to A. 
D) D to B to E.

Question 17

Small differences in economic growth rates result in small differences in living standards.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Over the last three decades in the United States,services have become a smaller fraction of GDP relative to goods.

Accepted Answer

A) True 
 B)False

Question 20

Which factors explain labor productivity?

Accepted Answer

A) technological change;the quantity of labor per hour worked 
B) diminishing returns;the quantity of labor per hour worked 
C) diminishing returns;the quantity of capital per hour worked 
D) technological change;the quantity of capital per hour worked 
A) technological change;the quantity of labor per hour worked 
B) diminishing returns;the quantity of labor per hour worked 
C) diminishing returns;the quantity of capital per hour worked 
D) technological change;the quantity of capital per hour worked

Growth in the United States from 1800 to 1900 can be characterized as

Which of the following is not an explanation for the revival in the growth of productivity starting in the mid-1990s?

Figure 11-2 -Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2012 and 2016,we would expect to see

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

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

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C.and 1300 A.D.?

According to new growth theory,

Figure 11-1 -Refer to Figure 11-1.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

How do economic growth rates affect a nation's standard of living?

Technological improvements are more likely to occur if

One of the primary reasons that Mexico has experienced relatively low rates of economic growth is that for Mexican entrepreneurs,

Table 11-4 -Refer to Table 11-4.In the table above,which countries are consistent with the predictions of the economic growth model?

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?

Figure 11-3 -Refer to Figure 11-3.Technological change is shown in the figure above by the movement from

Figure 11-4 -Refer to Figure 11-4.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

Small differences in economic growth rates result in small differences in living standards.

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

Over the last three decades in the United States,services have become a smaller fraction of GDP relative to goods.

Which factors explain labor productivity?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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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Exam 11: Long-Run Economic Growth: Sources and Policies

Growth in the United States from 1800 to 1900 can be characterized as

Which of the following is not an explanation for the revival in the growth of productivity starting in the mid-1990s?

Figure 11-2 -Refer to Figure 11-2.Assuming no technological change,if the United States increases capital per hour worked by $40,000 every year between 2012 and 2016,we would expect to see

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

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

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C.and 1300 A.D.?

According to new growth theory,

Figure 11-1 -Refer to Figure 11-1.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

How do economic growth rates affect a nation's standard of living?

Technological improvements are more likely to occur if

One of the primary reasons that Mexico has experienced relatively low rates of economic growth is that for Mexican entrepreneurs,

Table 11-4 -Refer to Table 11-4.In the table above,which countries are consistent with the predictions of the economic growth model?

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?

Figure 11-3 -Refer to Figure 11-3.Technological change is shown in the figure above by the movement from

Figure 11-4 -Refer to Figure 11-4.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

Small differences in economic growth rates result in small differences in living standards.

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

Over the last three decades in the United States,services have become a smaller fraction of GDP relative to goods.

Which factors explain labor productivity?

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

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

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