Question 1

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Accepted Answer

A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population. 
A) The country's standard of living is falling. 
B) The country's standard of living is rising. 
C) Growth in nominal GDP outweighs growth in the population. 
D) Growth in nominal GDP is less than the growth in the population.

Question 2

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should ________ the equilibrium level of loanable funds and ________ the rate of long-term growth.

Accepted Answer

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

Question 3

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 4

How do government policies that enforce property rights affect economic growth?

Accepted Answer

Without enforceable property rights,entr

Question 5

Creative destruction means that

Accepted Answer

A) firms develop new products that replace old products in the economy,thereby encouraging economic growth. 
B) economic growth can only be sustained if capital depreciates rapidly. 
C) knowledge capital can be created through a system of government subsidies for education and research and development. 
D) research and development should only be financed if research and development is incremental (a result of making small changes to existing products). 
A) firms develop new products that replace old products in the economy,thereby encouraging economic growth. 
B) economic growth can only be sustained if capital depreciates rapidly. 
C) knowledge capital can be created through a system of government subsidies for education and research and development. 
D) research and development should only be financed if research and development is incremental (a result of making small changes to existing products).

Question 6

Table 11-2
  
-Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

Accepted Answer

GDP per capita = GDP / Population.
GDP p

Question 7

According to the World Bank,in 2006,China's GDP was approximately $2.7 trillion (or $2,700 billion).That same year,India's GDP was approximately $906.3 billion.With which of the following populations would China's standard of living have been considered higher than India's that year?

Accepted Answer

A) China's population = 1.3 billion;India's population = 1.1 billion 
B) China's population = 8.3 billion;India's population = 1.1 billion 
C) China's population = 500 million;India's population = 125 million 
D) China's population = 3.5 billion;India's population = 1.1 billion 
A) China's population = 1.3 billion;India's population = 1.1 billion 
B) China's population = 8.3 billion;India's population = 1.1 billion 
C) China's population = 500 million;India's population = 125 million 
D) China's population = 3.5 billion;India's population = 1.1 billion

Question 8

Technological change will

Accepted Answer

A) shift the per-worker production function up. 
B) shift the per-worker production function down. 
C) move the economy to a point beneath the per-worker production function. 
D) move the economy along a given per-worker production function. 
A) shift the per-worker production function up. 
B) shift the per-worker production function down. 
C) move the economy to a point beneath the per-worker production function. 
D) move the economy along a given per-worker production function.

Question 9

Of all industrialized nations,real GDP per capita was the highest in Japan in 2014.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Table 11-3
  
-Refer to Table 11-3.Use the table above to calculate the annual growth rate in GDP.Also calculate the total percentage change in the growth from 2013 through 2016.Explain the difference between the average annual growth rate in real per capita GDP from 2013 through 2016 and the total percentage change in growth from 2013 and 2016.

Accepted Answer

One calculates the average annual percen

Question 12

When firms benefit from the results of research and development they didn't pay for,we say firms

Accepted Answer

A) are litigious. 
B) free ride. 
C) invest in knowledge capital. 
D) maintain a level playing field. 
A) are litigious. 
B) free ride. 
C) invest in knowledge capital. 
D) maintain a level playing field.

Question 13

Because firms can free ride on the research and development of other firms,

Accepted Answer

A) firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B) firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C) firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D) firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research. 
A) firms choose a level of research and development where the marginal cost of research is equal to the economy's marginal return of research. 
B) firms choose a level of research and development where the marginal cost of research is above the economy's marginal return of research. 
C) firms choose a level of research and development where the marginal cost of research is below the economy's marginal return of research. 
D) firms choose a level of research and development where the marginal cost of research is below the individual firm's marginal return of research.

Question 14

According to Joseph Schumpeter,which of the factors of production is central to economic growth?

Accepted Answer

A) land 
B) labor 
C) natural resources 
D) the entrepreneur 
A) land 
B) labor 
C) natural resources 
D) the entrepreneur

Question 15

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 16

Between 1990 and 2014,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

Accepted Answer

A) the United States 
B) Germany 
C) Japan 
D) Canada 
A) the United States 
B) Germany 
C) Japan 
D) Canada

Question 17

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

Accepted Answer

A) Even when entrepreneurs cannot secure sufficient funding for projects from banks,venture capital firms may be willing to lend money. 
B) The level of legal protection for investors in the United States is relatively low. 
C) Because the financial market in the United States is so large,the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D) Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults. 
A) Even when entrepreneurs cannot secure sufficient funding for projects from banks,venture capital firms may be willing to lend money. 
B) The level of legal protection for investors in the United States is relatively low. 
C) Because the financial market in the United States is so large,the quantity of trading in corporate stocks and bonds makes those investments less liquid. 
D) Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults.

Question 18

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 19

Which of the following policies is designed specifically to directly promote technological change in an economy?

Accepted Answer

A) government subsidization of research and development 
B) tax incentives to promote investment in 401K plans 
C) laws to strengthen property rights 
D) a vaccination program to combat infectious diseases 
A) government subsidization of research and development 
B) tax incentives to promote investment in 401K plans 
C) laws to strengthen property rights 
D) a vaccination program to combat infectious diseases

Question 20

Figure 11-4  
-Refer to Figure 11-4.The movement from E to B to D in the figure above illustrates

Accepted Answer

A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labor. 
A) an improvement in technology. 
B) a decline in capital per worker. 
C) diminishing returns to capital. 
D) diminishing returns to labor.

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should the equilibrium level of loanable funds and the rate of long-term growth.

An economic growth model explains

How do government policies that enforce property rights affect economic growth?

Creative destruction means that

Table 11-2 -Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

According to the World Bank,in 2006,China's GDP was approximately $2.7 trillion (or $2,700 billion).That same year,India's GDP was approximately $906.3 billion.With which of the following populations would China's standard of living have been considered higher than India's that year?

Technological change will

Of all industrialized nations,real GDP per capita was the highest in Japan in 2014.

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

When firms benefit from the results of research and development they didn't pay for,we say firms

Because firms can free ride on the research and development of other firms,

According to Joseph Schumpeter,which of the factors of production is central to economic growth?

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

Between 1990 and 2014,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

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

Which of the following policies is designed specifically to directly promote technological change in an economy?

Figure 11-4 -Refer to Figure 11-4.The movement from E to B to D in the figure above illustrates

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

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

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should ________ the equilibrium level of loanable funds and ________ the rate of long-term growth.

An economic growth model explains

How do government policies that enforce property rights affect economic growth?

Creative destruction means that

Table 11-2 -Refer to Table 11-2.Calculate the GDP per capita for each country in the table.Which country has the highest standard of living? Why?

According to the World Bank,in 2006,China's GDP was approximately $2.7 trillion (or $2,700 billion).That same year,India's GDP was approximately $906.3 billion.With which of the following populations would China's standard of living have been considered higher than India's that year?

Technological change will

Of all industrialized nations,real GDP per capita was the highest in Japan in 2014.

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

When firms benefit from the results of research and development they didn't pay for,we say firms

Because firms can free ride on the research and development of other firms,

According to Joseph Schumpeter,which of the factors of production is central to economic growth?

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

Between 1990 and 2014,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

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

Which of the following policies is designed specifically to directly promote technological change in an economy?

Figure 11-4 -Refer to Figure 11-4.The movement from E to B to D in the figure above illustrates

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

A policy that offers parents a tax reduction based on how much they are saving for their children's college education should the equilibrium level of loanable funds and the rate of long-term growth.