Question 1

Malthus's predictions have proved to be true, and they explain why U.S. productivity growth slowed between the 1970s and the mid-1990s.

Accepted Answer

A) True 
 B)False

Question 2

It took India more than 40 years to exhibit high economic growth after it gained independence from British rule in 1947. This faster rate of growth resulted from:

Accepted Answer

A)  a more stable government. 
B)  better infrastructure. 
C)  higher investment in human capital. 
D)  a reduction in the burden of corruption.

Question 3

To find the approximate number of years it takes the economy to double:

Accepted Answer

A)  divide its growth rate by 70. 
B)  divide 70 by its growth rate. 
C)  divide its growth rate by 100. 
D)  multiply its growth rate by 20.

Question 4

Use the following to answer questions: 
-(Table: South Korea's Real GDP per Capita) Use Table: South Korea's Real GDP per Capita. As a percentage of real GDP per capita in 2000, approximately how much did South Korea produce in 1960?

Accepted Answer

A)  10% 
B)  15% 
C)  151% 
D)  1,011%

Question 5

Economists believe that the BEST way to stimulate investment in physical capital is to encourage:

Accepted Answer

A)  higher rates of investment in human capital. 
B)  more spending on infrastructure. 
C)  the conservation of natural resources. 
D)  higher rates of national saving.

Question 6

Having achieved sustained rapid growth, Chile is an exception to the disappointing slow economic growth among most other Latin American nations.

Accepted Answer

A) True 
 B)False

Question 7

The economy has grown by 4% per year over the past 30 years. During the same period, the labor force has grown by 1% per year and the quantity of physical capital has grown by 5% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.4%. Assume that human capital has not changed during the past 30 years. How fast has physical capital per worker grown?

Accepted Answer

A)  5% 
B)  4% 
C)  3% 
D)  2%

Question 8

Which country had the LOWEST growth rate of real GDP per capita between 1980 and 2015?

Accepted Answer

A)  Ireland 
B)  France 
C)  Argentina 
D)  Zimbabwe

Question 9

From 2010 to 2011, nation A's real GDP increased from $100 billion to $106 billion and its population grew from 50 million to 51 million. As a result, real GDP per capita _____ because real GDP rose _____ than the population.

Accepted Answer

A)  increased; more slowly 
B)  increased; faster 
C)  decreased; more slowly 
D)  decreased; faster

Question 10

Physical capital consists of man-made resources like machines and buildings.

Accepted Answer

A) True 
 B)False

Question 11

According to the text, productivity is NOT driven by:

Accepted Answer

A)  physical capital. 
B)  human capital. 
C)  technological progress. 
D)  natural resources.

Question 12

According to Thomas Malthus's work, which statement is TRUE?

Accepted Answer

A)  As population grows, so will output per worker. 
B)  The amount of capital per worker will fall. 
C)  Technology could be counted on to increase output per worker. 
D)  The amount of land per worker will eventually decline.

Question 13

Today, China is the fastest-growing major economy, and it also:

Accepted Answer

A)  spends a lower share of its GDP on investment goods than do other major economies. 
B)  spends a higher share of its GDP on investment goods than do other major economies. 
C)  spends more of its GDP on national defense than does any other country, except for North Korea. 
D)  was the first Asian country to join the European Union.

Question 14

Use the following to answer questions: 
-(Figure: Productivity) Use Figure: Productivity. An increase in physical capital per worker with everything else remaining unchanged is shown on the diagram as a movement from:

Accepted Answer

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

Question 15

According to the convergence hypothesis, the richest countries have the fastest growth rate of real GDP per capita.

Accepted Answer

A) True 
 B)False

Question 16

In 1820, Mexico had a higher real GDP per capita than did Japan. Yet now Japan is one of the richest countries in the world and Mexico is poor. Japan's high rate of economic growth can likely NOT be explained by a high:

Accepted Answer

A)  investment in physical capital. 
B)  investment in human capital. 
C)  investment in technological progress. 
D)  level of government interference.

Question 17

Which factor is NOT necessary for convergence between two countries?

Accepted Answer

A)  equal access to education 
B)  equal access to infrastructure 
C)  a common language between the two countries 
D)  similar levels of political stability

Question 18

More than 50% of the world's population lives in countries whose population is poorer than the United States population was a century ago.

Accepted Answer

A) True 
 B)False

Question 19

An increase in the amount of physical capital per worker _____, while technological progress _____.

Accepted Answer

A)  makes the aggregate production function steeper; changes the slope of the aggregate production function 
B)  makes the aggregate production function steeper; makes the aggregate production function flatter 
C)  moves the economy along the aggregate production function; shifts up the aggregate production function 
D)  shifts up the aggregate production function; moves the economy along the aggregate production function

Question 20

China has much higher rate of growth than the United States, but the average Chinese household is _____ a typical U.S. household. China's real GDP per capita is _____ that of the United States.

Accepted Answer

A)  as well off as; catching up with 
B)  richer than; much higher than 
C)  still a bit poorer than; catching up with 
D)  still far poorer than; much lower than

Exam 9: Long-Run Economic Growth

Malthus's predictions have proved to be true, and they explain why U.S. productivity growth slowed between the 1970s and the mid-1990s.

It took India more than 40 years to exhibit high economic growth after it gained independence from British rule in 1947. This faster rate of growth resulted from:

To find the approximate number of years it takes the economy to double:

Use the following to answer questions: -(Table: South Korea's Real GDP per Capita) Use Table: South Korea's Real GDP per Capita. As a percentage of real GDP per capita in 2000, approximately how much did South Korea produce in 1960?

Economists believe that the BEST way to stimulate investment in physical capital is to encourage:

Having achieved sustained rapid growth, Chile is an exception to the disappointing slow economic growth among most other Latin American nations.

Which country had the LOWEST growth rate of real GDP per capita between 1980 and 2015?

From 2010 to 2011, nation A's real GDP increased from $100 billion to $106 billion and its population grew from 50 million to 51 million. As a result, real GDP per capita _ because real GDP rose _ than the population.

Physical capital consists of man-made resources like machines and buildings.

According to the text, productivity is NOT driven by:

According to Thomas Malthus's work, which statement is TRUE?

Today, China is the fastest-growing major economy, and it also:

Use the following to answer questions: -(Figure: Productivity) Use Figure: Productivity. An increase in physical capital per worker with everything else remaining unchanged is shown on the diagram as a movement from:

According to the convergence hypothesis, the richest countries have the fastest growth rate of real GDP per capita.

In 1820, Mexico had a higher real GDP per capita than did Japan. Yet now Japan is one of the richest countries in the world and Mexico is poor. Japan's high rate of economic growth can likely NOT be explained by a high:

Which factor is NOT necessary for convergence between two countries?

More than 50% of the world's population lives in countries whose population is poorer than the United States population was a century ago.

An increase in the amount of physical capital per worker _, while technological progress _.

China has much higher rate of growth than the United States, but the average Chinese household is _ a typical U.S. household. China's real GDP per capita is _ that of the United States.