Question 1

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

Accepted Answer

A) litigious. 
B) free riding. 
C) investing in knowledge capital. 
D) maintaining a level playing field. 
E) over investing in research and development.

Question 2

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. 
E) government activity.

Question 3

List four types of government policies that can aid economic growth.

Accepted Answer

The answer of List four types of government policies that...

Question 4

Which of the following is an example of foreign direct investment?

Accepted Answer

A) You purchase a plane ticket to China on WestJet. 
B) WestJet builds a hub in China. 
C) You buy a plane that was made in China. 
D) A stock broker from China sells you a Chinese government savings bond. 
E) A chinese person buys shares in Bombardier.

Question 5

Would you expect to see higher or lower growth rates for countries that start out with a relatively low level of real GDP per capita? Explain using the concept of "catch-up" and support your answer with a graph.

Accepted Answer

The answer of Would you expect to see higher or...

Question 6

In Canada, the annual growth rate of real GDP per person between 1995 and 2014 averaged

Accepted Answer

A) -1.0%. 
B) -0.3%. 
C) 1.7%. 
D) 2.8%. 
E) 3.6%.

Question 7

In 2014, South America had a lower average GDP per capita than any other continent.

Accepted Answer

A) True 
 B)False

Question 8

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. 
E) The growth model predicts that rich countries will experience ever faster economic growth and this is what we observe among higher-income industrialized countries.

Question 9

Table 7.4 
-Refer to Table 7.4.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) Guatemala and Botswana 
E) all four countries

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. 
E) decrease the opportunities for trade.

Question 11

Firms free ride on the research and development of other firms when they

Accepted Answer

A) buy a firm's newly developed product, and then give it away to consumers. 
B) use knowledge other firms have developed without paying for that knowledge. 
C) license a new technology from a firm that developed the new technology. 
D) choose a level of research and development that is inefficiently high. 
E) file a patent with the appropriate government.

Question 12

Which of the following countries had the highest GDP per capita in 2014?

Accepted Answer

A) Qatar 
B) Canada 
C) Japan 
D) Norway 
E) China

Question 13

The labour productivity slowdown in Canada in the 1970s was due to declining quality of education in, because no other industrialized country experienced the same labour productivity slowdown at the same time.

Accepted Answer

A) True 
 B)False

Question 14

The easiest way for a country to obtain access to technology is through

Accepted Answer

A) subsidizing education and training. 
B) promoting foreign direct investment. 
C) promoting policies to enhance saving. 
D) enacting policies to promote property rights. 
E) industrial espionage.

Question 15

Suggest two policies the federal government could pursue to help increase the accumulation of knowledge.

Accepted Answer

The answer of Suggest two policies the federal government could...

Question 16

If the slope of the per-worker production function is 1/2 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

Accepted Answer

A) Real GDP per hour worked will increase by $5,000. 
B) Real GDP per hour worked will increase by $20,000. 
C) Real GDP per hour worked will increase by $10,000. 
D) Real GDP per hour worked will decrease by $20,000. 
E) Real GDP per hour worked will increase by more than $20,000.

Question 17

According to the World Bank, in 2013 China's GDP was approximately $9.24 trillion (in U.S.dollars). That same year, India's GDP was approximately $3.88 trillion (also in U.S.dollars).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 = 1.4 billion; India's population = 1.3 billion 
B) China's population = 5.3 billion; India's population = 1.4 billion 
C) China's population = 500 million; India's population = 125 million 
D) China's population = 2.0 billion; India's population = 0.7 billion 
E) China's population = 1.2 billion; India's population = 1.4 billion

Question 18

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries.

Accepted Answer

A) True 
 B)False

Question 19

New growth theory

Accepted Answer

A) states that the rate of technological change is determined outside the working of the market system. 
B) does not adequately explain the factors that determine productivity. 
C) states that the rate of technological change is caused by economic incentives. 
D) states that the rate of technological change is unaffected by economic incentives. 
E) states that the rate of capital accumulation determines the rate of economic growth.

Question 20

Which of the following countries actually experienced negative economic growth from 1960 to 2011?

Accepted Answer

A) Israel 
B) Singapore 
C) Niger 
D) Malaysia 
E) Argentina

Exam 7: Long-Run Economic Growth: Sources and Policies

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

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

List four types of government policies that can aid economic growth.

Which of the following is an example of foreign direct investment?

Would you expect to see higher or lower growth rates for countries that start out with a relatively low level of real GDP per capita? Explain using the concept of "catch-up" and support your answer with a graph.

In Canada, the annual growth rate of real GDP per person between 1995 and 2014 averaged

In 2014, South America had a lower average GDP per capita than any other continent.

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

Table 7.4 -Refer to Table 7.4.In the table above, which countries are consistent with the predictions of the economic growth model?

Enforcing property rights in an economy will

Firms free ride on the research and development of other firms when they

Which of the following countries had the highest GDP per capita in 2014?

The labour productivity slowdown in Canada in the 1970s was due to declining quality of education in, because no other industrialized country experienced the same labour productivity slowdown at the same time.

The easiest way for a country to obtain access to technology is through

Suggest two policies the federal government could pursue to help increase the accumulation of knowledge.

If the slope of the per-worker production function is 1/2 in a given range, how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries.

New growth theory

Which of the following countries actually experienced negative economic growth from 1960 to 2011?