Question 1

Increased foreign direct investment in India has contributed to its recent economic growth.

Accepted Answer

A) True 
 B)False

Question 2

Table 22-6
 
-Refer to Table 22-6. Consider the statistics in the table above in describing the developing countries. Are these consistent with the economic growth model? Briefly explain.

Accepted Answer

The answer of Table 22-6
 
-Refer to Table 22-6. Consider...

Question 3

Figure 22-4 
-Refer to Figure 22-4. Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?

Accepted Answer

A)  E to B 
B)  B to D 
C)  B to E 
D)  A to B to C

Question 4

By offering more generous unemployment insurance programs, European countries can expect

Accepted Answer

A)  to pay less in taxes than in the United States. 
B)  workers to gain new skills quickly in response to fluctuations in the labor market. 
C)  shorter periods of unemployment for their workers. 
D)  longer periods of unemployment for their workers.

Question 5

Table 22-3
 
-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.

Question 6

Figure 22-3 
-Refer to Figure 22-3. 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.

Question 7

Knowledge capital is ________ in production and ________. As a result, firms ________ free ride.

Accepted Answer

A)  nonrival; nonexcludable; can 
B)  nonrival; excludable; can 
C)  rival; nonexcludable; cannot 
D)  nonrival; nonexcludable; cannot

Question 8

According to a study by economists Raymond Fisman and Edward Miguel, as the level of corruption in a country increases,

Accepted Answer

A)  so does the number of parking violations by the country's United Nations delegates. 
B)  so does the size of the country's population. 
C)  the levels of foreign direct investment and foreign portfolio investment decrease. 
D)  the levels of real GDP per capita and real income per capita increase.

Question 9

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.

Question 10

The opportunity cost of being unemployed tends to be the highest in which of the following countries?

Accepted Answer

A)  Canada 
B)  the United States 
C)  France 
D)  the United Kingdom

Question 11

For how long does a patent give a firm the exclusive legal right to a product?

Accepted Answer

A)  10 years 
B)  17 years 
C)  20 years 
D)  50 years

Question 12

Figure 22-1 
-Refer to Figure 22-1. Technological change is illustrated in the per-worker production function in the figure above by a movement from

Accepted Answer

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

Question 13

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.

Question 14

High-income countries have ________ and ________ as compared to developing countries.

Accepted Answer

A)  low rates of savings; high rates of growth 
B)  low rates of savings; low rates of growth 
C)  high rates of savings; high rates of growth 
D)  high rates of savings; low rates of growth

Question 15

The Industrial Revolution began in

Accepted Answer

A)  England around 1750. 
B)  the United States around 1820. 
C)  France around 1680. 
D)  Germany around 1780.

Question 16

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

Accepted Answer

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

Question 17

In a small Asian country, it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million. What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million, assuming no technological change and no change in the hours of work?

Accepted Answer

A)  GDP would increase further, but by less than $2 million. 
B)  GDP would increase further by exactly $2 million. 
C)  GDP would increase further by more than $2 million 
D)  GDP would increase further by exactly $8 million.

Question 18

Explain how advances in technology are critical to sustaining economic growth, even if capital per hour worked is consistently increasing. Provide a graph of a per-worker production function to support your answer.

Accepted Answer

The answer of Explain how advances in technology are critical...

Question 19

Robert Lucas argues that there are ________ returns to human capital, and these productivity increases are not completely captured by individuals as they decide how much education to purchase. As a result, the market produces ________ education and training.

Accepted Answer

A)  increasing; too much 
B)  decreasing; too much 
C)  increasing; too little 
D)  decreasing; too little

Question 20

The per-worker production function shows the relationship between ________ per hour worked and ________ per hour worked, holding ________ constant.

Accepted Answer

A)  labor; real GDP; technology 
B)  capital; real GDP; technology 
C)  labor; capital; real GDP 
D)  capital; labor; real GDP

Exam 22: Long-Run Economic Growth: Sources and Policies

Increased foreign direct investment in India has contributed to its recent economic growth.

Table 22-6 -Refer to Table 22-6. Consider the statistics in the table above in describing the developing countries. Are these consistent with the economic growth model? Briefly explain.

Figure 22-4 -Refer to Figure 22-4. Which of the following combinations of points illustrates changes in the Soviet Union's economy from 1950 to 1980?

By offering more generous unemployment insurance programs, European countries can expect

Table 22-3 -Growth in the United States from 1800 to 1900 can be characterized as

Figure 22-3 -Refer to Figure 22-3. Technological change is shown in the figure above by the movement from

Knowledge capital is in production and . As a result, firms free ride.

According to a study by economists Raymond Fisman and Edward Miguel, as the level of corruption in a country increases,

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

The opportunity cost of being unemployed tends to be the highest in which of the following countries?

For how long does a patent give a firm the exclusive legal right to a product?

Figure 22-1 -Refer to Figure 22-1. Technological change is illustrated in the per-worker production function in the figure above by a movement from

Technological improvements are more likely to occur if

High-income countries have and as compared to developing countries.

The Industrial Revolution began in

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

Explain how advances in technology are critical to sustaining economic growth, even if capital per hour worked is consistently increasing. Provide a graph of a per-worker production function to support your answer.

Robert Lucas argues that there are returns to human capital, and these productivity increases are not completely captured by individuals as they decide how much education to purchase. As a result, the market produces education and training.

The per-worker production function shows the relationship between per hour worked and per hour worked, holding constant.