Question 1

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) A) and D)
F) B) and C)

Question 2

Under the Soviet system of communism,

Accepted Answer

A)  managerial pay was determined by the extent to which managers could lower the per-unit costs of production.
B)  technological progress was slow because managers had little incentive to develop new technologies.
C)  competitive pressures in the Soviet Union allowed the country's technological progress to keep pace with the rest of the world.
D)  the per-worker production function in the Soviet Union shifted up more rapidly than production functions in other countries.E) None of the above
F) B) and D)

Question 3

According to the text,there are three ways the government can help increase the accumulation of knowledge capital.What are they?

Accepted Answer

A)  protecting intellectual property rights,subsidizing research and development,and subsidizing education
B)  increasing taxes on firms,eliminating patents,and increasing the minimum wage
C)  encouraging the use of trade secrets,expanding student loan programs,and increasing the minimum wage
D)  reducing taxes on capital,increasing Social Security payments,and lowering the exchange rateE) B) and D)
F) A) and D)

Question 4

One of the results of Paul Romer's new growth theory is that investment in research and development will be too low in an economy.Explain how he comes to this conclusion.

Accepted Answer

According to Romer,knowledge capital is ...

Question 5

Technological change is the key to sustaining economic growth.

Accepted Answer

A) True 
 B)False

Question 6

Developing countries with low saving rates and poor levels of health and education are likely to experience

Accepted Answer

A)  high levels of foreign direct investment.
B)  easy access to financial backing from banks.
C)  rapid growth in household incomes.
D)  low rates of growth in real GDP per capita.E) None of the above
F) All of the above

Question 7

Most economic growth in the world occurred between 1,000,000 B.C.and 1300 A.D.

Accepted Answer

A) True 
 B)False

Question 8

Use production functions from the economic growth model to explain why the United States grew at a much faster rate than the Soviet Union in the latter half of the 20th century.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> The Soviet Union's strategy to increase...

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Knowledge capital is

Accepted Answer

A)  rival.
B)  nonrival.
C)  nonexcludable.
D)  both B and CE) A) and B)
F) All of the above

Question 11

In 1973,the Club of Rome published a book titled The Limits to Growth,which predicted that economic growth would likely end in high-income countries because of

Accepted Answer

A)  declining populations.
B)  rapid increases in government debt.
C)  increases in outsourcing of the production of goods and services to low-income countries.
D)  increasing pollution and the depletion of natural resources.E) A) and C)
F) None of the above

Question 12

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 littleE) B) and D)
F) A) and B)

Question 13

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Accepted Answer

A)  knowledge;increasing returns to scale;firm
B)  physical;decreasing returns to scale;firm
C)  knowledge;decreasing returns to scale;economy
D)  knowledge;increasing returns to scale;economyE) C) and D)
F) A) and D)

Question 14

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A)  the seventeenth century.
B)  the eighteenth century.
C)  the nineteenth century.
D)  the twentieth century.E) C) and D)
F) B) and C)

Question 15

According to Nobel laureate Douglass North,one reason why the Industrial Revolution occurred in England before many other countries was because the king in England consistently maintained control over the court system and the government.

Accepted Answer

A) True 
 B)False

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) A) and B)
F) None of the above

Question 17

One drawback of the patent system is that firms must disclose to the public information about the product or process.

Accepted Answer

A) True 
 B)False

Question 18

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s,but eventually this growth slowed.Why did this occur?

Accepted Answer

A)  Capital per hour worked grew rapidly from 1950 to 1980,but technological change occurred very slowly.
B)  Capital per hour worked grew slowly,but technological change grew very rapidly.
C)  Increasing implementation of new technologies eventually suffered diminishing marginal returns.
D)  The centrally planned economy invested too heavily in technological change.E) A) and B)
F) All of the above

Question 19

All of the following policies are ways for a country to promote long-run economic growth except

Accepted Answer

A)  increasing vaccinations against infectious diseases.
B)  undergoing political reform to decrease corruption.
C)  enacting stronger laws to protect property rights.
D)  imposing stricter regulations to limit foreign direct investment.E) A) and B)
F) C) and D)

Question 20

GDP in a country grew from $10 billion to $14 billion over the span of 5 years.The average annual growth rate of GDP was

Accepted Answer

A)  4%.
B)  7%.
C)  10%.
D)  40%.E) A) and B)
F) A) and C)

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

Knowledge capital is

Correct AnswerverifiedShow Answer

Enforcing property rights in an economy will

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Growth in real GDP per capita for the world economy was greatest during

Correct AnswerverifiedShow Answer

Most economic growth in the world occurred between 1,000,000 B.C.and 1300 A.D.

Correct AnswerverifiedShow Answer

According to the text,there are three ways the government can help increase the accumulation of knowledge capital.What are they?

Correct AnswerverifiedShow Answer

Use production functions from the economic growth model to explain why the United States grew at a much faster rate than the Soviet Union in the latter half of the 20th century.

Correct Answerverified The Soviet Union's strategy to increase...View AnswerShow Answer

GDP in a country grew from $10 billion to $14 billion over the span of 5 years.The average annual growth rate of GDP was

Correct AnswerverifiedShow Answer

Technological change is the key to sustaining economic growth.

Correct AnswerverifiedShow Answer

New growth theory states that increases in ________ capital will result in ________ at the ________ level.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

One of the results of Paul Romer's new growth theory is that investment in research and development will be too low in an economy.Explain how he comes to this conclusion.

Correct AnswerverifiedAccording to Romer,knowledge capital is ...View AnswerShow Answer

All of the following policies are ways for a country to promote long-run economic growth except

Correct AnswerverifiedShow Answer

Developing countries with low saving rates and poor levels of health and education are likely to experience

Correct AnswerverifiedShow Answer

The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s,but eventually this growth slowed.Why did this occur?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In 1973,the Club of Rome published a book titled The Limits to Growth,which predicted that economic growth would likely end in high-income countries because of

Correct AnswerverifiedShow Answer

According to Nobel laureate Douglass North,one reason why the Industrial Revolution occurred in England before many other countries was because the king in England consistently maintained control over the court system and the government.

Correct AnswerverifiedShow 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.

Correct AnswerverifiedShow Answer

One drawback of the patent system is that firms must disclose to the public information about the product or process.

Correct AnswerverifiedShow Answer

Under the Soviet system of communism,

Correct AnswerverifiedShow Answer

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The Soviet Union's strategy to increase...
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New growth theory states that increases in capital will result in at the level.

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Correct Answer
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According to Romer,knowledge capital is ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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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.

Correct Answer
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Correct Answer
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Correct Answer
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