Question 1

It is impossible for a country to experience negative productivity growth.

Accepted Answer

A) True 
 B)False  False

Question 2

How does the theory of economic growth change when capital is added as a factor of production?

Accepted Answer

The major difference is that the amount of output per worker will be greater.

Question 3

Answer the questions below:
(A)Suppose a country has no growth in technology, the capital stock is growing at a rate of 4 percent per year, and the labor force is growing at a rate of 1 percent per year. What is the growth rate of real GDP per hour of work?
(B)Suppose a country has a capital stock that is growing at 1 percent, the labor force is growing at 4 percent, and the growth of real GDP per hour of work is 2 percent. What is the growth rate of technology? Which if the growth rate of real GDP?

Accepted Answer

(A)In this problem, it is helpful to use the rule that the growth rate of a ratio of two numbers is equal to the growth rate of the top number minus the growth rate of the bottom number. Therefore, the growth of capital per hour of work = growth capital - growth labor. Then, growth of real GDP per hour of work = (1/3)(4 - 1) = %. On the productivity graph, the curve will not shift, and there will be an upward movement along the curve.
(B)Growth rate of technology = 2 - (1/3)(1 - 4) = 3 percent. Growth rate of real GDP = 2 + 4 = 6 percent. On a productivity graph, the curve will shift up, and there will be a downward movement along the new curve. Productivity will be higher.

Question 4

Which of the following is true?

Accepted Answer

A)  Growth in capital alone explains virtually all of the recent growth in productivity. 
B)  Economic policies cannot influence the growth of productivity in the economy. 
C)  Increases in labor will increase real GDP per hour of work. 
D)  The growth of productivity is determined by the available labor, capital, and technology. 
E)  Increasing the investment share of GDP will increase the growth of capital. 
A)  Growth in capital alone explains virtually all of the recent growth in productivity. 
B)  Economic policies cannot influence the growth of productivity in the economy. 
C)  Increases in labor will increase real GDP per hour of work. 
D)  The growth of productivity is determined by the available labor, capital, and technology. 
E)  Increasing the investment share of GDP will increase the growth of capital.

Question 5

Equipping cars with a navigational system that uses global positioning systems is best described as an example of

Accepted Answer

A)  an invention. 
B)  innovation. 
C)  learning by doing. 
D)  diffusion. 
E)  specialization. 
A)  an invention. 
B)  innovation. 
C)  learning by doing. 
D)  diffusion. 
E)  specialization.

Question 6

The rationale for developing a model in which real GDP depends only on labor is

Accepted Answer

A)  to prove that productivity growth was higher before the Industrial Revolution. 
B)  to prove that capital and technology play a key role in productivity growth. 
C)  to prove that productivity growth can occur without capital. 
D)  to prove that productivity growth can occur without technology. 
E)  to prove that labor is a key source of productivity growth. 
A)  to prove that productivity growth was higher before the Industrial Revolution. 
B)  to prove that capital and technology play a key role in productivity growth. 
C)  to prove that productivity growth can occur without capital. 
D)  to prove that productivity growth can occur without technology. 
E)  to prove that labor is a key source of productivity growth.

Question 7

Which part of technological change best refers to how technology affects growth throughout the economy?

Accepted Answer

A)  The spread of the discovery of new knowledge 
B)  The spread of the application of new knowledge 
C)  The discovery of new knowledge 
D)  The accumulation of scientific knowledge 
E)  The application of new knowledge 
A)  The spread of the discovery of new knowledge 
B)  The spread of the application of new knowledge 
C)  The discovery of new knowledge 
D)  The accumulation of scientific knowledge 
E)  The application of new knowledge

Question 8

As more capital is added per worker, the production function

Accepted Answer

A)  shifts down in smaller increments. 
B)  gets flatter. 
C)  shifts up in smaller increments. 
D)  gets steeper. 
E)  shifts up in larger increments. 
A)  shifts down in smaller increments. 
B)  gets flatter. 
C)  shifts up in smaller increments. 
D)  gets steeper. 
E)  shifts up in larger increments.

Question 9

Which of the following is true?

Accepted Answer

A)  Economic growth began to accelerate during the Industrial Revolution. 
B)  There has always been economic growth. 
C)  Economic growth rates were highest during the Industrial Revolution. 
D)  All of these 
E)  The best measure of economic growth is the growth rate of output. 
A)  Economic growth began to accelerate during the Industrial Revolution. 
B)  There has always been economic growth. 
C)  Economic growth rates were highest during the Industrial Revolution. 
D)  All of these 
E)  The best measure of economic growth is the growth rate of output.

Question 10

Productivity is defined as

Accepted Answer

A)  output per person. 
B)  output per unit of capital. 
C)  output per unit of technology. 
D)  output per hour of work. 
E)  output per unit of full-time employment. 
A)  output per person. 
B)  output per unit of capital. 
C)  output per unit of technology. 
D)  output per hour of work. 
E)  output per unit of full-time employment.

Question 11

The rate of technological growth remained low in the 1990s.

Accepted Answer

A) True 
 B)False

Question 12

Suppose that the capital stock grows more slowly than the labor force and there is no technological growth. This would cause

Accepted Answer

A)  a downward shift of the productivity curve and a downward movement along the productivity curve. 
B)  an upward movement along the productivity curve. 
C)  a downward shift of the productivity curve. 
D)  a downward movement along the productivity curve. 
E)  an upward shift of the productivity curve. 
A)  a downward shift of the productivity curve and a downward movement along the productivity curve. 
B)  an upward movement along the productivity curve. 
C)  a downward shift of the productivity curve. 
D)  a downward movement along the productivity curve. 
E)  an upward shift of the productivity curve.

Question 13

The situation in which workers become more proficient by doing a particular task many times is known by economists as

Accepted Answer

A)  learning by doing. 
B)  marginal productivity gains. 
C)  repetitive human capital. 
D)  revolving learning. 
E)  None of these 
A)  learning by doing. 
B)  marginal productivity gains. 
C)  repetitive human capital. 
D)  revolving learning. 
E)  None of these

Question 14

Which of the following is the best example of a disembodied technological change?

Accepted Answer

A)  A company that replaces workers with robots 
B)  A local bagel bakery deciding to use the Thompson bagel machine 
C)  Learning by doing 
D)  A mortgage company using a new computer program to determine whether an applicant qualifies for a loan 
E)  A firm that replaces labor with capital 
A)  A company that replaces workers with robots 
B)  A local bagel bakery deciding to use the Thompson bagel machine 
C)  Learning by doing 
D)  A mortgage company using a new computer program to determine whether an applicant qualifies for a loan 
E)  A firm that replaces labor with capital

Question 15

If copyright laws were made tougher and were more strictly enforced, companies would be encouraged to

Accepted Answer

A)  purchase more plants and equipment. 
B)  hire more labor. 
C)  engage in more R&D activity. 
D)  hire less labor. 
E)  None of these 
A)  purchase more plants and equipment. 
B)  hire more labor. 
C)  engage in more R&D activity. 
D)  hire less labor. 
E)  None of these

Question 16

Which of the following best describes what occurs when time and resources are allocated to educate and train the labor force?

Accepted Answer

A)  Human capital is produced. 
B)  Increased specialization is enabled. 
C)  Firms will be reorganized. 
D)  There will be more inventions. 
E)  There is learning by doing. 
A)  Human capital is produced. 
B)  Increased specialization is enabled. 
C)  Firms will be reorganized. 
D)  There will be more inventions. 
E)  There is learning by doing.

Question 17

An engineering company has developed a gadget to help families control the amount of time their children watch TV. What would be an example of a technological spillover in this case? Technological reasons aside, how could this engineering company prevent this kind of technological spillover from occurring?

Accepted Answer

A similar type of gadget could be used t

Question 18

According to economist Daron Acemoglu, nature can never be a fundamental cause of economic growth.

Accepted Answer

A) True 
 B)False

Question 19

According to Paul Krugman, distinguished economics columnist for the New York Times, which of the following is the most important issue facing the economy today?

Accepted Answer

A)  Slow productivity growth 
B)  Foreign competition 
C)  Lagging technology 
D)  The inappropriate industrial base 
E)  Deteriorating infrastructure 
A)  Slow productivity growth 
B)  Foreign competition 
C)  Lagging technology 
D)  The inappropriate industrial base 
E)  Deteriorating infrastructure

Question 20

Public radio is an example of a good that is

Accepted Answer

A)  rivalrous and excludable. 
B)  nonrivalrous and excludable. 
C)  rivalrous and nonexcludable. 
D)  nonrivalrous and nonexcludable. 
E)  neither rivalrous nor nonrivalrous. 
A)  rivalrous and excludable. 
B)  nonrivalrous and excludable. 
C)  rivalrous and nonexcludable. 
D)  nonrivalrous and nonexcludable. 
E)  neither rivalrous nor nonrivalrous.

Exam 9: Productivity and Economic Growth

It is impossible for a country to experience negative productivity growth.

How does the theory of economic growth change when capital is added as a factor of production?

Which of the following is true?

Equipping cars with a navigational system that uses global positioning systems is best described as an example of

The rationale for developing a model in which real GDP depends only on labor is

Which part of technological change best refers to how technology affects growth throughout the economy?

As more capital is added per worker, the production function

Which of the following is true?

Productivity is defined as

The rate of technological growth remained low in the 1990s.

Suppose that the capital stock grows more slowly than the labor force and there is no technological growth. This would cause

The situation in which workers become more proficient by doing a particular task many times is known by economists as

Which of the following is the best example of a disembodied technological change?

If copyright laws were made tougher and were more strictly enforced, companies would be encouraged to

Which of the following best describes what occurs when time and resources are allocated to educate and train the labor force?

According to economist Daron Acemoglu, nature can never be a fundamental cause of economic growth.

According to Paul Krugman, distinguished economics columnist for the New York Times, which of the following is the most important issue facing the economy today?

Public radio is an example of a good that is

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Money and Inflation

The Nature and Causes of Economic Fluctuations

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Capital and Financial Markets

Economic Growth and Globalization

International Trade

International Finance

Reading, Understanding, and Creating Graphs

the Miracle of Compound Growth

Present Discounted Value

Deriving the Growth Accounting Formula

Filters