Exam 25: Long-Run Economic Growth

The table below shows aggregate values for a hypothetical economy.Suppose this economy has real GDP equal to potential output. TABLE 25-2 Refer to Table 25-2.What is the level of private saving for this economy?

Consider the long-run theory of investment,saving,and growth.An increase in the government budget surplus,everything else constant,will cause a(n)

According to the Neoclassical growth theory,sustained rising material living standards can only be explained by

Which of the following is a central assumption of the Neoclassical growth model?

Neoclassical growth theory is based on the assumption of ________ marginal returns to a single factor and ________ returns to scale exhibited by the aggregate production function.

The diagram below show the market for financial capital assuming that national income is constant at potential GDP,Y*. FIGURE 25-2 Refer to Figure 25-2.Suppose national saving is reflected by NS₀ and investment demand is reflected by I₀^D.Now suppose the government implements a revenue-neutral tax policy that encourages investment.What is the effect on the quantity of national saving?

The diagram below shows the market for financial capital in the long run when real GDP is equal to potential output,Y*. FIGURE 25-3 Refer to Figure 25-3.The equilibrium interest rate in this market is ________% and the equilibrium flow of investment and saving is ________ billion dollars.

The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1 Refer to Figure 25-1.Which of the following statements best describes what we know about the difference between the two economies at Year 0?

The table below shows aggregate values for a hypothetical economy.Suppose this economy has real GDP equal to potential output. TABLE 25-3 Refer to Table 25-3.What is the level of combined budget surpluses of all levels of government in this economy?

According to the Neoclassical growth model,which of the following scenarios (other things being equal)explains progressively smaller increases in per capita GDP?

Modern or "new" theories of long-run economic growth are based on the assumptions that technological change is mainly ________ to an economy and that investment yields ________ marginal returns.

What is the main reason that alleviation of poverty is more achievable in an economy that is growing?

According to the "new" theories of economic growth,increasing marginal returns to capital investment is

Long-run economic growth can help alleviate the problems of poverty by

A person who returns to school to improve her computer skills is an example of an increase in

Consider the Neoclassical growth model.Sustained economic growth in the long run could best be fostered by

According to the Neoclassical growth model,it is most likely that GDP would increase,but that average material living standards would fall,as a result of

The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1 Refer to Figure 25-1.Which of the following statements about Economies A and B is correct?

Consider the significant costs to the innovators and developers of 3D printing technology.Modern growth theory suggests that

The diagram below shows the market for financial capital in the long run when real GDP is equal to potential output,Y*. FIGURE 25-3 Refer to Figure 25-3.Suppose the interest rate in this market for financial capital is 2%.Which of the following statements correctly describes the adjustment that will occur in this market?