Question 1

Neoclassical growth theory predicts that economic growth is

Accepted Answer

A)  only temporary due to overpopulation. 
B)  the result of technological advances. 
C)  impossible due to extremes in weather. 
D)  caused by women entering the work force. 
E)  increased by decreasing labor productivity. 
A)  only temporary due to overpopulation. 
B)  the result of technological advances. 
C)  impossible due to extremes in weather. 
D)  caused by women entering the work force. 
E)  increased by decreasing labor productivity. B

Question 2

If the U.S.population grew at a 0.9 percent during 2006 and real GDP grew at a 4.4 percent during the same period, what was the growth rate of real GDP per person?

Accepted Answer

A)  3.5 percent 
B)  5.3 percent 
C)  4.0 percent 
D)  -3.5 percent 
E)  4.4 percent 
A)  3.5 percent 
B)  5.3 percent 
C)  4.0 percent 
D)  -3.5 percent 
E)  4.4 percent A

Question 3

In recent years, Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving, we expect i) increases in physical capital
Ii) increases in the inflation rate
Iii) advances in technology

Accepted Answer

A)  i and iii. 
B)  i and ii. 
C)  ii only. 
D)  ii and iii. 
E)  i, ii and iii. 
A)  i and iii. 
B)  i and ii. 
C)  ii only. 
D)  ii and iii. 
E)  i, ii and iii. A

Question 4

The presence of an incentive system that encourages growth

Accepted Answer

A)  guarantees that growth will occur. 
B)  creates the right conditions for growth to occur. 
C)  cannot exist in poor countries. 
D)  existed even in hunter-gatherer societies. 
E)  means that the government must be a democracy. 
A)  guarantees that growth will occur. 
B)  creates the right conditions for growth to occur. 
C)  cannot exist in poor countries. 
D)  existed even in hunter-gatherer societies. 
E)  means that the government must be a democracy.

Question 5

Activities that encourage faster growth are

Accepted Answer

A)  high levels of saving and investment in human capital. 
B)  high levels of consumption and low levels of savings. 
C)  taxes on saving that serve to encourage more spending and less saving. 
D)  imposing trade barriers to limit international trade and thereby protect national industries. 
E)  limiting property rights so that everyone can use any invention. 
A)  high levels of saving and investment in human capital. 
B)  high levels of consumption and low levels of savings. 
C)  taxes on saving that serve to encourage more spending and less saving. 
D)  imposing trade barriers to limit international trade and thereby protect national industries. 
E)  limiting property rights so that everyone can use any invention.

Question 6

The Malthusian theory

Accepted Answer

A)  is also called the classical growth theory and predicts that we will run out of resources. 
B)  is also called the neoclassical growth theory. 
C)  predicts that the real wage will continue to increase as long as technology increases. 
D)  claims that the subsistence wage will increase over time. 
E)  shows that the production function will shift upward continuously. 
A)  is also called the classical growth theory and predicts that we will run out of resources. 
B)  is also called the neoclassical growth theory. 
C)  predicts that the real wage will continue to increase as long as technology increases. 
D)  claims that the subsistence wage will increase over time. 
E)  shows that the production function will shift upward continuously.

Question 7

In the United States, there has been ________ in the quantity of labor and, as a benefit of economic growth, ________ in average hours per worker.

Accepted Answer

A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease 
E)  an increase; no change 
A)  an increase; an increase 
B)  an increase; a decrease 
C)  a decrease; an increase 
D)  a decrease; a decrease 
E)  an increase; no change

Question 8

Which of the following characteristics is a precondition for economic growth?
i. economic freedom.
ii. free markets
iii. active government policy to discourage saving

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  Both i and ii 
E)  Both ii and iii 
A)  i only 
B)  ii only 
C)  iii only 
D)  Both i and ii 
E)  Both ii and iii

Question 9

Which of the following statements is likely to be made by someone who believes in the new growth theory?

Accepted Answer

A)  Population growth will limit long-run gains in real GDP per person. 
B)  Competition will encourage discoveries of new ideas leading to greater economic growth. 
C)  Although technological changes increase real GDP, these changes are random and unexplainable. 
D)  Choices made by human capital are likely to be inefficient. 
E)  Economic growth will eventually slow. 
A)  Population growth will limit long-run gains in real GDP per person. 
B)  Competition will encourage discoveries of new ideas leading to greater economic growth. 
C)  Although technological changes increase real GDP, these changes are random and unexplainable. 
D)  Choices made by human capital are likely to be inefficient. 
E)  Economic growth will eventually slow.

Question 10

$$\begin{array} { l c c } 
& \begin{array} { c } 
\text { Real GDP } \
\text { Year }
\end{array} & \begin{array} { c } 
\text { Population } \
\text { (millions of 2005 dollars) } \
\text { (millions of people) }
\end{array} \
\hline \text { Year 1 } & 500 & 10 \
\text { Year 2 } & 550 & 11 \
\hline
\end{array}$$
-According to the data in the table above, real GDP per person grew at a rate of ________ between year 1 and year 2.

Accepted Answer

A)  10 percent 
B)  0 percent 
C)  1 percent 
D)  5 percent 
E)  50 percent 
A)  10 percent 
B)  0 percent 
C)  1 percent 
D)  5 percent 
E)  50 percent

Question 11

Economic freedom means that

Accepted Answer

A)  firms are regulated by the government. 
B)  some goods and services are free. 
C)  people are able to make personal choices and their property is protected. 
D)  the rule of law does not apply. 
E)  the nation's government is a democracy. 
A)  firms are regulated by the government. 
B)  some goods and services are free. 
C)  people are able to make personal choices and their property is protected. 
D)  the rule of law does not apply. 
E)  the nation's government is a democracy.

Question 12

The economic growth rate is expressed as the ________.

Accepted Answer

A)  annual percentage change of real GDP per person 
B)  growth rate of real GDP minus the growth rate of population 
C)  the standard of living 
D)  annual percentage change of real GDP 
E)  growth rate of the population 
A)  annual percentage change of real GDP per person 
B)  growth rate of real GDP minus the growth rate of population 
C)  the standard of living 
D)  annual percentage change of real GDP 
E)  growth rate of the population

Question 13

A measure of growth in the standard of living is the growth in

Accepted Answer

A)  real GDP. 
B)  population. 
C)  real GDP minus the growth in population. 
D)  population minus the growth in real GDP. 
E)  employment. 
A)  real GDP. 
B)  population. 
C)  real GDP minus the growth in population. 
D)  population minus the growth in real GDP. 
E)  employment.

Question 14

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is

Accepted Answer

A)  3 + 2.5 = 5.5 percent per year. 
B)  [(3 - 2.5) ÷ 2.5] × 100 = 20 percent per year. 
C)  [(2.5 - 3) ÷ 3] × 100 = 16.6 percent per year. 
D)  3 - 2.5 = 0.5 percent per year. 
E)  2.5 - 3 = -0.5 percent per year. 
A)  3 + 2.5 = 5.5 percent per year. 
B)  [(3 - 2.5) ÷ 2.5] × 100 = 20 percent per year. 
C)  [(2.5 - 3) ÷ 3] × 100 = 16.6 percent per year. 
D)  3 - 2.5 = 0.5 percent per year. 
E)  2.5 - 3 = -0.5 percent per year.

Question 15

Property rights protect

Accepted Answer

A)  only the rights to physical property. 
B)  only the rights to financial property. 
C)  all rights except rights to intellectual property. 
D)  rights to physical property, financial property, and intellectual property. 
E)  the government's right to impose taxes. 
A)  only the rights to physical property. 
B)  only the rights to financial property. 
C)  all rights except rights to intellectual property. 
D)  rights to physical property, financial property, and intellectual property. 
E)  the government's right to impose taxes.

Question 16

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because
a. the quantity of labor increases?
b. labor productivity increases?

Accepted Answer

a. An increase in real GDP because the q

Question 17

During 2008, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

Accepted Answer

A)  there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative. 
B)  the population growth rate was negative. 
C)  the population grew at a faster rate than real GDP. 
D)  poverty levels are declining. 
E)  real GDP grew more rapidly than did the population. 
A)  there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative. 
B)  the population growth rate was negative. 
C)  the population grew at a faster rate than real GDP. 
D)  poverty levels are declining. 
E)  real GDP grew more rapidly than did the population.

Question 18

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

Accepted Answer

A)  10 
B)  7 
C)  5 
D)  30 
E)  14 
A)  10 
B)  7 
C)  5 
D)  30 
E)  14

Question 19

What is the effect on real GDP per person if labor productivity increases?
 What is the effect on the nation's standard of living?

Accepted Answer

Real GDP equals (aggregate hours) × (lab

Question 20

A nation's annual growth rate of real GDP per person is 2 percent.Its standard of living will

Accepted Answer

A)  double in 35 years. 
B)  not change because its population is growing. 
C)  fall because of its population growth. 
D)  double in 10 years. 
E)  double in 50 years. 
A)  double in 35 years. 
B)  not change because its population is growing. 
C)  fall because of its population growth. 
D)  double in 10 years. 
E)  double in 50 years.

Neoclassical growth theory predicts that economic growth is

If the U.S.population grew at a 0.9 percent during 2006 and real GDP grew at a 4.4 percent during the same period, what was the growth rate of real GDP per person?

In recent years, Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving, we expect i) increases in physical capital Ii) increases in the inflation rate Iii) advances in technology

The presence of an incentive system that encourages growth

Activities that encourage faster growth are

The Malthusian theory

In the United States, there has been in the quantity of labor and, as a benefit of economic growth, in average hours per worker.

Which of the following characteristics is a precondition for economic growth? i. economic freedom. ii. free markets iii. active government policy to discourage saving

Which of the following statements is likely to be made by someone who believes in the new growth theory?

Real GDP Year Population (millions of 2005 dollars) (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP per person grew at a rate of ________ between year 1 and year 2.

Economic freedom means that

The economic growth rate is expressed as the ________.

A measure of growth in the standard of living is the growth in

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is

Property rights protect

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because a. the quantity of labor increases? b. labor productivity increases?

During 2008, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

A nation's annual growth rate of real GDP per person is 2 percent.Its standard of living will

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 9: Economic Growth

Neoclassical growth theory predicts that economic growth is

If the U.S.population grew at a 0.9 percent during 2006 and real GDP grew at a 4.4 percent during the same period, what was the growth rate of real GDP per person?

In recent years, Taiwan has experienced increases in savings and investment.As a result of the higher investment and saving, we expect i) increases in physical capital Ii) increases in the inflation rate Iii) advances in technology

The presence of an incentive system that encourages growth

Activities that encourage faster growth are

The Malthusian theory

In the United States, there has been ________ in the quantity of labor and, as a benefit of economic growth, ________ in average hours per worker.

Which of the following characteristics is a precondition for economic growth? i. economic freedom. ii. free markets iii. active government policy to discourage saving

Which of the following statements is likely to be made by someone who believes in the new growth theory?

Real GDP Year Population (millions of 2005 dollars) (millions of people) Year 1 500 10 Year 2 550 11 -According to the data in the table above, real GDP per person grew at a rate of ________ between year 1 and year 2.

Economic freedom means that

The economic growth rate is expressed as the ________.

A measure of growth in the standard of living is the growth in

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is

Property rights protect

Real GDP can increase either because the quantity of labor increases or because labor productivity increases.What is the effect on the standard of living if real GDP increases because a. the quantity of labor increases? b. labor productivity increases?

During 2008, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent.These rates indicate that in Swaziland

If Country A's real GDP grows at a rate of 14 percent per year, about how many years will it take for Country A's real GDP to double?

What is the effect on real GDP per person if labor productivity increases? What is the effect on the nation's standard of living?

A nation's annual growth rate of real GDP per person is 2 percent.Its standard of living will

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

In the United States, there has been in the quantity of labor and, as a benefit of economic growth, in average hours per worker.