Question 1

Foreign direct investment can provided needed capital for growth.

Accepted Answer

A) True 
 B)False  True

Question 2

Any investment made in a country by residents outside that country is

Accepted Answer

A)  foreign direct investment. 
B)  foreign exchange. 
C)  gross private domestic investment. 
D)  net exports. 
A)  foreign direct investment. 
B)  foreign exchange. 
C)  gross private domestic investment. 
D)  net exports. A

Question 3

A weakness in the Club of Rome's study entitled The Limits to Growth is that

Accepted Answer

A)  it assumed the rate of population growth would slow. 
B)  it did not account for technological change. 
C)  it assumed a constant demand for products. 
D)  it assumed a declining investment rate. 
A)  it assumed the rate of population growth would slow. 
B)  it did not account for technological change. 
C)  it assumed a constant demand for products. 
D)  it assumed a declining investment rate. B

Question 4

Refer to the information provided in Table 16.1 below to answer the questions that follow.
Table 16.1
  
-Refer to Table 16.1. When moving from Period 1 to Period 4, the marginal return to labor

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change. 
D)  first increases, then decreases. 
A)  increases. 
B)  decreases. 
C)  does not change. 
D)  first increases, then decreases.

Question 5

A(n) ________ in human capital ________ the productivity of labor.

Accepted Answer

A)  increase; increases 
B)  decrease; increases 
C)  increase; has no impact on 
D)  decrease; has no impact on 
A)  increase; increases 
B)  decrease; increases 
C)  increase; has no impact on 
D)  decrease; has no impact on

Question 6

Refer to the information provided in Table 16.2 below to answer the questions that follow.
Table 16.2
  
-Refer to Table 16.2. From Period 3 to Period 4, the marginal return to capital is equal to

Accepted Answer

A)  0.5. 
B)  2.0. 
C)  2.88. 
D)  3.21. 
A)  0.5. 
B)  2.0. 
C)  2.88. 
D)  3.21.

Question 7

Economic growth allows a society to consume

Accepted Answer

A)  more goods per person. 
B)  a higher quality of goods. 
C)  a wider variety of goods. 
D)  all of the above 
A)  more goods per person. 
B)  a higher quality of goods. 
C)  a wider variety of goods. 
D)  all of the above

Question 8

Expanding the production possibilities frontier occurs as a result of

Accepted Answer

A)  higher wages. 
B)  output growth. 
C)  a changing allocation of existing resources. 
D)  increased demand. 
A)  higher wages. 
B)  output growth. 
C)  a changing allocation of existing resources. 
D)  increased demand.

Question 9

An increase in human capital

Accepted Answer

A)  increases the productivity of labor. 
B)  decreases the productivity of labor. 
C)  increases the productivity of labor only if there is a corresponding technological change. 
D)  increases the capital-labor ratio. 
A)  increases the productivity of labor. 
B)  decreases the productivity of labor. 
C)  increases the productivity of labor only if there is a corresponding technological change. 
D)  increases the capital-labor ratio.

Question 10

Refer to the information provided in Figure 16.1 below to answer the questions that follow.   Figure 16.1
-Refer to Figure 16.1. A movement from Point D to Point C represents

Accepted Answer

A)  a decrease in capital stock. 
B)  economic growth. 
C)  economic decline. 
D)  a decrease in the labor force. 
A)  a decrease in capital stock. 
B)  economic growth. 
C)  economic decline. 
D)  a decrease in the labor force.

Question 11

Refer to the information provided in Table 16.2 below to answer the questions that follow.
Table 16.2
  
-Refer to Table 16.2. From Period 1 to Period 2, the marginal return to capital is equal to

Accepted Answer

A)  0.67. 
B)  1.5. 
C)  3.58. 
D)  4.0. 
A)  0.67. 
B)  1.5. 
C)  3.58. 
D)  4.0.

Question 12

An increase in the ratio of capital to labor ________ labor productivity.

Accepted Answer

A)  increases 
B)  decreases 
C)  will not change 
D)  has an ambiguous impact on 
A)  increases 
B)  decreases 
C)  will not change 
D)  has an ambiguous impact on

Question 13

Human capital increases with college education.

Accepted Answer

A) True 
 B)False

Question 14

The aggregate production function is Y = 5KL. If there are 18 units of capital and 50 units of labor, aggregate output is

Accepted Answer

A)  4,500 units. 
B)  4,270 units. 
C)  3,820 units. 
D)  340 units. 
A)  4,500 units. 
B)  4,270 units. 
C)  3,820 units. 
D)  340 units.

Question 15

With a fixed amount of capital, the total amount number of computers produced by 50 workers is 5,000. The average productivity of labor is

Accepted Answer

A)  0.01. 
B)  5. 
C)  100. 
D)  250. 
A)  0.01. 
B)  5. 
C)  100. 
D)  250.

Question 16

Innovation is the use of ________ to improve productivity and enhance economic growth.

Accepted Answer

A)  knowledge 
B)  physical capital 
C)  natural resources 
D)  an increased labor force 
A)  knowledge 
B)  physical capital 
C)  natural resources 
D)  an increased labor force

Question 17

A company uses 400 workers and 100 units of capital to produce 2,000 units of output. Its average labor productivity is

Accepted Answer

A)  25. 
B)  20. 
C)  5. 
D)  4. 
A)  25. 
B)  20. 
C)  5. 
D)  4.

Question 18

Refer to the information provided in Figure 16.1 below to answer the questions that follow.   Figure 16.1
-Refer to Figure 16.1. Which of the following cannot cause a movement from Point A to Point C?

Accepted Answer

A)  an expansionary monetary policy 
B)  technological progress 
C)  an increase in capital stock 
D)  an increase in the productivity of workers 
A)  an expansionary monetary policy 
B)  technological progress 
C)  an increase in capital stock 
D)  an increase in the productivity of workers

Question 19

Refer to the information provided in Figure 16.1 below to answer the questions that follow.   Figure 16.1
-Refer to Figure 16.1. Economic growth is represented by

Accepted Answer

A)  a movement from Point A to Point B along ppf1. 
B)  a movement from Point B to Point C. 
C)  a movement from Point B to Point A. 
D)  a shift in the production possibilities frontier from ppf2 to ppf1. 
A)  a movement from Point A to Point B along ppf1. 
B)  a movement from Point B to Point C. 
C)  a movement from Point B to Point A. 
D)  a shift in the production possibilities frontier from ppf2 to ppf1.

Question 20

An increase in the quality of capital is a result of

Accepted Answer

A)  population growth. 
B)  disembodied technical change. 
C)  embodied technical change. 
D)  an increase in the labor force. 
A)  population growth. 
B)  disembodied technical change. 
C)  embodied technical change. 
D)  an increase in the labor force.

Exam 16: Long-Run Growth

Foreign direct investment can provided needed capital for growth.

Any investment made in a country by residents outside that country is

A weakness in the Club of Rome's study entitled The Limits to Growth is that

Refer to the information provided in Table 16.1 below to answer the questions that follow. Table 16.1 -Refer to Table 16.1. When moving from Period 1 to Period 4, the marginal return to labor

A(n) ________ in human capital ________ the productivity of labor.

Refer to the information provided in Table 16.2 below to answer the questions that follow. Table 16.2 -Refer to Table 16.2. From Period 3 to Period 4, the marginal return to capital is equal to

Economic growth allows a society to consume

Expanding the production possibilities frontier occurs as a result of

An increase in human capital

Refer to the information provided in Figure 16.1 below to answer the questions that follow. Figure 16.1 -Refer to Figure 16.1. A movement from Point D to Point C represents

Refer to the information provided in Table 16.2 below to answer the questions that follow. Table 16.2 -Refer to Table 16.2. From Period 1 to Period 2, the marginal return to capital is equal to

An increase in the ratio of capital to labor ________ labor productivity.

Human capital increases with college education.

The aggregate production function is Y = 5KL. If there are 18 units of capital and 50 units of labor, aggregate output is

With a fixed amount of capital, the total amount number of computers produced by 50 workers is 5,000. The average productivity of labor is

Innovation is the use of ________ to improve productivity and enhance economic growth.

A company uses 400 workers and 100 units of capital to produce 2,000 units of output. Its average labor productivity is

Refer to the information provided in Figure 16.1 below to answer the questions that follow. Figure 16.1 -Refer to Figure 16.1. Which of the following cannot cause a movement from Point A to Point C?

Refer to the information provided in Figure 16.1 below to answer the questions that follow. Figure 16.1 -Refer to Figure 16.1. Economic growth is represented by

An increase in the quality of capital is a result of

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

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A(n) in human capital the productivity of labor.