Question 1

Foreign direct investment occurs when a Chinese corporation

Accepted Answer

A) purchases stock issued in China. 
B) opens a new Chinese factory. 
C) purchases 1,000 shares of stock issued by an American company. 
D) opens a new factory in France.

Question 2

In a small European country,it is estimated that changing the level of capital from $8 million to $10 million will increase real GDP from $2 million to $3 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $12 million,assuming no technological change and no change in the hours of work?

Accepted Answer

A) GDP would increase further,but by less than $1 million. 
B) GDP would increase further by exactly $1 million. 
C) GDP would increase further by more than $1 million 
D) GDP would increase further by exactly $4 million.

Question 3

Because of the productivity slowdown in the United States from the mid-1970s through the mid-1990s,

Accepted Answer

A) real GDP per capita grew more rapidly. 
B) real GDP per capita grew more slowly. 
C) the standard of living did not change. 
D) the standard of living increased in the United States.

Question 4

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Accepted Answer

A) $8,520 
B) $9,280 
C) $9,365 
D) $10,560

Question 5

Globalization is positively associated with

Accepted Answer

A) poverty. 
B) declining rates of investment. 
C) declining standards of living. 
D) economic growth.

Question 6

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 7

In a small Asian country,it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million.What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million,assuming no technological change and no change in the hours of work?

Accepted Answer

A) GDP would increase further,but by less than $2 million. 
B) GDP would increase further by exactly $2 million. 
C) GDP would increase further by more than $2 million 
D) GDP would increase further by exactly $8 million.

Question 8

Explain how market economies are generally better able to achieve technological progress than are centrally planned economies.

Accepted Answer

The answer of Explain how market economies are generally better...

Question 9

By offering more generous unemployment insurance programs,European countries can expect

Accepted Answer

A) to pay less in taxes than in the United States. 
B) workers to gain new skills quickly in response to fluctuations in the labor market. 
C) shorter periods of unemployment for their workers. 
D) longer periods of unemployment for their workers.

Question 10

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

Accepted Answer

A) there are decreases in human capital. 
B) the per-worker production function shifts downward. 
C) there continue to be decreases in capital per hour worked. 
D) there is technological change.

Question 11

In 2014,GDP per capita was ________ in the United States than in China,and since 1980,the growth rate of real GDP per capita has been ________ in the United States than in China.

Accepted Answer

A) higher;higher 
B) higher;lower 
C) lower;higher 
D) lower;lower

Question 12

Which of the following accurately describes growth rates in the United States from 1900 to the present?

Accepted Answer

A) Growth rates rose until the 1970s and then fell until the present. 
B) Growth rates have risen continuously from 1900 to the present. 
C) Growth rates rose until the 1970s,slowed until the 1990s,rose again until 2005,and then slowed again to the present. 
D) Growth rates have fallen continuously from 1900 to the present.

Question 13

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

Accepted Answer

The answer of Explain how advances in technology are critical...

Question 14

The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s occurred in all high-income countries.

Accepted Answer

A) True 
 B)False

Question 15

Figure 11-2 
-Refer to Figure 11-2.Based on the per-worker production function above,if the economy raises capital per hour worked from $35,000 to $40,000,by how much will real GDP per hour worked increase?

Accepted Answer

A) $150 
B) $1,850 
C) $2,000 
D) $5,000

Question 16

Which of the following government provisions would help increase the accumulation of knowledge capital?

Accepted Answer

A) patents 
B) copyrights 
C) education subsidies 
D) All of the above are correct.

Question 17

If real GDP in the United States is growing at an annual rate of 3.2% per capita and Bolivia's real GDP per capita is growing at a rate of 1.3%,which of the following would we expect in the long run? Assume real GDP per capita in the United States begins at a level above that of real GDP per capita in Bolivia.

Accepted Answer

A) Real GDP per capita in the United States will always be 1.9% higher than real GDP per capita in Bolivia. 
B) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will shrink over time. 
C) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will increase over time. 
D) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will always be $1.9 trillion.

Question 18

In the United States,the annual growth rate of real GDP per hour worked between 2006 and 2014 averaged

Accepted Answer

A) -0.3%. 
B) 1.2%. 
C) 6.9%. 
D) 10.2%.

Question 19

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries.

Accepted Answer

A) True 
 B)False

Question 20

Human capital refers to the percentage of the working-age population in the labor force.

Accepted Answer

A) True 
 B)False

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

Foreign direct investment occurs when a Chinese corporation

Because of the productivity slowdown in the United States from the mid-1970s through the mid-1990s,

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Globalization is positively associated with

The purchase of stocks and bonds issued in another country is known as foreign direct investment.

Explain how market economies are generally better able to achieve technological progress than are centrally planned economies.

By offering more generous unemployment insurance programs,European countries can expect

Because of diminishing returns,an economy can continue to increase real GDP per hour worked only if

In 2014,GDP per capita was in the United States than in China,and since 1980,the growth rate of real GDP per capita has been in the United States than in China.

Which of the following accurately describes growth rates in the United States from 1900 to the present?

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s occurred in all high-income countries.

Figure 11-2 -Refer to Figure 11-2.Based on the per-worker production function above,if the economy raises capital per hour worked from $35,000 to $40,000,by how much will real GDP per hour worked increase?

Which of the following government provisions would help increase the accumulation of knowledge capital?

In the United States,the annual growth rate of real GDP per hour worked between 2006 and 2014 averaged

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries.

Human capital refers to the percentage of the working-age population in the labor force.