Question 1

If real GDP doubles in 12 years, its average annual growth rate is approximately:

Accepted Answer

A)   6%.
B)   5%.
C)   4%.
D)   3%.

Question 2

Human capital is:

Accepted Answer

A)   the improvement in labor made possible by education and knowledge that is embodied in the workforce.
B)   the machinery and tools that each worker owns.
C)   robots that can perform tasks that only humans could do in the past.
D)   not as important as physical capital.

Question 3

A country's growth rate strongly depends on how it has invested in its physical capital. Generally, countries that have used _____ as a source of their capital investment have exhibited the highest growth rate.

Accepted Answer

A)   foreign direct investment
B)   domestic saving
C)   foreign portfolio investment
D)   contracted globalization

Question 4

Written in 1972, the book that argued that long-run economic growth was not sustainable because of limited supplies of natural resources was called:

Accepted Answer

A)   An Essay on the Principle of Population.
B)   The Limits to Growth.
C)   The Wealth of Nations.
D)   Aftershock: The Next Economy and America's Future.

Question 5

Economists believe that the best way to stimulate investment in physical capital is to encourage:

Accepted Answer

A)   higher rates of investment in human capital.
B)   more spending on infrastructure.
C)   the conservation of natural resources.
D)   higher rates of national saving.

Question 6

Conditional convergence suggests that if adjustments were made for differences in education, infrastructure, and other factors that contribute to growth, poorer countries would have higher growth rates.

Accepted Answer

A) True 
 B)False

Question 7

The aggregate production function typically increases at an increasing rate with additions to capital.

Accepted Answer

A) True 
 B)False

Question 8

One of the most important types of infrastructure that a government can provide is:

Accepted Answer

A)   a good tax system.
B)   basic health measures such as clean water and disease control.
C)   the kind that private companies would provide if they were allowed to.
D)   more intervention in the market mechanism.

Question 9

In 2010, the median U.S. household income was approximately:

Accepted Answer

A)   $50,000.
B)   $8,000.
C)   $16,000.
D)   $25,000.

Question 10

The aggregate production function exhibits _____ returns to _____ capital.

Accepted Answer

A)   increasing; physical
B)   decreasing; physical
C)   constant; physical
D)   increasing; financial

Question 11

Today China is the fastest-growing major economy and it also:

Accepted Answer

A)   spends a lower share of its GDP on investment goods than did other major economies.
B)   spends a higher share of its GDP on investment goods than did other major economies.
C)   spends more of its GDP on national defense than any other country except for North Korea.
D)   was the first Asian country to join the European Union.

Question 12

Use the following to answer questions : 
-(Table: Kenya's Economy in 2010)  Look at the table Kenya's Economy in 2010. Aggregate output at the end of 2010, assuming no changes in the price level, was about:

Accepted Answer

A)   $326 billion.
B)   $32.632 billion.
C)   $3,635 billion.
D)   $6,500 billion.

Question 13

To find the approximate number of years it takes the economy to double:

Accepted Answer

A)   divide its growth rate by 70.
B)   divide 70 by its growth rate.
C)   divide its growth rate by 100.
D)   multiply its growth rate by 20.

Question 14

The rule of 70 is most useful in:

Accepted Answer

A)   identifying the causes of economic growth.
B)   identifying the sources of economic growth.
C)   estimating the productivity of labor.
D)   estimating the doubling time of real GDP for a given growth rate.

Question 15

Which of the following institutions is important for channeling savings into investment?

Accepted Answer

A)   schools
B)   religious institutions
C)   banks
D)   the federal government

Question 16

Natural resources:

Accepted Answer

A)   are still the most important factor in determining the productivity of human or physical capital for all countries.
B)   are the only factor that consistently shows a positive effect on productivity for wealthy countries.
C)   are a less significant source of productivity growth in most countries today than in earlier times.
D)   can be used to explain the differences in productivity growth among countries.

Question 17

Use the following to answer questions 
Figure: Technological Progress and Productivity Growth 
-(Figure: Technological Progress and Productivity Growth)  Look at the figure Technological Progress and Productivity Growth. Which of the following changes in real GDP is most likely to have resulted from an increase in domestic savings?

Accepted Answer

A)   A to B
B)   B to A
C)   C to B
D)   C to A

Question 18

Sub-Saharan Africa is so poor mainly because:

Accepted Answer

A)   settlers from Europe own all of the land.
B)   the diamond merchants took all of the money away to other countries.
C)   of political instability and civil wars.
D)   all of the bright people move to other countries.

Question 19

If technology advances:

Accepted Answer

A)   more output can be obtained from the same inputs.
B)   more inputs are needed to produce the same output.
C)   less output can be obtained from the same inputs.
D)   less output can be produced even with more inputs.

Question 20

Use the following to answer questions 
Scenario: Growth Rates in Two Countries
India is growing at a rate of 9% per year, and its real GDP per capita is about $3,500, while the United States is growing at a rate of 3% per year, and its real GDP per capita is about $47,000.
-(Scenario: Growth Rates in Two Countries)  Look at the scenario Growth Rates in Two Countries. How long will it take India to double its real GDP per capita?

Accepted Answer

A)   7.8 years
B)   10.2 years
C)   14.6 years
D)   90 years

Exam 23: Long-Run Economic Growth

A country's growth rate strongly depends on how it has invested in its physical capital. Generally, countries that have used _____ as a source of their capital investment have exhibited the highest growth rate.

Correct Answer
verified

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output at the end of 2010, assuming no changes in the price level, was about:

Correct Answer
verified

To find the approximate number of years it takes the economy to double:

Correct Answer
verified

Correct Answer
verified

Natural resources:

Correct Answer
verified

Human capital is:

Correct Answer
verified

Conditional convergence suggests that if adjustments were made for differences in education, infrastructure, and other factors that contribute to growth, poorer countries would have higher growth rates.

Correct Answer
verified

In 2010, the median U.S. household income was approximately:

Correct Answer
verified

If technology advances:

Correct Answer
verified

Today China is the fastest-growing major economy and it also:

Correct Answer
verified

The aggregate production function typically increases at an increasing rate with additions to capital.

Correct Answer
verified

Sub-Saharan Africa is so poor mainly because:

Correct Answer
verified

One of the most important types of infrastructure that a government can provide is:

Correct Answer
verified

The rule of 70 is most useful in:

Correct Answer
verified

The aggregate production function exhibits _ returns to _ capital.

Correct Answer
verified

Which of the following institutions is important for channeling savings into investment?

Correct Answer
verified

Correct Answer
verified

Economists believe that the best way to stimulate investment in physical capital is to encourage:

Correct Answer
verified

If real GDP doubles in 12 years, its average annual growth rate is approximately:

Correct Answer
verified

Written in 1972, the book that argued that long-run economic growth was not sustainable because of limited supplies of natural resources was called:

Correct Answer
verified

Exam 23: Long-Run Economic Growth

A country's growth rate strongly depends on how it has invested in its physical capital. Generally, countries that have used _____ as a source of their capital investment have exhibited the highest growth rate.

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output at the end of 2010, assuming no changes in the price level, was about:

Correct AnswerverifiedShow Answer

To find the approximate number of years it takes the economy to double:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Natural resources:

Correct AnswerverifiedShow Answer

Human capital is:

Correct AnswerverifiedShow Answer

Conditional convergence suggests that if adjustments were made for differences in education, infrastructure, and other factors that contribute to growth, poorer countries would have higher growth rates.

Correct AnswerverifiedShow Answer

In 2010, the median U.S. household income was approximately:

Correct AnswerverifiedShow Answer

If technology advances:

Correct AnswerverifiedShow Answer

Today China is the fastest-growing major economy and it also:

Correct AnswerverifiedShow Answer

The aggregate production function typically increases at an increasing rate with additions to capital.

Correct AnswerverifiedShow Answer

Sub-Saharan Africa is so poor mainly because:

Correct AnswerverifiedShow Answer

One of the most important types of infrastructure that a government can provide is:

Correct AnswerverifiedShow Answer

The rule of 70 is most useful in:

Correct AnswerverifiedShow Answer

The aggregate production function exhibits _____ returns to _____ capital.

Correct AnswerverifiedShow Answer

Which of the following institutions is important for channeling savings into investment?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economists believe that the best way to stimulate investment in physical capital is to encourage:

Correct AnswerverifiedShow Answer

If real GDP doubles in 12 years, its average annual growth rate is approximately:

Correct AnswerverifiedShow Answer

Written in 1972, the book that argued that long-run economic growth was not sustainable because of limited supplies of natural resources was called:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The aggregate production function exhibits _ returns to _ capital.

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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