Question 1

In the 1980s, Howard was one of the best car phone repairmen in his area. After staying home in the 1990s and early 2000s to take care of his children, Howard wants to go back to work in the phone repair business. Which of the following can be said about Howard?

Accepted Answer

A)   Because car phones are obsolete, Howard's human capital is less valuable.
B)   Howard's knowledge of how to repair car phones is obsolete, and his human capital is less valuable now than in 1980.
C)   Howard's ability to repair car phones represents an obsolete skill.
D)   All of these could be said about Howard.

Question 2

Real income per person was the same until:

Accepted Answer

A)   the 1800s, when the Industrial Revolution caused it to grow.
B)   the 1500s, when the Renaissance caused it to grow.
C)   the 1900s, when wireless technology caused it to grow.
D)   Real income per person has been roughly the same for the last three centuries.

Question 3

Exploiting a nonrenewable natural resource is likely to:

Accepted Answer

A)   lead to a higher level of income for a country.
B)   lead to a sustainable high rate of growth in income for a country.
C)   create more productive workers in all facets of the economy.
D)   All of these are true.

Question 4

Over the last 100 years or so, the U.S. economy has grown annually at an average rate of:

Accepted Answer

A)   1 %.
B)   2 %.
C)   3 %.
D)   4 %.

Question 5

According to the rule of 70, a country will double its real GDP per capita in 35 years if it grows at an average of ________ per year.

Accepted Answer

A)   2.0%
B)   3.5 %
C)   5.0%
D)   7.0%

Question 6

Altering the demographic of your workforce in a manner that increases the labor force, like raising a legal minimum retirement age, is likely to:

Accepted Answer

A)   lead to a higher level of income for a country.
B)   lead to a sustainable high rate of growth in income for a country.
C)   create more productive workers in all facets of the economy.
D)   All of these are true.

Question 7

A phenomenon called Moore's law says:

Accepted Answer

A)   computing capacity has doubled every two years.
B)   physical capital will double every two years in countries with high rates of growth.
C)   70 divided by the growth rate equals how long it will take a country to double its income level.
D)   70 divided by the growth rate equals how long it will take a country to double its productive capacity.

Question 8

The only way that the family can consume more and enjoy a higher standard of living is to:

Accepted Answer

A)   increase the amount each person produces.
B)   decrease the amount each person produces.
C)   increase how many people are in the family.
D)   increase both how many people are in the family, and the amount each one produces.

Question 9

The rule of 70 estimates how long it will take a country to:

Accepted Answer

A)   double its real GDP per capita.
B)   achieve zero inflation.
C)   reach its maximum production capacity.
D)   double its output.

Question 10

Creating economic growth:

Accepted Answer

A)   is well understood by macroeconomists.
B)   has no central tenets upon which the theory is based.
C)   involves savings, capital, labor, and technology.
D)   is an easy thing for policy-makers to achieve with correct taxation policy.

Question 11

Ensuring that high-quality public education is freely available to all children is one of the most important ways that a country can:

Accepted Answer

A)   increase its stock of human capital.
B)   decrease its stock of human capital.
C)   decrease its productivity.
D)   increase its foreign direct investment.

Question 12

Growth accounting is seen a useful way to estimate this inputs contribution to growth:

Accepted Answer

A)   technology.
B)   physical capital.
C)   labor.
D)   land.

Question 13

Many governments are currently investing in:

Accepted Answer

A)   less roadways.
B)   communications infrastructure.
C)   less ports, given the decreasing importance of international business.
D)   All of these are true.

Question 14

Human capital:

Accepted Answer

A)   is always increasing.
B)   can become outdated or deteriorate.
C)   is better when acquired as an adult.
D)   All of these are true.

Question 15

If a country devotes its resources to acquiring more physical capital it will:

Accepted Answer

A)   not face the investment trade-off.
B)   have more GDP per capita in the future.
C)   have more current consumption.
D)   not have less overall GDP in the future.

Question 16

Natural resources can be:

Accepted Answer

A)   renewable.
B)   nonrenewable.
C)   Both of these are true.
D)   Neither of these is true.

Question 17

We can calculate how long a country will take to double its real GDP per capita using:

Accepted Answer

A)   its average growth rate.
B)   its GDP deflator.
C)   the CPI indexation factor.
D)   the GDP growth estimator.

Question 18

Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if α=0.25 then growth of output can be estimated to be:

Accepted Answer

A)   4.25%.
B)   4.00%.
C)   6.00%.
D)   4.75%.

Question 19

If a country has a high level of income, it likely has:

Accepted Answer

A)   a highly productive work force.
B)   widespread access to technology.
C)   high levels of physical capital.
D)   All of these are true.

Question 20

Which of the following productive resources is considered 'fundamentally different' from other resources with respect to supply and diminishing returns?

Accepted Answer

A)   labor.
B)   land.
C)   physical capital.
D)   technology.

Exam 10: Economic Growth

Human capital:

Correct AnswerverifiedShow Answer

According to the rule of 70, a country will double its real GDP per capita in 35 years if it grows at an average of ________ per year.

Correct AnswerverifiedShow Answer

Real income per person was the same until:

Correct AnswerverifiedShow Answer

Exploiting a nonrenewable natural resource is likely to:

Correct AnswerverifiedShow Answer

Growth accounting is seen a useful way to estimate this inputs contribution to growth:

Correct AnswerverifiedShow Answer

The only way that the family can consume more and enjoy a higher standard of living is to:

Correct AnswerverifiedShow Answer

Many governments are currently investing in:

Correct AnswerverifiedShow Answer

The rule of 70 estimates how long it will take a country to:

Correct AnswerverifiedShow Answer

If a country devotes its resources to acquiring more physical capital it will:

Correct AnswerverifiedShow Answer

Altering the demographic of your workforce in a manner that increases the labor force, like raising a legal minimum retirement age, is likely to:

Correct AnswerverifiedShow Answer

In the 1980s, Howard was one of the best car phone repairmen in his area. After staying home in the 1990s and early 2000s to take care of his children, Howard wants to go back to work in the phone repair business. Which of the following can be said about Howard?

Correct AnswerverifiedShow Answer

Ensuring that high-quality public education is freely available to all children is one of the most important ways that a country can:

Correct AnswerverifiedShow Answer

Which of the following productive resources is considered 'fundamentally different' from other resources with respect to supply and diminishing returns?

Correct AnswerverifiedShow Answer

We can calculate how long a country will take to double its real GDP per capita using:

Correct AnswerverifiedShow Answer

Creating economic growth:

Correct AnswerverifiedShow Answer

A phenomenon called Moore's law says:

Correct AnswerverifiedShow Answer

Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if α=0.25 then growth of output can be estimated to be:

Correct AnswerverifiedShow Answer

Natural resources can be:

Correct AnswerverifiedShow Answer

Over the last 100 years or so, the U.S. economy has grown annually at an average rate of:

Correct AnswerverifiedShow Answer

If a country has a high level of income, it likely has:

Correct AnswerverifiedShow Answer

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