Question 1

Use the following to answer questions : 
-(Table: Kenya's Economy in 2010)  Look at the table Kenya's Economy in 2010. Aggregate output per capita at the beginning of 2010 was:

Accepted Answer

A)   $5,000.
B)   $10,000.
C)   $775.
D)   $7,750.

Question 2

A key input for measuring economic growth is:

Accepted Answer

A)   the size of the government's budget.
B)   real GDP per capita.
C)   life expectancy.
D)   the Dow Jones stock market index.

Question 3

Which country had the fastest growth rate of real GDP per capita between 1980 and 2010?

Accepted Answer

A)   the United States
B)   Ireland
C)   China
D)   France

Question 4

Investment in human capital shifts the aggregate production function:

Accepted Answer

A)   downward.
B)   leftward.
C)   upward.
D)   rightward.

Question 5

Use the following to answer questions 
Scenario: Capital
An economy initially has 200 units of physical capital per worker. Each year it increases the amount of physical capital by 10%. According to the aggregate production function for this economy, each 1% increase in physical capital per worker, holding human capital and technology constant, increases output per worker by 0.25%.
-(Scenario: Capital)  Look at the scenario Capital. In three years' time, what is the level of physical capital per worker in this economy?

Accepted Answer

A)   220 units
B)   242 units
C)   266.2 units
D)   200 units

Question 6

If real GDP grows at an average rate of 3% per year, it will double in approximately _____ years.

Accepted Answer

A)   less than 10
B)   20
C)   23
D)   36

Question 7

In 2010, China saved:

Accepted Answer

A)   less than the United States saved.
B)   more and spent more on investment as a percentage of its GDP than the United States.
C)   less and spent less on investment as a percentage of its GDP than the United States.
D)   more but still had an economic growth rate less than that of the United States.

Question 8

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have negative growth rates.

Accepted Answer

A) True 
 B)False

Question 9

Use the following to answer questions 
Scenario: Growth Rates
Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year. Real GDP per capita of China is $4,000, and its annual growth rate is 7%.
-(Scenario: Growth Rates)  Look at the scenario Growth Rates. According to the rule of 70, how large will China's real GDP per capita be in 20 years?

Accepted Answer

A)   $5,600
B)   $8,000
C)   $16,000
D)   $28,000

Question 10

The main reason South Korea has grown so rapidly is that because it was so poor:

Accepted Answer

A)   it could take advantage of international financial aid for poor countries.
B)   people left to go to more prosperous countries.
C)   it could skip forward, or leapfrog, to use new-generation technology as it developed.
D)   it could import highly trained engineers from other countries.

Question 11

All else equal, a nation that has a high rate of _____ will have a high rate of _____ and therefore a high growth rate of _____ capital.

Accepted Answer

A)   investment; savings; human
B)   savings; investment; natural
C)   savings; investment; physical
D)   savings; consumption; physical

Question 12

Education's effect on productivity:

Accepted Answer

A)   is believed to be less important than the amount of physical capital a worker has available.
B)   is even more important than increases in physical capital.
C)   has fallen in the past century in the United States.
D)   depends on the wealth of the country.

Question 13

According to Jeff Sachs of Columbia University, Africa is politically unstable because Africa is poor and not the other way around.

Accepted Answer

A) True 
 B)False

Question 14

Physical capital includes:

Accepted Answer

A)   a worker's education or knowledge.
B)   machine tools.
C)   money.
D)   shares of stock.

Question 15

Because of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will _____ output by _____ a factor of two.

Accepted Answer

A)   decrease; less than
B)   increase; less than
C)   increase; exactly
D)   increase; more than

Question 16

Economists say that long-run economic growth is almost entirely due to:

Accepted Answer

A)   rising productivity.
B)   population growth.
C)   a democratically elected government.
D)   a balanced budget.

Question 17

In general, the growth in real GDP per capita:

Accepted Answer

A)   was smaller than the growth of per capita oil consumption before 1973.
B)   fluctuated above and below the growth of per capita oil consumption before 1973.
C)   was greater than the growth of per capita oil consumption after 1973.
D)   was smaller than the growth of per capita oil consumption after oil prices began to increase in 2004.

Question 18

Which of the following changes would contribute to a nation's rapid long-run economic growth?

Accepted Answer

A)   faster technological progress
B)   faster population growth
C)   less physical capital per worker
D)   lower levels of average human capital

Question 19

An increase in the amount of physical capital per worker _____, while technological progress _____.

Accepted Answer

A)   makes the aggregate production function steeper; changes the slope of the aggregate production function
B)   makes the aggregate production function steeper; makes the aggregate production function flatter
C)   moves the economy along the aggregate production function; shifts up the aggregate production function
D)   shifts up the aggregate production function; moves the economy along the aggregate production function

Question 20

The average level of education, measured by the number of years the average adult has spent in school, is higher in Argentina than it is in China.

Accepted Answer

A) True 
 B)False

Exam 23: Long-Run Economic Growth

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output per capita at the beginning of 2010 was:

Correct Answer
verified

The main reason South Korea has grown so rapidly is that because it was so poor:

Correct Answer
verified

Correct Answer
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A key input for measuring economic growth is:

Correct Answer
verified

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have negative growth rates.

Correct Answer
verified

If real GDP grows at an average rate of 3% per year, it will double in approximately _____ years.

Correct Answer
verified

Which country had the fastest growth rate of real GDP per capita between 1980 and 2010?

Correct Answer
verified

In general, the growth in real GDP per capita:

Correct Answer
verified

Because of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will _ output by _ a factor of two.

Correct Answer
verified

In 2010, China saved:

Correct Answer
verified

According to Jeff Sachs of Columbia University, Africa is politically unstable because Africa is poor and not the other way around.

Correct Answer
verified

Which of the following changes would contribute to a nation's rapid long-run economic growth?

Correct Answer
verified

An increase in the amount of physical capital per worker _, while technological progress _.

Correct Answer
verified

All else equal, a nation that has a high rate of ___ will have a high rate of _ and therefore a high growth rate of ___ capital.

Correct Answer
verified

Physical capital includes:

Correct Answer
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Education's effect on productivity:

Correct Answer
verified

Investment in human capital shifts the aggregate production function:

Correct Answer
verified

Economists say that long-run economic growth is almost entirely due to:

Correct Answer
verified

The average level of education, measured by the number of years the average adult has spent in school, is higher in Argentina than it is in China.

Correct Answer
verified

Correct Answer
verified

Exam 23: Long-Run Economic Growth

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output per capita at the beginning of 2010 was:

Correct AnswerverifiedShow Answer

The main reason South Korea has grown so rapidly is that because it was so poor:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A key input for measuring economic growth is:

Correct AnswerverifiedShow Answer

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have negative growth rates.

Correct AnswerverifiedShow Answer

If real GDP grows at an average rate of 3% per year, it will double in approximately _____ years.

Correct AnswerverifiedShow Answer

Which country had the fastest growth rate of real GDP per capita between 1980 and 2010?

Correct AnswerverifiedShow Answer

In general, the growth in real GDP per capita:

Correct AnswerverifiedShow Answer

Because of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will _____ output by _____ a factor of two.

Correct AnswerverifiedShow Answer

In 2010, China saved:

Correct AnswerverifiedShow Answer

According to Jeff Sachs of Columbia University, Africa is politically unstable because Africa is poor and not the other way around.

Correct AnswerverifiedShow Answer

Which of the following changes would contribute to a nation's rapid long-run economic growth?

Correct AnswerverifiedShow Answer

An increase in the amount of physical capital per worker _____, while technological progress _____.

Correct AnswerverifiedShow Answer

All else equal, a nation that has a high rate of _____ will have a high rate of _____ and therefore a high growth rate of _____ capital.

Correct AnswerverifiedShow Answer

Physical capital includes:

Correct AnswerverifiedShow Answer

Education's effect on productivity:

Correct AnswerverifiedShow Answer

Investment in human capital shifts the aggregate production function:

Correct AnswerverifiedShow Answer

Economists say that long-run economic growth is almost entirely due to:

Correct AnswerverifiedShow Answer

The average level of education, measured by the number of years the average adult has spent in school, is higher in Argentina than it is in China.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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Because of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will _ output by _ a factor of two.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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An increase in the amount of physical capital per worker _, while technological progress _.

Correct Answer
verified

All else equal, a nation that has a high rate of ___ will have a high rate of _ and therefore a high growth rate of ___ capital.

Correct Answer
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Correct Answer
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Correct Answer
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