Question 1

Use the table below to answer this question. The data show national savings rates as a percentage of GDP; the growth rate of real GDP per person; and birth rates in 2006.
  Country  National Saving  (% of GDP)   Growth rate of  real GDP per  person  Birth Rate  Japan 281.69.96 Canada 242.611.4 Germany 231.99.35 U.S. 141.914.2\begin{array} { | l | c | l | l | } \hline 	ext { Country } & \begin{array} { c } 	ext { National Saving } \	ext { (\% of GDP)  }\end{array} & \begin{array} { l } 	ext { Growth rate of } \	ext { real GDP per } \	ext { person }\end{array} & 	ext { Birth Rate } \\hline 	ext { Japan } & 28 & 1.6 & 9.96 \\hline 	ext { Canada } & 24 & 2.6 & 11.4 \\hline 	ext { Germany } & 23 & 1.9 & 9.35 \\hline 	ext { U.S. } & 14 & 1.9 & 14.2 \\hline\end{array} Country  Japan  Canada  Germany  U.S. ​ National Saving  (% of GDP)  ​28242314​ Growth rate of  real GDP per  person ​1.62.61.91.9​ Birth Rate 9.9611.49.3514.2​​ 
If the data support the neoclassical growth theory, we would expect to see

Accepted Answer

A)   the United States with the highest economic growth rate because it has the highest birth rate.
B)   the United States with the highest economic growth rate because a lower savings rate means more income is spent on consumption.
C)   Canada with the highest economic growth rate because it has the highest real GDP per person.
D)   Japan with the highest economic growth rate because the high saving means that more capital is accumulated. E) A) and B)
F) All of the above

Question 2

A decrease in population shifts the

Accepted Answer

A)   labor demand curve rightward.
B)   labor supply curve rightward.
C)   labor supply curve leftward
D)   labor demand curve leftward.E) All of the above
F) A) and B)

Question 3

The relationship between education and economic growth can best be summarized by saying that

Accepted Answer

A)   educational expenditures tend to divert funds from productive investments, which discourages economic growth.
B)   educational expenditures tend to be inflationary, which discourages economic growth.
C)   education has benefits beyond those who receive the education, which encourages economic growth.
D)   educated people are less apt to consume goods that deplete economic resources, which encourages economic growth.E) All of the above
F) C) and D)

Question 4

Neoclassical growth theory proposes that

Accepted Answer

A)   discoveries result from choices that increase profits.
B)   real GDP per person grows because technological change increases profit opportunities.
C)   technological progress increases the population growth rate and drives down real wages.
D)   real GDP growth is caused by growth in the population.E) A) and C)
F) B) and C)

Question 5

Which of the following statements is correct?

Accepted Answer

A)   When human capital increases, the demand for labor curve shifts leftward.
B)   When workers become more productive, the demand for labor curve shifts rightward.
C)   When technology decreases, the supply of labor curve shifts leftward.
D)   When labor force participation increases, the supply of labor curve shifts leftward.E) None of the above
F) B) and C)

Question 6

Which of the following statements regarding U.S. economic growth is NOT correct?

Accepted Answer

A)   The growth rate of real GDP per person accelerated between 1973 to 1984.
B)   The average annual growth rate of real GDP per person in the United States was rapid during World War II.
C)   Over the past 100 years, on the average real GDP per person grew 2 percent a year.
D)   In the 1930s, real GDP fell well below its trend.E) A) and B)
F) All of the above

Question 7

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

Accepted Answer

A)   does not change because there is no change in the money wage rate.
B)   increases.
C)   increases only if the price level also decreases.
D)   decreases.E) A) and B)
F) All of the above

Question 8

Factors that influence labor productivity include ___________.

Accepted Answer

A)   the labor demand curve
B)   physical capital, human capital, and technology
C)   physical capital, the real wage rate, and technology
D)   the inflation rate, the real wage rate, and the exchange rateE) None of the above
F) A) and C)

Question 9

Convergence of the income gap has been most dramatic between

Accepted Answer

A)   the Central European countries and the United States.
B)   Africa and the United States.
C)   South America and the United States.
D)   Hong Kong and the United States.E) B) and C)
F) None of the above

Question 10

Which of the following ideas apply to the neoclassical growth theory?
I. Technological change results from chance.
II. Growth in real GDP stops if technology stops advancing.

Accepted Answer

A)   both I and II
B)   neither I nor II
C)   II only
D)   I onlyE) A) and B)
F) All of the above

Question 11

A problem with the neoclassical growth theory is its

Accepted Answer

A)   comparison of the economy to a perpetual motion machine.
B)   prediction that population growth raises the real wage rate.
C)   inability to explain persistent differences between countriesʹ GDP growth rates.
D)   prediction that population growth lowers the real wage rate.E) None of the above
F) B) and C)

Question 12

How does the new growth theory explain economic growth?

Accepted Answer

The new growth theory explains growth as...

Question 13

Classical growth theory asserts that

Accepted Answer

A)   an increase in the labor supply raises real wage rates.
B)   real wage rates fall over time and, as they fall, they increase the population growth rate.
C)   the economy can grow indefinitely.
D)   population growth is determined by the level of real GDP per person.E) A) and B)
F) A) and C)

Question 14

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Accepted Answer

A)   Population growth occurs, increasing the supply of labor.
B)   Growth is not possible so the demand for labor never changes.
C)   Investment in capital decreases labor demand, decreasing the demand for labor.
D)   Population growth occurs, shifting the labor supply curve leftward.E) All of the above
F) A) and B)

Question 15

Which of the following is associated with classical growth theory?
I. Growth in real GDP can continue indefinitely.
II. Technological growth increases as the population grows.
III. Population explosions bring real GDP per person back to subsistence levels.

Accepted Answer

A)   I and III
B)   III
C)   I
D)   IIE) B) and D)
F) A) and B)

Question 16

If the price level increases, but workersʹ money wage rates remain constant,which of the following is TRUE?
I. The quantity of labor demanded will increase.
II. The real wage rate will decrease.
III. The demand for labor curve shifts rightward.

Accepted Answer

A)   II and III
B)   I and II
C)   I only
D)   I, II and IIIE) B) and D)
F) None of the above

Question 17

What are the basic arguments of the classical growth theory?

Accepted Answer

The classical growth theory originated d...

Question 18

Over the past 100 years, real GDP per person in the United States has grown at an average of ____________percent a year.

Accepted Answer

A)   4
B)   1
C)   2
D)   3E) B) and C)
F) A) and D)

Question 19

-In the above figure, the equilibrium level of labor is

Accepted Answer

A)   150 billion hours.
B)   200 billion hours.
C)   100 billion hours.
D)   none of the aboveE) C) and D)
F) A) and C)

Question 20

Which of the following policy actions could speed productivity growth?
I. Tax incentives to encourage saving.
II. Encouraging international trade.
III. Directing public funds toward financing basic research.

Accepted Answer

A)   I only.
B)   I and III.
C)   I, II, and III.
D)   II only.E) A) and B)
F) A) and C)

Exam 6: Economic Growth

Over the past 100 years, real GDP per person in the United States has grown at an average of ____________percent a year.

Correct Answer
verified

Correct Answer
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What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Correct Answer
verified

Factors that influence labor productivity include ___________.

Correct Answer
verified

Which of the following ideas apply to the neoclassical growth theory? I. Technological change results from chance. II. Growth in real GDP stops if technology stops advancing.

Correct Answer
verified

How does the new growth theory explain economic growth?

Correct Answer
verified
The new growth theory explains growth as...
View Answer

Which of the following statements is correct?

Correct Answer
verified

If the price level increases, but workersʹ money wage rates remain constant,which of the following is TRUE? I. The quantity of labor demanded will increase. II. The real wage rate will decrease. III. The demand for labor curve shifts rightward.

Correct Answer
verified

-In the above figure, the equilibrium level of labor is

Correct Answer
verified

Which of the following is associated with classical growth theory? I. Growth in real GDP can continue indefinitely. II. Technological growth increases as the population grows. III. Population explosions bring real GDP per person back to subsistence levels.

Correct Answer
verified

A decrease in population shifts the

Correct Answer
verified

Neoclassical growth theory proposes that

Correct Answer
verified

Classical growth theory asserts that

Correct Answer
verified

The relationship between education and economic growth can best be summarized by saying that

Correct Answer
verified

Which of the following statements regarding U.S. economic growth is NOT correct?

Correct Answer
verified

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

Correct Answer
verified

Convergence of the income gap has been most dramatic between

Correct Answer
verified

Which of the following policy actions could speed productivity growth? I. Tax incentives to encourage saving. II. Encouraging international trade. III. Directing public funds toward financing basic research.

Correct Answer
verified

What are the basic arguments of the classical growth theory?

Correct Answer
verified
The classical growth theory originated d...
View Answer

A problem with the neoclassical growth theory is its

Correct Answer
verified

Exam 6: Economic Growth

Over the past 100 years, real GDP per person in the United States has grown at an average of ____________percent a year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What best explains why real GDP per person is always driven to the subsistence level in the classical model?

Correct AnswerverifiedShow Answer

Factors that influence labor productivity include ___________.

Correct AnswerverifiedShow Answer

Which of the following ideas apply to the neoclassical growth theory? I. Technological change results from chance. II. Growth in real GDP stops if technology stops advancing.

Correct AnswerverifiedShow Answer

How does the new growth theory explain economic growth?

Correct AnswerverifiedThe new growth theory explains growth as...View AnswerShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

If the price level increases, but workersʹ money wage rates remain constant,which of the following is TRUE? I. The quantity of labor demanded will increase. II. The real wage rate will decrease. III. The demand for labor curve shifts rightward.

Correct AnswerverifiedShow Answer

-In the above figure, the equilibrium level of labor is

Correct AnswerverifiedShow Answer

Which of the following is associated with classical growth theory? I. Growth in real GDP can continue indefinitely. II. Technological growth increases as the population grows. III. Population explosions bring real GDP per person back to subsistence levels.

Correct AnswerverifiedShow Answer

A decrease in population shifts the

Correct AnswerverifiedShow Answer

Neoclassical growth theory proposes that

Correct AnswerverifiedShow Answer

Classical growth theory asserts that

Correct AnswerverifiedShow Answer

The relationship between education and economic growth can best be summarized by saying that

Correct AnswerverifiedShow Answer

Which of the following statements regarding U.S. economic growth is NOT correct?

Correct AnswerverifiedShow Answer

Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded

Correct AnswerverifiedShow Answer

Convergence of the income gap has been most dramatic between

Correct AnswerverifiedShow Answer

Which of the following policy actions could speed productivity growth? I. Tax incentives to encourage saving. II. Encouraging international trade. III. Directing public funds toward financing basic research.

Correct AnswerverifiedShow Answer

What are the basic arguments of the classical growth theory?

Correct AnswerverifiedThe classical growth theory originated d...View AnswerShow Answer

A problem with the neoclassical growth theory is its

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The new growth theory explains growth as...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The classical growth theory originated d...
View Answer

Correct Answer
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