Question 1

The convergence theory is also known as:

Accepted Answer

A)  the catch-up effect.
B)  Say's law.
C)  the income effect.
D)  Moore's law.E) C) and D)
F) A) and B)

Question 2

Growth often requires:

Accepted Answer

A)  concurrent improvements in many aspects of the economy.
B)  governments to invest in one facet of the economy at a time,starting with education.
C)  governments to invest in one facet of the economy at a time,starting with basic infrastructure.
D)  governments to invest in one facet of the economy at a time,starting with leapfrog technology.E) A) and C)
F) A) and B)

Question 3

The poverty trap refers to:

Accepted Answer

A)  poorer countries having a harder time buying the things that will end their poverty.
B)  richer countries spiraling downward into poverty if they invest in the wrong industries.
C)  richer countries spiraling downward into poverty if they fail to invest enough in physical capital.
D)  All of these describe the poverty trap.E) None of the above
F) B) and C)

Question 4

An example of a nonrenewable resource would be:

Accepted Answer

A)  trees.
B)  rivers.
C)  an oil deposit.
D)  All of these are examples of nonrenewable resources.E) A) and B)
F) None of the above

Question 5

The middle class in China:

Accepted Answer

A)  outnumbers the entire population of the United States.
B)  is almost equal in size to the entire population of the United States.
C)  is about half the size of the population of the United States.
D)  None of these is true.E) None of the above
F) B) and C)

Question 6

The productivity of workers can depend on which of the following?

Accepted Answer

A)  Technology
B)  Human capital
C)  Physical capital
D)  All of these are determinants of productivity.E) B) and C)
F) A) and D)

Question 7

The value of human capital can decrease when:

Accepted Answer

A)  someone forgets how to do something that was valuable in their work.
B)  the skills someone possesses are no longer needed.
C)  machines can be taught to do what people used to have to do.
D)  All of these are examples of a decrease in human capital.E) None of the above
F) B) and D)

Question 8

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.E) None of the above
F) All of the above

Question 9

The productivity of workers can depend upon which of the following?

Accepted Answer

A)  Human capital
B)  Natural resources
C)  Technology
D)  All of these are determinants of productivity.E) A) and D)
F) None of the above

Question 10

Often,improvements in technology:

Accepted Answer

A)  can lead to more improvements in technology.
B)  can lead to sustainable rates of growth in income for a country.
C)  can continuously increase the productivity of workers.
D)  All of these are true.E) All of the above
F) A) and B)

Question 11

Economic growth means:

Accepted Answer

A)  healthier citizens.
B)  wealthier citizens.
C)  better-educated citizens.
D)  All of these are true.E) None of the above
F) B) and C)

Question 12

We calculate the amount of physical capital in an economy by adding up the value of all:

Accepted Answer

A)  tools,equipment,and structures.
B)  skills and expertise of all employed people.
C)  skills and expertise of the working age population.
D)  technological capabilities used in production.E) B) and C)
F) B) and D)

Question 13

Countries with low levels of GDP per capita usually also have:

Accepted Answer

A)  low levels of schooling.
B)  high levels of schooling.
C)  mandatory military service.
D)  highly developed infrastructures.E) B) and D)
F) A) and B)

Question 14

The level of savings in an economy:

Accepted Answer

A)  can be an important determinant of future productivity.
B)  can be an important determinant of capital investment.
C)  can be a source of funding for physical capital.
D)  All of these are true.E) B) and D)
F) A) and D)

Question 15

Fossil fuels are considered:

Accepted Answer

A)  a renewable resource.
B)  a nonrenewable resource.
C)  physical capital.
D)  technology.E) A) and B)
F) A) and C)

Question 16

An example of a renewable resource would be:

Accepted Answer

A)  trees.
B)  oxygen.
C)  fish in the ocean.
D)  All of these are examples of renewable resources.E) None of the above
F) All of the above

Question 17

A reduction in current consumption to pay for the investment in capital intended to increase future production is known as the:

Accepted Answer

A)  consumption effect.
B)  substitution effect.
C)  investment trade-off.
D)  income effect.E) A) and B)
F) A) and C)

Question 18

Household savings rates:

Accepted Answer

A)  vary enormously across countries.
B)  are remarkable similar across countries.
C)  seem to be similar for countries within the same continent.
D)  are impossible to compare across countries.E) A) and B)
F) None of the above

Question 19

An example of physical capital is:

Accepted Answer

A)  a tractor.
B)  a farmer.
C)  a high-yield seed varietal.
D)  All of these are examples of physical capital.E) B) and C)
F) A) and D)

Question 20

Governments invest in infrastructure:

Accepted Answer

A)  to increase the productivity of businesses.
B)  to spur economic growth.
C)  to increase the growth rate of GDP per capita.
D)  All of these are reasons why the government provides infrastructure.E) None of the above
F) All of the above

Exam 26: Economic Growth

A reduction in current consumption to pay for the investment in capital intended to increase future production is known as the:

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The poverty trap refers to:

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An example of physical capital is:

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We calculate the amount of physical capital in an economy by adding up the value of all:

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The middle class in China:

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An example of a renewable resource would be:

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The level of savings in an economy:

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Often,improvements in technology:

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Countries with low levels of GDP per capita usually also have:

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Growth often requires:

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The convergence theory is also known as:

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The productivity of workers can depend upon which of the following?

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Fossil fuels are considered:

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Real income per person was the same until:

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Governments invest in infrastructure:

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The value of human capital can decrease when:

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Economic growth means:

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The productivity of workers can depend on which of the following?

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An example of a nonrenewable resource would be:

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Household savings rates:

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