Chapterr 17

Question
n 1 (1 point))
New grow
wth theory holds
h
that tecchnology is __________
_
_ and that thee more resouurces that goo to
develop technology,
t
the _______
____ technollogy that is pproduced.
Question
n 1 options:
exog
genous; morre and better
exog
genous; less
endo
ogenous; mo
ore and betteer
ogenous; lesss
endo
Question
n 2 (1 point))
Suppose the populatiion of a coun
ntry falls, bu
ut Real GDP remains connstant. Theree is ___________
economicc growth.
Question
n 2 options:
both
h absolute an
nd per-capitaa real
abso
olute, but not per-capita real
per-capita real, but
b not absolute
neith
her absolute nor per-cap
pita real
Question
n 3 (1 point))
oduction fun
nction Real GDP
G
= T (L,, K), the T reepresents thee ______________
In the pro
coefficien
nt, the L rep
presents ____
__________
____ and the K representts ________________.
Question
n 3 options:
tax; labor; capitaal
tech
hnology; labo
or; capital
tech
hnology; labo
or; knowledg
ge
tech
hnology; liveestock; know
wledge

Question
n 4 (1 point))
Accordin
ng to Paul Ro
omer, one way
w to producce more ideaas and know
wledge is by
Question
n 4 options:
inveesting in reseearch and development.
givin
ng the federal governmeent more con
ntrol over thee direction oof research.
givin
ng businessees less contro
ol over federral research monies.
a, b and c
Question
n 5 (1 point))
n a given economy are reduced,
r
it caauses firms tto employ ___________
When intterest rates in
capital go
oods. In term
ms of the pro
oduction fun
nction (graphhed with labbor on the hoorizontal axiss and
Real GDP on the verrtical axis), th
his then causes ______________________ .
n 5 options:
Question
morre; the produ
uction functio
on to shift up
pward
less;; the producttion function
n to shift dow
wnward
morre; a movemeent up along
g a given pro
oduction funcction
morre; a movemeent down alo
ong a given production
p
ffunction
Question
n 6 (1 point))
An econo
omy growing
g at a steady
y rate of 2 peercent per yeear doubles iin size approoximately evvery
________
___ years.
Question
n 6 options:
50
35
23.3
3
12
Question
n 7 (1 point))

In 1961, President Kennedy com

mmitted the United
U
Statess to a manneed lunar misssion by the eend
of the decade. Few th
hought we co
ould actually
y do it, but oof course we did, with fivve months too
spare. Th
his story mig
ght illustrate a ________
___ growth thheory argum
ment that techhnological
change __________.
_
Question
n 7 options:
new
w; can be deliiberately acccelerated
new
w; relies on government policy
p
neocclassical; can
n be deliberaately accelerrated
neocclassical; rellies on goverrnment policcy
Question
n 8 (1 point))
If a coun
ntry's econom
mic growth rate is 4 percent a year, aapproximatelly how manyy years will it
take to do
ouble its Reaal GDP?
Question
n 8 options:
22.2
2
25
15.6
6
17.5
5
8.8
n 9 (1 point))
Question
Refer to Exhibit 17-3
3 Assume th
hat the startin
ng point on tthe production function is point A. After
an increaase in the quaantity of cap
pital, there would
w
be a _________________________ which woould
shift the LRAS curvee from LRAS
S1 to ______
___________ resulting inn ________________..
Question
n 9 options:
mov
vement along
g the producction function
n to point C;; LRAS2; ecconomic growth
shift
ft upward of the productiion function to point B; L
LRAS2; ecoonomic grow
wth
mov
vement along
g the producction function
n to point C;; LRAS3; a shrinking ecconomy
shift
ft upward of the productiion function to point B; L
LRAS3; a shhrinking ecoonomy
Question
n 10 (1 point)

Absolutee real econom

mic growth is
i an increasee in ___________ from oone period too the next.
Question
n 10 options:
GDP
P
Real GDP
per-capita Real GDP
per-capita GDP
nonee of the abov
ve
Question
n 11 (1 point)
When tax
xes on the reeturn to capittal in a given
n economy aare reduced, it causes firrms to emplooy
________
___ capital goods.
g
In teerms of the production
p
fuunction (grapphed with laabor on the
horizontaal axis and Real
R GDP on
n the verticall axis), this th
then causes ______________________
which maakes the LRA
AS curve sh
hift ________
_____ resultting in ________________________.
Question
n 11 options:
less;; the producttion function
n to shift dow
wnward; lefttward; a shriinking econoomy
morre; the produ
uction functio
on to shift up
pward; righttward; econoomic growthh
morre; a movemeent up along
g a given pro
oduction funcction; rightw
ward; econom
mic growth
morre; a movemeent down alo
ong a given production
p
ffunction; left
ftward; a shriinking econoomy
Question
n 12 (1 point)
Stan Lau
urel and Oliv
ver Hardy actted separatelly in comedyy shorts for tthe Hal Roach Studio foor
over a deecade withou
ut greatly disstinguishing themselves from hundreeds of other screen
comedian
ns. Then in 1927,
1
Roach
h writer-direcctor Leo MccCarey tried them out as a comedy teeam
in one more routine short.
s
Only then
t
was the fantastic chhemistry betw
ween "the fidddle and thee
bow" reaalized. The reest is immorrtality. This story
s
relates to the "new
w growth theoory" idea of
Question
n 12 options:
emp
ployee involv
vement.
rearrranging.
exog
geneity.
objeects and ideaas.

Question
n 13 (1 point)
Refer to Exhibit 17-4
4 Assume th
hat the startin
ng point in ggraphs (a) annd (b) in Exhhibit 17-4 is point
1. After a decrease in
n income tax
xes, there wo
ould be a _________________________ which wouuld
cause a movement
m
allong the prod
duction funcction from pooint 1 to poinnt _______________. Thhe
result wo
ould be a shift of the LRA
AS curve fro
om LRAS1 tto ________________ ressulting in
________
________..
Question
n 13 options:
leftw
ward shift off the labor su
upply curve from
f
SL1 too SL3; movement along tthe productiion
funcction to poin
nt 3; LRAS3;; a shrinking
g economy
righ
htward shift of
o the labor supply
s
curvee from SL1 tto SL2; movvement alongg the producction
funcction to poin
nt 3; LRAS3;; a shrinking
g economy
leftw
ward shift off the labor su
upply curve from
f
SL1 too SL3; movement along tthe productiion
funcction to poin
nt 2; LRAS2;; economic growth
g
righ
htward shift of
o the labor supply
s
curvee from SL1 tto SL2; movvement alongg the producction
funcction to poin
nt 2; LRAS2;; economic growth
g
Question
n 14 (1 point)
Refer to Exhibit 17-1
1. If this pro
oduction funcction is grapphed with Reeal GDP on tthe vertical aaxis
r
from 4 units to 6 unnits it wouldd cause a
and laborr on the horiizontal axis, and capital rises
Question
n 14 options:
shift
ft upward in the
t production function to a higher llevel of Reall GDP.
shift
ft downward in the produ
uction function to a loweer level of Reeal GDP.
mov
vement down
n along the same
s
producction functionn to a lower level of Reaal GDP.
mov
vement up allong the sam
me production
n function too a higher levvel of Real G
GDP.
Question
n 15 (1 point)
An econo
omy doubless in size everry 25 years if
i it maintainns a steady aannual growtth rate of aboout
________
___ percent..
Question
n 15 options:
4
2.8
3.5

2
n 16 (1 point)
Question
ng to new gro
owth theory, discovering
g and implem
menting new
w ___________ is what caauses
Accordin
economicc growth.
Question
n 16 options:
way
ys of managin
ng personneel
man
nufacturing techniques
ideaas
reso
ource sourcess
nonee of the abov
ve
Question
n 17 (1 point)
Real GDP in a small country is worth
w
$8 billion. The poppulation of thhe country is 200,000. W
What
pita Real GD
DP?
is per cap
Question
n 17 options:
3000
00
4000
00
6000
00
3000
000
Question
n 18 (1 point)
The term
m human capiital refers to education, training
t
and experience.
Question
n 18 options:
TRU
UE
FAL
LSE
Question
n 19 (1 point)

When intterest rates fall

f in a given
n economy, it causes firm
ms to borrow
w ___________ funds useed
for purch
hasing capitaal goods. Th
he result willl be a(n) ____________ inn the level oof capital
employed
d in the econ
nomy. In terrms of the prroduction fuunction (grapphed with labbor on the
horizontaal axis and Real
R GDP on
n the verticall axis), this th
then causes ______________________
which maakes the LRA
AS curve sh
hift ________
_____ resultting in ________________________.
Question
n 19 options:
morre; increase; the productiion function to shift upw
ward; rightwaard; econom
mic growth
he productio
on function to
t shift downnward; leftw
ward; a shrinkking econom
my
less;; decrease; th
morre; increase; a movementt up along a given produuction functioon; rightwarrd; economicc
grow
wth
g a given prooduction funnction; leftw
ward; a shrinkking
morre; increase; a movementt down along
econ
nomy
Question
n 20 (1 point)
In the pro
oduction fun
nction Real GDP
G
= T (L,, K), the T reepresents thee tax coefficient.
Question
n 20 options:
TRU
UE
FAL
LSE
Question
n 21 (1 point)
Meta-ideeas involve
Question
n 21 options:
the methods
m
of producing
p
id
deas.
perssuading others of the validity of one's ideas.
putting ideas in a form capaable of appro
oval in a "yess" or "no" voote.
the expression
e
of
o ideas in mathematical
m
form.
Question
n 22 (1 point)
New grow
wth theory holds
h
technology to be __________;
_
neoclassicaal growth theeory holds
technolog
gy to be ___
________.
Question
n 22 options:

exog
genous; endo
ogenous
endo
ogenous; end
dogenous
endo
ogenous; exo
ogenous
exog
genous; exog
genous
Question
n 23 (1 point)
Refer to Exhibit 17-2
2. Assume th
hat the startiing point is aalways pointt 1. Which oof the production
function graphs show
wn, (a) or (b)), represents an increase in the quanttity of labor,, and which
representts an increase in the tech
hnology coeffficient, resppectively?
Question
n 23 options:
(a); (b)
(b); (a)
(a); (a)
(b); (b)
n 24 (1 point)
Question
Two Harrvard econom
mists, Robertt Barro and Rachel
R
McC
Cleary, have researched tthe role that
________
_________ plays
p
in econ
nomic growtth.
Question
n 24 options:
relig
gion
metaa-ideas
tech
hnology
hum
man resource developmen
nt
Question
n 25 (1 point)
If the ann
nual growth rate in Real GDP is 2 peercent, then iit will take 550 years for the economyy to
double in
n size.
Question
n 25 options:
TRU
UE
FAL
LSE

Question
n 26 (1 point)
Productio
on functionss used in economic grow
wth theory aree always lim
mited to two inputs: laborr and
capital.
Question
n 26 options:
TRU
UE
FAL
LSE
Question
n 27 (1 point)
Accordin
ng to econom
mist Benjamiin Friedman, sustained eeconomic groowth can maake people m
more
willing to
o work towaard improvin
ng the enviro
onment and rreducing povverty.
Question
n 27 options:
TRU
UE
FAL
LSE
Question
n 28 (1 point)
Comparee a property rights
r
system
m in which people
p
are alllowed to keeep one-thirdd of the moneetary
rewards of
o their labor with a systtem in which
h they keep ttwo-thirds. W
We should exxpect harderr
work und
der the ____
_______ systtem and less risk taking uunder the ___________ ssystem.
Question
n 28 options:
form
mer; former
form
mer; latter
latteer; former
latteer; latter
Question
n 29 (1 point)
Refer to Exhibit 17-3
3 Assume th
hat the startin
ng point on tthe production function is point A. After
an increaase in the quaantity of labor, there would be a _________________________ which wouuld
shift the LRAS curvee from LRAS
S1 to ______
___________ resulting inn ________________..
Question
n 29 options:
mov
vement along
g the producction function
n to point C;; LRAS2; ecconomic growth

fting upward of the produ

uction functiion to point B
B; LRAS2; economic grrowth
shift
vement along
g the producction function
n to point C;; LRAS3; a shrinking ecconomy
mov
fting upward of the produ
uction functiion to point B
B; LRAS3; a shrinking eeconomy
shift
Question
n 30 (1 point)
omic growth"" is defined as an increasse in ___________ from one period to the
"Absolutte real econo
next.
Question
n 30 options:
GDP
P
Real GDP
Real GDP per person
the inflation
i
ratee