Question 1

Governments invest in infrastructure to:

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) A) and C)
F) A) and B)

Question 2

The level of savings in an economy can be:

Accepted Answer

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

Question 3

In general, the number of years it will take for income to double at the current real growth rate is approximately:

Accepted Answer

A)   70 divided by the growth rate.
B)   50 divided by the growth rate.
C)   7 times the growth rate.
D)   5 times the growth rate.E) All of the above
F) C) and D)

Question 4

Real per capital GDP in the United States is:

Accepted Answer

A)   over three times what it was a century ago.
B)   over seven times what it was a century ago.
C)   over 30 times what it was a century ago.
D)   about the same as it was a century ago.E) All of the above
F) A) and D)

Question 5

The US had a nominal GDP of 10.3 trillion dollars in 2000. If the US great at an average rate of 3.0 % per year then its compounded GDP at the end of 2015 would have been:

Accepted Answer

A)   14.7 Tr.
B)   16.0 Tr.
C)   16.3 Tr.
D)   15.6 Tr.E) C) and D)
F) A) and B)

Question 6

The input that is generally hard to measure directly and consequently can be reasonably estimated with the growth accounting equation is:

Accepted Answer

A)   technology.
B)   physical capital.
C)   labor.
D)   land.E) B) and C)
F) C) and D)

Question 7

In a given year the nominal growth rate is 7% with inflation and population growth rates of 2% and 1.2% respectively, then real growth rate of GDP per capita is:

Accepted Answer

A)   3.8%.
B)   5.0 %.
C)   5.8%.
D)   7.0 %.E) B) and C)
F) A) and B)

Question 8

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) All of the above
F) A) and B)

Question 9

Which of the following is not an example of human capital investment?

Accepted Answer

A)   A leadership training course
B)   A bachelor's degree
C)   Software with spell-check included
D)   All of these are examples of human capital investment.E) A) and C)
F) None of the above

Question 10

Physical capital is:

Accepted Answer

A)   the stock of equipment and structures that allow for the production of goods and services.
B)   the skills a human being acquires that enhances the available stock of equipment.
C)   the set of skills, knowledge, experience, and talent that determine the productivity of workers.
D)   All of these describe physical capital.E) B) and C)
F) A) and B)

Question 11

When people are educated, they become:

Accepted Answer

A)   more productive to society, because they have more skills to apply to a job.
B)   less productive to society, because they stop working while in school.
C)   less productive to society, because they require higher pay per hour.
D)   more productive to society, because they are paid more.E) None of the above
F) B) and C)

Question 12

The convergence theory suggests:

Accepted Answer

A)   that poorer countries will grow faster than rich ones.
B)   all countries eventually will experience the same rate of growth.
C)   countries may have the same rate of growth but differing levels of income.
D)   All of these are true.E) A) and D)
F) C) and D)

Question 13

The idea that governments can plan growth by setting industrial policies to encourage growth of certain industries:

Accepted Answer

A)   is a proven method for economic growth.
B)   is controversial.
C)   has worked for the majority of countries that have tried it.
D)   None of these is true.E) A) and C)
F) A) and B)

Question 14

An example of government investment in physical capital to increase business productivity is:

Accepted Answer

A)   roadways.
B)   bridges.
C)   sewer systems.
D)   All of these are examples of ways governments can increase productivity.E) A) and B)
F) None of the above

Question 15

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) A) and B)
F) A) and C)

Question 16

An example of human capital would be:

Accepted Answer

A)   your computer.
B)   your writing skills.
C)   your desk.
D)   None of these is an example of human capital.E) A) and C)
F) B) and C)

Question 17

If a country grows at an average rate of 5 % per year over a 5 year period, then its compounded growth rate over that period is roughly:

Accepted Answer

A)   27.6 %.
B)   35.0 %.
C)   32.7 %.
D)   20.5 %.E) A) and C)
F) A) and B)

Question 18

Education and training are ways to build:

Accepted Answer

A)   human capital.
B)   physical capital.
C)   technological capital.
D)   All of these could be true.E) All of the above
F) None of the above

Question 19

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) C) and D)
F) None of the above

Question 20

The convergence theory is based on the idea of:

Accepted Answer

A)   decreasing marginal returns.
B)   decreasing income per capita.
C)   increasing rates of income per capita.
D)   increasing opportunity costs.E) C) and D)
F) B) and D)

Exam 10: Economic Growth

In a given year the nominal growth rate is 7% with inflation and population growth rates of 2% and 1.2% respectively, then real growth rate of GDP per capita is:

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The idea that governments can plan growth by setting industrial policies to encourage growth of certain industries:

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Growth often requires:

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The convergence theory suggests:

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Real per capital GDP in the United States is:

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

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An example of human capital would be:

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In general, the number of years it will take for income to double at the current real growth rate is approximately:

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An example of physical capital is:

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The input that is generally hard to measure directly and consequently can be reasonably estimated with the growth accounting equation is:

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An example of government investment in physical capital to increase business productivity is:

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When people are educated, they become:

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The level of savings in an economy can be:

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Which of the following is not an example of human capital investment?

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Physical capital is:

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Governments invest in infrastructure to:

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If a country grows at an average rate of 5 % per year over a 5 year period, then its compounded growth rate over that period is roughly:

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The convergence theory is based on the idea of:

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Education and training are ways to build:

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The US had a nominal GDP of 10.3 trillion dollars in 2000. If the US great at an average rate of 3.0 % per year then its compounded GDP at the end of 2015 would have been:

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