Question 1

If the pre-conditions for growth are in place,the pace of productivity growth is influenced by i.physical and human capital growth.
Ii) echnological advances.
Iii) the amount of government incentives for investment.

Accepted Answer

A)  ii only
B)  i and ii
C)  i,ii and iii
D)  ii and iii
E)  i onlyF) All of the above
G) A) and B)

Question 2

Assume the population growth rate is 2 per cent and the real GDP growth rate is 5 per cent.The change in standard of living,as measured by the growth rate in real GDP per person,is

Accepted Answer

A)  5 per cent.
B)  7 per cent.
C)  -3 per cent.
D)  3 per cent.
E)  2.5 per cent.F) D) and E)
G) B) and E)

Question 3

At its most basic level,economic growth depends on

Accepted Answer

A)  political freedom.
B)  creating the right incentives.
C)  government leadership.
D)  saving by the government.
E)  the government fixing prices to encourage stability.F) B) and E)
G) A) and D)

Question 4

To measure the change in the standard of living,it is best to use the growth rate

Accepted Answer

A)  of the price level.
B)  of real GDP per person.
C)  of the population.
D)  of real GDP.
E)  from the Rule of 70.F) B) and D)
G) B) and E)

Question 5

The new growth theory asserts that profits are

Accepted Answer

A)  not an essential component in determining whether the economy grows or not.
B)  permanent,because physical activities can be replicated.
C)  permanent,because they are derived from discoveries.
D)  an illusion,since costs are never fully covered.
E)  temporary,because the discoveries that lead to profits are eventually used by all.F) A) and B)
G) D) and E)

Question 6

The presence of an incentive system that encourages growth

Accepted Answer

A)  cannot exist in poor countries.
B)  means that the government must be a democracy.
C)  creates the right conditions for growth to occur.
D)  existed even in hunter-gatherer societies.
E)  guarantees that growth will occur.F) B) and E)
G) All of the above

Question 7

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

Accepted Answer

A)  real GDP per person
B)  real GDP
C)  capital per person
D)  population
E)  the standard of livingF) A) and D)
G) All of the above

Question 8

For a household,the opportunity cost of not working is the

Accepted Answer

A)  nominal wage rate.
B)  demand for labour.
C)  real wage rate.
D)  cost of living.
E)  price level.F) B) and C)
G) A) and E)

Question 9

Labour productivity is defined as

Accepted Answer

A)  hours of work per person.
B)  total output multiplied by the total hours of labour.
C)  real GDP per person.
D)  total real GDP.
E)  real GDP per hour of labour.F) B) and E)
G) C) and D)

Question 10

The labour market is in equilibrium whenever

Accepted Answer

A)  the nominal wage rate is increasing.
B)  the real wage rate is increasing.
C)  the nominal wage rate is not changing.
D)  the nominal wage rate is decreasing.
E)  the quantity of labour demanded equals the quantity of labour supplied.F) A) and B)
G) All of the above

Question 11

The production function displays

Accepted Answer

A)  increasing returns.
B)  diminishing returns.
C)  normal returns.
D)  real returns.
E)  average returns.F) B) and E)
G) A) and C)

Question 12

New growth theory predicts that

Accepted Answer

A)  economic growth can last indefinitely.
B)  government policies can do nothing to foster increased growth.
C)  ultimately people earn a subsistence wage.
D)  economic growth is only temporary.
E)  economic growth is eroded by changes in taxes.F) None of the above
G) C) and D)

Question 13

The total labour hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

Accepted Answer

A)  quantity of labour demanded.
B)  demand for labour.
C)  quantity of labour supplied.
D)  quantity of jobs supplied.
E)  supply of labour.F) A) and E)
G) A) and B)

Question 14

If Turkey wants to promote faster economic growth,it will need to

Accepted Answer

A)  restrict international trade to protects its own workers.
B)  promote government intervention to help markets determine incentives.
C)  promote incentive systems to encourage saving,research and development,increased trade and improved education.
D)  restrict property rights so that individuals can better share inventions.
E)  restrict economic freedom so the government has better control of markets.F) B) and D)
G) A) and C)

Question 15

New growth theory asserts that i.human capital grows because of choices.
Ii) discoveries result from choices.
Iii) competition brings profits.

Accepted Answer

A)  i only
B)  ii only
C)  iii only
D)  i and iii
E)  i and iiF) B) and D)
G) None of the above

Question 16

________ increases with education,training and job experience. i.Physical capital
Ii) Human capital
Iii) Financial capital

Accepted Answer

A)  i only
B)  ii only
C)  iii only
D)  ii and iii
E)  i,ii,and iiiF) B) and C)
G) A) and E)

Question 17

Economic freedom requires

Accepted Answer

A)  that the government be a democracy.
B)  that there are no regulations and restrictions set on businesses and households by the government.
C)  freedom to bribe government officials.
D)  the protection of private property by the rule of law.
E)  strong labour unions.F) B) and C)
G) A) and C)

Question 18

An increase in labour productivity

Accepted Answer

A)  cannot occur without a corresponding increase in employment.
B)  decreases the standard of living.
C)  generally occurs when physical capital decreases because firms must then hire more workers.
D)  increases the standard of living.
E)  might be the result of an increase in the quantity of labour.F) A) and D)
G) A) and C)

Question 19

Labour productivity is equal to the quantity of

Accepted Answer

A)  real GDP consumed by the total population in one hour.
B)  real GDP produced by one hour of labour.
C)  workers employed during one hour.
D)  workers who are gainfully employed.
E)  real GDP.F) A) and E)
G) A) and D)

Question 20

The annual growth rate of an economy is 10 per cent.The economy's GDP will double in about ________ years.

Accepted Answer

A)  14
B)  10
C)  7
D)  20
E)  12F) B) and E)
G) A) and C)

Exam 8: Economic Growth

________ increases with education,training and job experience. i.Physical capital Ii) Human capital Iii) Financial capital

Correct AnswerverifiedShow Answer

New growth theory predicts that

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To measure the change in the standard of living,it is best to use the growth rate

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New growth theory asserts that i.human capital grows because of choices. Ii) discoveries result from choices. Iii) competition brings profits.

Correct AnswerverifiedShow Answer

The labour market is in equilibrium whenever

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At its most basic level,economic growth depends on

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Assume the population growth rate is 2 per cent and the real GDP growth rate is 5 per cent.The change in standard of living,as measured by the growth rate in real GDP per person,is

Correct AnswerverifiedShow Answer

Economic growth is a sustained expansion of production possibilities measured as the increase in ________ over a given period.

Correct AnswerverifiedShow Answer

For a household,the opportunity cost of not working is the

Correct AnswerverifiedShow Answer

An increase in labour productivity

Correct AnswerverifiedShow Answer

The annual growth rate of an economy is 10 per cent.The economy's GDP will double in about ________ years.

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Labour productivity is defined as

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The presence of an incentive system that encourages growth

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Labour productivity is equal to the quantity of

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The production function displays

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If Turkey wants to promote faster economic growth,it will need to

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Economic freedom requires

Correct AnswerverifiedShow Answer

If the pre-conditions for growth are in place,the pace of productivity growth is influenced by i.physical and human capital growth. Ii) echnological advances. Iii) the amount of government incentives for investment.

Correct AnswerverifiedShow Answer

The new growth theory asserts that profits are

Correct AnswerverifiedShow Answer

The total labour hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

Correct AnswerverifiedShow Answer

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