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1 | |
GDP per head may be an imperfect measure of economic welfare because it excludes _________ |
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| | A) | the value of leisure |
| | B) | externalities |
| | C) | untraded goods |
| | D) | changes in the distribution of income |
| | E) | all of the above |
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2 | |
Potential output can be increased by _____________ or by ______________ |
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| | A) | increasing the use of labour, increasing the use of land |
| | B) | increasing the use of capital, increasing the use of labour |
| | C) | increasing the use of land, increasing the use of capital |
| | D) | increasing the use of all inputs, technical advances |
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3 | |
The neoclassical theory of growth identifies the steady state rate of growth as the _________ just sufficient to keep ____________ constant while labour grows |
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| | A) | saving, investment |
| | B) | capital per person, productivity |
| | C) | labour growth, output |
| | D) | investment, capital per person |
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4 | |
In the neoclassical theory of growth, a higher saving rate leads to __________ |
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| | A) | a higher growth rate |
| | B) | a fluctuating growth rate |
| | C) | a lower growth rate |
| | D) | no change in the growth rate |
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5 | |
Solow's theory of economic growth depends upon ___________ and ________ |
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| | A) | Population size, x-efficiency |
| | B) | Population age distribution, education |
| | C) | Population growth, technical progress |
| | D) | Population growth, education |
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6 | |
The possibility that one firm's investment can benefit other firms is evidence in support of ____________ |
|
| | A) | exogenous growth |
| | B) | endogenous growth |
| | C) | steady state growth |
| | D) | the Solow residual |
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7 | |
Society should undertake activities which produce negative externalities, up to the point at which ______________ |
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| | A) | net marginal benefit equals net marginal cost to society |
| | B) | economic growth remains positive |
| | C) | steady state is achieved |
| | D) | residual growth is zero |
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8 | |
The growth rates of economies tend to converge because __________ is easier when capital per worker is low and because of ______________ |
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| | A) | Capital-widening, technical innovation |
| | B) | Capital-widening, catch-up in technology |
| | C) | capital-deepening, technical innovation |
| | D) | capital-deepening, catch-up in technology |
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9 | |
If a production input is in fixed supply, growth is impossible in the long run |
|
| | A) | TRUE |
| | B) | FALSE |
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10 | |
The convergent hypothesis states that poor countries grow more slowly than average, but rich countries grow more quickly than average |
|
| | A) | TRUE |
| | B) | FALSE |
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11 | |
Theories of endogenous growth are built on increasing returns to accumulation |
|
| | A) | TRUE |
| | B) | FALSE |
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12 | |
The zero-growth proposal argues that it is best to aim for zero-growth in measured GNP to avoid environmental costs |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre