Question 1

Which of the following best defines basic research?

Accepted Answer

A)  the search for knowledge without regard to how that knowledge will be used
B)  research that is not complex since it addresses elementary questions
C)  research that seeks to apply scientific discoveries to the development of specific products
D)  the search for knowledge to solve a particular problem
E)  the search for a cure for skin cancer

Question 2

Basic research has less immediate payoff to society but is likely to be more important than applied research in fostering long-term growth.

Accepted Answer

A) True 
 B)False

Question 3

An example of an increase in human capital would be

Accepted Answer

A)  a new machine that humans use to produce more capital
B)  an increase in wealth
C)  a more educated labor force
D)  all of the above
E)  both a and c

Question 4

The only way the standard of living can increase is for labor productivity to increase.

Accepted Answer

A) True 
 B)False

Question 5

If on-the-job experience causes labor productivity to increase, that is the result of an improvement in human capital.

Accepted Answer

A) True 
 B)False

Question 6

Human capital includes the machinery, equipment and other manufactured creations used to produce goods and services.

Accepted Answer

A) True 
 B)False

Question 7

The major industrialized country with the highest level of per capita real output in 2003 was

Accepted Answer

A)  Canada
B)  the United States
C)  Italy
D)  France
E)  Germany

Question 8

If a nation moves upward along its per-worker production function relating output per worker to capital per worker,

Accepted Answer

A)  labor productivity rises
B)  labor productivity falls
C)  the amount of capital decreases, other things constant
D)  labor input decreases
E)  none of the above

Question 9

All of the following might cause an increase in economic growth, but which would be least certain to do so?

Accepted Answer

A)  a population increase
B)  an increase in the number in the labor force
C)  an increase in the labor force participation rate
D)  an increase in the resource base
E)  technological improvements

Question 10

Which of the following is the most important backbone of market exchange?

Accepted Answer

A)  laws
B)  manners
C)  customs
D)  conventions
E)  All the answers are equally important

Question 11

In the period 1996-2010, the annual productivity growth rate has been approximately

Accepted Answer

A)  2.7 percent per year
B)  3 percent per year
C)  4.2 percent per year
D)  5 percent per year
E)  6 percent per year

Question 12

The difference between basic and applied research is that

Accepted Answer

A)  basic research does not promote resource productivity while applied research does
B)  applied research does not promote resource productivity while basic research does
C)  basic research has less immediate payoff to society than applied research typically does
D)  basic research occurs in science while applied research occurs in industry
E)  only the government promotes basic research

Question 13

What was the average yearly increase in U.S. labor productivity growth between the 1870s and the early years of the 21st century?

Accepted Answer

A)  about 1 percent
B)  about 2 percent
C)  about 5 percent
D)  about 10 percent
E)  between 0 and 1 percent

Question 14

An increase in the amount of capital per worker will

Accepted Answer

A)  increase labor productivity but not capital productivity
B)  increase capital productivity but not labor productivity
C)  increase both labor and capital productivity
D)  shift the per-worker production function upward
E)  increase total output but not the productivity levels of individual workers

Question 15

A possible downside of industrial policy is that

Accepted Answer

A)  the government cannot be trusted to identify emerging technologies
B)  markets allocate scarce resources better than governments do
C)  it could evolve into a government giveaway program
D)  money and competitive advantages could go to the politically connected
E)  All of the answers are correct

Question 16

Improvements in technology shift the per-worker production function downward.

Accepted Answer

A) True 
 B)False

Question 17

Over the past four decades, computing power has

Accepted Answer

A)  increased substantially
B)  decreased substantially
C)  remained relatively constant
D)  increased slightly
E)  decreased slightly

Question 18

Productivity is defined as

Accepted Answer

A)  the ratio of a specific measure of output to a specific measure of input
B)  the production of worthwhile goods and services
C)  the market value of goods, services, and resources produced per time period (e.g., per year) 
D)  the average input divided by average output
E)  total input divided by average output

Question 19

Labor productivity in the United States has been

Accepted Answer

A)  growing at ever-increasing rates since World War II
B)  growing but at lower rates in the last 25 years compared to the 25 years immediately after World War II
C)  falling for the last 50 years
D)  largely unchanged over the last 50 years
E)  growing more rapidly in the last 50 years than in most other developed economies

Question 20

If population increases, which of the following must be true?

Accepted Answer

A)  GDP will increase.
B)  GDP per capita will fall.
C)  GDP must increase if the same standard of living is to be maintained.
D)  The labor force must increase if the same standard of living is to be maintained.
E)  Overall demand increases, but per capita aggregate demand remains constant.

Exam 8: Productivity and Growth

Improvements in technology shift the per-worker production function downward.

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Basic research has less immediate payoff to society but is likely to be more important than applied research in fostering long-term growth.

Correct AnswerverifiedShow Answer

A possible downside of industrial policy is that

Correct AnswerverifiedShow Answer

The difference between basic and applied research is that

Correct AnswerverifiedShow Answer

In the period 1996-2010, the annual productivity growth rate has been approximately

Correct AnswerverifiedShow Answer

The major industrialized country with the highest level of per capita real output in 2003 was

Correct AnswerverifiedShow Answer

If a nation moves upward along its per-worker production function relating output per worker to capital per worker,

Correct AnswerverifiedShow Answer

What was the average yearly increase in U.S. labor productivity growth between the 1870s and the early years of the 21st century?

Correct AnswerverifiedShow Answer

Human capital includes the machinery, equipment and other manufactured creations used to produce goods and services.

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Which of the following is the most important backbone of market exchange?

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Over the past four decades, computing power has

Correct AnswerverifiedShow Answer

If population increases, which of the following must be true?

Correct AnswerverifiedShow Answer

An increase in the amount of capital per worker will

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Labor productivity in the United States has been

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An example of an increase in human capital would be

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If on-the-job experience causes labor productivity to increase, that is the result of an improvement in human capital.

Correct AnswerverifiedShow Answer

Which of the following best defines basic research?

Correct AnswerverifiedShow Answer

The only way the standard of living can increase is for labor productivity to increase.

Correct AnswerverifiedShow Answer

Productivity is defined as

Correct AnswerverifiedShow Answer

All of the following might cause an increase in economic growth, but which would be least certain to do so?

Correct AnswerverifiedShow Answer

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