long term economic growth Mcqs
1. A combined measure of productivity that takes account of both labor and capital productivity is known as ?
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A. labour/capital productivity

B. total productivity

C. total exploitation

D. total factor productivity
2. 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-deepening, catch-up in technology

C. capital-deepening technical innovation

D. capital-widening Catch-up in technology

3. The multiplier accelerator model assumes ____ depends on ______?
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A. investment, interest rates

B. consumption expected future profits

C. stock building interest rates

D. investment expected future profits
4. The growth path resulting from technological progress for a given saving rate is known as the ?
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A. Steady state invention rate

B. Steady state level of output

C. Steady state growth path

D. teady state growth path

5. The business cycle describes fluctuations in output around the?
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A. short-run fluctuations in output

B. boom

C. recession

D. trend path of output
6. Real business cycle theory suggests that ____ not important in explaining short-term fluctuations around actual output ?
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A. aggregate demand is

B. potential output is

C. aggregate supply is

D. real variables are

7. Real business cycle theories suggest that _____ to correct departures from the desired growth path?
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A. There is a role for stabilizing output ever the business cycle

B. There is a role for supply-side policy

C. There is a role for monetary policy

D. There is a role for fiscal policy

8. Supply side policies are considered effective in ?
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A. increasing the money supply

B. reducing taxation

C. encouraging technological progress

D. Increasing government expenditure

9. The impossibility of negative gross investment provides a ______ to fluctuation in ______?
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A. floor, output

B. ceiling, stock building

C. floor, the capital-output ratio

D. ceiling, capital prices

10. The belief that the rate of growth depends upon technological progress facilitated by institutions incentives and government is known as ________ growth theory?
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A. beta

B. endogenous

C. convergence

D. exogenous

11. The percentage of the working age population that is part of the workforce is known as the ?
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A. participation rate

B. workers

C. diligent rate

D. non-slackers

12. In the neoclassical theory of growth a higher saving rate leads to ?
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A. no change in the growth rate

B. a higher growth rates

C. a fluctuating growth rates

D. a fluctuating growth rate

13. Identify below what does NOT affect productivity ?
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A. Private investment in new physical caital

B. The phase of the lunar cycle

C. Public investment in education

D. Innovation and the application of new technology

14. Economic growth may depend upon _____ and _____?
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A. Population age distribution, education

B. Population size, x-efficiency

C. Population growth education

D. Population growth technical progress
15. Policies to encourage productivity do not include ?
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A. encouraging risk-taking

B. encouraging R & D

C. encouraging innovation

D. building more retail outlets
16. The best way to achieve economic growth is to ?
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A. increase government spending

B. reduce taxation

C. increase personal consumption

D. save more
17. Governments can stimulate productivity by ?
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A. encouraging private investment

B. encouraging more labour intensive work to reduce unemployment

C. Imposing higher taxes on capital

D. reducing spending in education

18. The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows?
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A. labor growth, output

B. investment capital per person

C. saving, investment

D. capital per person, productivity

19. The business cycle is not transmitted from one country to another through ?
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A. labor supply changes

B. private sector imports and exports

C. economic policy

D. the duration of compulsory education
20. GDP per head may be an imperfect measure of economic welfare because it excludes ?
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A. Externalities

B. Change in the distribution of income

C. All of the above

D. Untraded goods

E. the value of leisure

21. Potential output can be increased by ____ or by ______?
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A. increasing the use of all inputs, technical advances

B. increasing the use of labor increasing the use of land

C. increasing the use of land increasing the use of capital

D. increasing the use of capital increasing the use of labour

22. The long run equilibrium level of national income is the level at which ?
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A. All investment is used in the manufacturing sector

B. economic growth is Zero

C. All investment is used to maintain the existing capital stock at its current level

D. Economic growth is growing

23. Identify below what is NOT considered to be a cause of economic growth ?
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A. An increase in labor productivity

B. An increase in the money supply

C. An increase in technology

D. An increase in the quantity of labor and capital

24. The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?
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A. multiplier accelerator model

B. sun spot theory

C. Solow theory

D. New classical theory

25. Real business cycles are cycles in ?
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A. real output

B. international trade

C. actual output

D. potential output
26. The golden-rule saving rate is the rate of saving that ?
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A. maximizes the level of long-run consumption

B. maximizes the level of long-run investment

C. gets the highest rate of interest

D. maximizes human capital

27. All of the following are parts of the business cycle except ?
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A. boom

B. recovery

C. slump

D. acceleration
28. Economic growth is important because ?
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A. People want a better environment

B. People want higher incomes and more consumer goods.

C. People want to be happier

D. People want less crime

29. Real business cycle theorists argue that _________ can explain short- and long-term fluctuation in output?
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A. sun spot cycles

B. imperfect labor markets

C. intertertemporal decisions of households, firms and government

D. rational expectations

30. The idea of convergence of GDP in Europe suggests that ?
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A. Poorer less developed countries will catch up with richer ones.

B. Poorer countries have higher capital/labour ratios than richer countries.

C. The gap between countries GDP per head will widen

D. All countries will eventually join the EEC