Long Term Economic Growth MCQs

Option A: There is a role for fiscal policy

Option B: There is a role for monetary policy

Option C: There is a role for supply-side policy

Option D: There is a role for stabilizing output ever the business cycle

Correct Answer: There is a role for stabilizing output ever the business cycle ✔

Option A: ceiling, stock building

Option B: ceiling, capital prices

Option C: floor, output

Option D: floor, the capital-output ratio

Correct Answer: floor, output ✔

Option A: consumption expected future profits

Option B: investment, interest rates

Option C: investment expected future profits

Option D: stock building interest rates

Correct Answer: investment expected future profits ✔

Option A: boom

Option B: slump

Option C: recovery

Option D: acceleration

Correct Answer: acceleration ✔

Option A: trend path of output

Option B: boom

Option C: recession

Option D: short-run fluctuations in output

Correct Answer: trend path of output ✔

Option A: saving, investment

Option B: capital per person, productivity

Option C: labor growth, output

Option D: investment capital per person

Correct Answer: investment capital per person ✔

Option A: the value of leisure

Option B: Externalities

Option C: Untraded goods

Option D: Change in the distribution of income

Correct Answer: All of the above ✔

Option A: Imposing higher taxes on capital

Option B: encouraging more labour intensive work to reduce unemployment

Option C: reducing spending in education

Option D: encouraging private investment

Correct Answer: encouraging private investment ✔

Option A: total exploitation

Option B: labour/capital productivity

Option C: total factor productivity

Option D: total productivity

Correct Answer: total factor productivity ✔

Option A: endogenous

Option B: exogenous

Option C: beta

Option D: convergence

Correct Answer: endogenous ✔

A. Steady state growth path
B. Steady state invention rate
C. Steady state level of output
Unsteady state growth path

Correct Answer: Steady state growth path ✔

Option A: economic growth is Zero

Option B: All investment is used in the manufacturing sector

Option C: Economic growth is growing

Option D: All investment is used to maintain the existing capital stock at its current level

Correct Answer: All investment is used to maintain the existing capital stock at its current level ✔

Option A: increase government spending

Option B: reduce taxation

Option C: save more

Option D: increase personal consumption

Correct Answer: save more ✔

Option A: All countries will eventually join the EEC

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

Option C: The gap between countries GDP per head will widen

Option D: Poorer less developed countries will catch up with richer ones.

Correct Answer: Poorer less developed countries will catch up with richer ones. ✔

Option A: imperfect labor markets

Option B: rational expectations

Option C: intertertemporal decisions of households, firms and government

Option D: sun spot cycles

Correct Answer: intertertemporal decisions of households, firms and government ✔

Option A: private sector imports and exports

Option B: economic policy

Option C: the duration of compulsory education

Option D: labor supply changes

Correct Answer: the duration of compulsory education ✔

Option A: potential output

Option B: actual output

Option C: real output

Option D: international trade

Correct Answer: potential output ✔

Option A: aggregate supply is

Option B: aggregate demand is

Option C: potential output is

Option D: real variables are

Correct Answer: aggregate demand is ✔

Option A: sun spot theory

Option B: multiplier accelerator model

Option C: Solow theory

Option D: New classical theory

Correct Answer: multiplier accelerator model ✔

Option A: capital-widening technical innovation

Option B: capital-widening Catch-up in technology

Option C: capital-deepening technical innovation

Option D: capital-deepening, catch-up in technology

Correct Answer: capital-deepening, catch-up in technology ✔

Option A: Population size, x-efficiency

Option B: Population age distribution, education

Option C: Population growth technical progress

Option D: Population growth education

Correct Answer: Population growth technical progress ✔

Option A: a higher growth rates

Option B: a fluctuating growth rate

Option C: a fluctuating growth rates

Option D: no change in the growth rate

Correct Answer: no change in the growth rate ✔

Option A: increasing the use of labor increasing the use of land

Option B: increasing the use of capital increasing the use of labour

Option C: increasing the use of land increasing the use of capital

Option D: increasing the use of all inputs, technical advances

Correct Answer: increasing the use of all inputs, technical advances ✔

Option A: Increasing government expenditure

Option B: reducing taxation

Option C: increasing the money supply

Option D: encouraging technological progress

Correct Answer: encouraging technological progress ✔

Option A: Public investment in education

Option B: Innovation and the application of new technology

Option C: The phase of the lunar cycle

Option D: Private investment in new physical caital

Correct Answer: The phase of the lunar cycle ✔

Option A: building more retail outlets

Option B: encouraging risk-taking

Option C: encouraging innovation

Option D: encouraging R & D

Correct Answer: building more retail outlets ✔

Option A: workers

Option B: non-slackers

Option C: diligent rate

Option D: participation rate

Correct Answer: participation rate ✔

Option A: gets the highest rate of interest

Option B: maximizes the level of long-run investment

Option C: maximizes the level of long-run consumption

Option D: maximizes human capital

Correct Answer: maximizes the level of long-run consumption ✔

Option A: An increase in the quantity of labor and capital

Option B: An increase in labor productivity

Option C: An increase in the money supply

Option D: An increase in technology

Correct Answer: An increase in the money supply ✔

Option A: People want less crime

Option B: People want to be happier

Option C: People want a better environment

Option D: People want higher incomes and more consumer goods.

Correct Answer: People want higher incomes and more consumer goods. ✔