Econ Of Globalization. Spring 2008; Exam 1 Answers

Front 1

In the last 40 years (prior to the current recession), the most severe recession in
US was between

Back 1

1981-1982

Front 2

Which one of the following variables is not included in the production function?

Back 2

Inflation

Front 3

Which one of the following nations had the highest real GDP per capita in 2000,
according to recent statistics?

Back 3

Luxembourg

Front 4

In most countries, the Malthusian predictions have not been realized because

Back 4

technology is improving

Front 5

Which of the following is not one of the gains from economic growth?

Back 5

Cheap labor force

Front 6

The diminishing marginal product of capital implies:

Back 6

that additions to the capital stock produce more incremental output in poor
countries than in rich countries

Front 7

Between 1973-1992, labor input was the most important factor to explain growth
in:

Back 7

United States

Front 8

A steady state may be defined as

Back 8

a point at which the capital stock per worker is stabilized

Front 9

The FOMC (Federal Open Market Committee) moved aggressively to change the
target federal funds rate in meetings on January 22 and January 30, 2008. Which
of the following events would most likely cause the FOMC to decrease the target
federal funds rate in future meetings?

Back 9

Rising unemployment and continued weakness in consumption and
investment expenditures

Front 10

Countries with higher initial levels of GDP per capita

Back 10

should have lower subsequent growth rates

Front 11

The best long run growth strategy for developing economies is probably:

Back 11

to increase the capital stock

Front 12

All of the following statements are true, except:

Back 12

Recessions tend to last longer than expansions

Front 13

During the 20th century, convergence occurred most clearly

Back 13

within OECD countries

Front 14

What is the main reason for fast growth in Asian countries after 1950?

Back 14

Huge investment rates and high capital accumulation

Front 15

In which one of the following cases we observe an increase in productivity?

Back 15

If capital stock increases at a faster rate than labor supply

Front 16

Which statement is true when thinking of the European countries in the last 30
years?

Back 16

Central Bank kept increasing interest rates

Front 17

Which of the following is not included in Institutions:

Back 17

Years of schooling

Front 18

According to the “Too much productivity?” article, which of the following is a
potential cost of faster productivity growth?

Back 18

More job loss

Front 19

A boom phase in the economy is typically accompanied by:

Back 19

increases in macroeconomic variables such as consumption and investment

Front 20

Developed economies need to engage in research and development more than do
developing economies because developed economies

Back 20

have largely exhausted the gains from capital accumulation

Front 21

The production function of a country relates

Back 21

the capital and labor input to the output.

Front 22

The difference between real GDP and the trend real GDP is the:

Back 22

cyclical part of real GDP

Front 23

World growth data shows that from 1960 to 2000:

Back 23

a) the US and other OECD countries grew at moderate rates.

b) sub-Saharan African countries grew at low rates or declined.

c) some countries particularly East Asian countries grew rapidly.

d) All of the above

Front 24

What is the difference between Real GDP and Nominal GDP?

Back 24

Real GDP is adjusted for inflation

Front 25

Some variables that can cause differences in growth rates of income per capita or
levels of income per capita among countries are:

Back 25

a) Measures of human capital
b) Market distortions
c) Geography

d) All of the above

Front 26

Economic growth differs from business cycles in that

Back 26

economic growth is a long run phenomenon; business cycles are short term

Front 27

The 2000-2002 recession of the US economy hit the hardest:

Back 27

The technology sector

Front 28

The 1997-2006 housing boom/bubble in the US history was driven by all of the
following except:

Back 28

Expectations of permanent home price depreciation

Front 29

The period known as the Great Moderation in US is characterized by:

Back 29

Low output volatility and Low Inflation rates

Front 30

Convergence refers to:

Back 30

poorer countries growing more rapidly than rich countries

Front 31

The semi-official arbiter of when US recessions begin and end is:

Back 31

the National Bureau of Economic Research

Front 32

Which of the following is not an element of total factor productivity?

Back 32

hours worked by the labor force

Front 33

The observation that poorer nations grow more rapidly than richer ones if they
share the same steady state, and more slowly if they don’t, is known as

Back 33

conditional convergence

Front 34

The additional output produced by adding one extra unit of capital to the
production

Back 34

the marginal product of capital

Front 35

Which of the following variables typically moves in the opposite direction from
real GDP?

Back 35

the unemployment rate

Front 36

Which of the following gained the most from technological advances in the 1950-1990 period?

Back 36

Developed OECD nations

Front 37

Which one of the following statements regarding the Federal Reserve Bank is not
accurate:

Back 37

used only expansionary policies in the last 10 years

Front 38

According to the “Economic Growth in the European Union” which of the
following statements correctly describes the relationship between the level of
GDP per capita and economic growth?

Back 38

a) High GDP per capita implies a high growth rate of GDP per capita.
b) Low GDP per capita implies a low growth rate of GDP per capita.
c) Slow productivity growth implies that GDP per capita will decrease.

d) None of these statements are correct.

Front 39

A large negative output gap

Back 39

implies excessive unemployment

Front 40

According to the Solow growth model, rich countries:

Back 40

tend to grow slower than poor ones