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