Question 1

By comparison to U.S.labor market policies,European labor market policies promote

Accepted Answer

European labor market policies often emphasize job security and social safety nets, which can lead to higher unemployment rates compared to the U.S., where labor markets are more flexible.

Question 2

Which of the following supports the skeptics doubts about the idea that a "New Economy" had emerged in the late 1990s?

Accepted Answer

The fact that investment in computer equipment turned to negative growth supports the skeptics' doubts about the "New Economy" because it suggests that the supposed technological innovation and increased productivity may have been inflated or unsustainable.

Question 3

Which of the following is NOT one of the economic problems that the "New Economy" is alleged to have solved?

Accepted Answer

The "New Economy" was often credited with addressing issues like slow growth in productivity, the budget deficit, and the business cycle, but deflation was not typically considered one of the problems it solved.

Question 4

The labor supply shock hypothesis suggests that

Accepted Answer

The labor supply shock hypothesis posits that slow real wage growth and slow productivity growth are simultaneously determined by the labor market system, indicating a relationship between the two rather than a one-way causation.

Question 5

Which of the following was given as a reason to doubt the idea of "New Economy"?

Accepted Answer

The answer of Which of the following was given as...

Question 6

The U.S.record is superior to that of Europe in ________.

Accepted Answer

The answer of The U.S.record is superior to that of...

Question 7

The idea of a "New Economy" driven by hi-tech equipment such as computers,cell phones,and the World Wide Web was rooted in part in the apparent simultaneous reversal of which of the following economic problems?

Accepted Answer

The "New Economy" concept was associated with the reversal of multiple economic issues, including inflation, slow productivity growth, and budget deficits, due to the impact of high-tech advancements.

Question 8

The relative flexibility of the United States labor market explains why ________ in the United States than in Europe.

Accepted Answer

The relative flexibility of the U.S. labor market, characterized by less stringent labor laws, lower levels of unionization, and a more dynamic job creation and destruction process, contributes to greater income inequality, slower real wage growth, and lower unemployment compared to Europe. This flexibility allows for easier hiring and firing, leading to these outcomes.

Question 9

One of the shortcomings of the Solow model is that it

Accepted Answer

The Solow model assumes technological change is exogenous and freely available to all countries, which is considered a shortcoming because it does not account for the differences in countries' abilities to access, adapt, and innovate technology.

Question 10

Comparison of the European and U.S.labor markets suggests that

Accepted Answer

The comparison between European and U.S. labor markets shows that hiring workers is relatively cheaper in the U.S., the U.S. labor market is more flexible, and job security and income equality are greater in the European labor market.

Question 11

Which of the following policies have been suggested as ways to boost the growth of productivity?

Accepted Answer

All of the above policies have been suggested as ways to boost productivity growth. Tax cuts can stimulate saving and investment, reducing the budget deficit can stabilize the economy and provide an incentive for investment, increasing public investment in education can raise human capital and skill levels, and redesigning and scaling back the regulatory apparatus can reduce the burden on businesses and help them operate more efficiently.

Question 12

The key prediction of the Solow model adapted to include technological change ________ been born out,i.e.with a few exceptions convergence ________ a reality.

Accepted Answer

The Solow model, when adapted to include technological change, predicts that economies will converge in terms of per capita income levels. However, empirical evidence suggests that this convergence has not been a reality for all economies, with significant exceptions. Thus, the statement correctly filled would be "has not been born out, i.e., with a few exceptions, convergence is not a reality."

Question 13

The Solow model predicts that the standard of living in poorer nations will converge on that of richer nations through rapid capital formation that raises output per person.The introduction of technological change to the model ________ change this prediction because technology ________ assumed to be freely available to all countries.

Accepted Answer

The introduction of technological change does not change the prediction of convergence because technology is assumed to be freely available to all countries, allowing poorer nations to catch up.

Question 14

Which of the following did NOT contribute to the European experience of the past few decades where the stand of living rose more slowly than labor productivity?

Accepted Answer

Higher participation rates typically contribute to economic growth and can lead to an increase in the standard of living, rather than slowing it down.

Quiz 12: The Big Questions of Economic Growth