Question 1

What role has the proliferation of mutual funds played in economic growth?

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Question 2

Demonstrate graphically and explain verbally what would happen to output (according to the Classical growth model)if suddenly people need more food to subsist than was previously thought.

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Question 3

Saving and investment are often viewed as among the sources of economic growth.Why are saving and investment more of a challenge in developing countries than in developed countries?

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Question 4

List some examples of policies to create institutions that encourage technological innovation.

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Question 5

What is the new growth theory?

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Question 6

Demonstrate graphically the impact of technological improvements on the production function and the production possibilities frontier.

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Question 7

Demonstrate graphically and explain verbally the key differences between the Classical and new growth theories.

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Question 8

Which country ishas experiencinged higher growth per capita? Country A whose economy is growing at a 9 percent rate and whose population is growing at a 7 percent rate or country B whose economy is growing at a 2 percent rate and whose population is declining at a 1 percent rate?

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Question 9

Demonstrate graphically and explain verbally how,according to the Classical growth model,too many workers can mean that some people will starve.

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Question 10

If investment in technology is similar to investment in capital,why does new growth theory separate the two?

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Question 11

One of the predictions of the Classical growth model is that the long-run growth in per capita output disappears due to diminishing marginal productivity of labor and capital.Real world experiences suggest otherwise.Explain why.

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Question 12

What is the Classical growth model? Explain how,according to this model,saving plays a key role in growth.

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Question 13

List four categories (types)of policies designed to promote growth.

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Question 14

What are the two principal predictions of the Classical growth model? Do real world examples support these predictions? [Hint: The answers have to do with stationary state and comparisons of growth across countries]

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Question 15

While all agree that technology is important,no one is sure what are the best policies that promote technological growth.Explain why this statement is valid.

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Question 16

Country A has economic growth of 1.5% per year while country B has economic growth of 2.5% per year.How long will it take for income to double in each country?

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Question 17

What is a production function? Write out the production function used in the text and describe how it can be related to the five sources of growth.

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Question 18

Explain how free trade among nations is beneficial for economic growth.

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Question 19

Would returns to basic education (in terms of increased output)be greater in developed or developing countries? Explain.

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Quiz 9: Growth,productivity,and the Wealth of Nations