Question 1

An increase in the quality of capital is a result of

Accepted Answer

Embodied technical change refers to improvements in the quality of capital goods themselves, such as the development of new and better machinery. Therefore, an increase in the quality of capital is a result of embodied technical change rather than population growth, disembodied technical change, or an increase in the labor force.

Question 2

Suppose that growth in output that can be attributed to growth in labor and capital is 6%. If output grows at a rate of 6%, it must be the case that

Accepted Answer

If output growth is entirely attributed to growth in labor and capital, it implies there is no additional growth from technological progress or improvements in efficiency.

Question 3

A researcher discovered the adhesive that allows a piece of paper to be attached to a surface temporarily and then removed and reattached many times. It was many years before a use was found for this adhesive. Which of the following is true?

Accepted Answer

The initial discovery of the adhesive represents an invention, as it is a new creation with no prior existence. The finding of a use for the adhesive represents an innovation, as it involves applying the invention in a new and useful way.

Question 4

Related to the Economics in Practice on p. 304: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, its best strategy would be to

Accepted Answer

Countries far from the technological frontier benefit from adopting other countries' policies initially due to the catch-up effect. As they approach the frontier, where the potential for catch-up diminishes, shifting focus to supporting their own innovative efforts becomes more beneficial to sustain growth and competitiveness.

Question 5

Which of the following caused the productivity problem of the 1970s in the U.S.?

Accepted Answer

All three factors (low saving rate, increased governmental regulations, and low spending on research and development) contributed to the productivity problem of the 1970s in the U.S. Low saving rates led to a shortage of capital for investment, increased governmental regulations added to the costs of doing business, and low spending on research and development limited innovation and technological advancement, all of which resulted in lower productivity growth.

Question 6

Which of the following was not one of the likely causes of the productivity problem in the 1970s?

Accepted Answer

High saving rates would typically lead to higher investment spending, which would increase productivity. Therefore, high saving rates were not a likely cause of the productivity problem in the 1970s.

Question 7

Suppose that growth in output that can be attributed to growth in labor and capital is 2%. If output grows at a rate of 5%, it must be the case that

Accepted Answer

The difference between the total output growth (5%) and the growth attributed to labor and capital (2%) suggests that the additional growth is due to factors other than labor and capital, such as technological progress. This is known as growth in total factor productivity.

Question 8

Thinking up a new idea is an example of

Accepted Answer

Thinking up a new idea is an example of an invention, which involves creating something entirely new or novel that did not exist before.

Question 9

Related to the Economics in Practice on p. 308: The emigration of Jewish scientists from Germany to the United States in the late 1930s and early 1940s is an example of a(n) ________ in the United States.

Accepted Answer

The emigration of Jewish scientists from Germany to the United States in the late 1930s and early 1940s led to an increase in the human capital of the United States. These scientists contributed to the development of various fields, including physics, chemistry, and engineering, leading to significant technological advancements in the United States.

Question 10

A firm used to produce a product using three units of labor and one unit of capital. The firm discovers that it can produce more output at a lower cost if it combines two units of labor with two units of capital. This is an example of

Accepted Answer

An innovation is a new idea, method or device that is introduced and brings about a change in the way things are done. In this case, the firm has discovered a new way to produce its product that is more efficient and cost-effective.

Question 11

Which of the following could result in negative disembodied technical change?

Accepted Answer

All of the options listed could potentially result in negative disembodied technical change. Environmental regulations may restrict the use of certain materials or processes, making innovation more difficult. Health and safety regulations could require additional equipment or processes to be implemented, increasing costs and hindering innovation.

Question 12

Embodied technical change is one reason why

Accepted Answer

Embodied technical change refers to the type of technological advancement that is incorporated into capital goods such as machinery, equipment, and buildings, as well as into the skills, knowledge, and education of workers. This type of technical change has been linked to increases in labor productivity over time. Therefore, choice C is the best answer. Human capital (choice A) is indeed more valued than physical capital in economies that have undergone embodied technical change, but this statement alone does not provide a comprehensive answer. Choice B is incorrect because embodied technical change typically results in an increase in the quality of capital rather than a decrease. Choice D is irrelevant to the topic of embodied technical change.

Question 13

Technical change which results in a change in the production process is known as

Accepted Answer

The answer of Technical change which results in a change...

Question 14

Which of the following is not an investment in human capital?

Accepted Answer

Increasing the level of unemployment benefits is not an investment in human capital as it does not provide any training or education to individuals to enhance their skills and productivity. Instead, it provides temporary financial assistance to those who are unemployed. Investments in human capital involve activities that improve an individual's knowledge, skills, and abilities, such as vocational training programs, on-the-job training, and improving access to healthcare.

Question 15

Higher energy prices in the 1970s reduced labor productivity because

Accepted Answer

The rise in energy prices during the 1970s led to significant investments in making the existing capital stock more energy-efficient. This shift was a direct response to the higher costs of energy, as firms sought to reduce their energy consumption and improve efficiency, rather than a move towards more capital-intensive techniques or a substitution effect between energy and capital.

Question 16

Which of the following was one of the likely causes of the productivity problem of the 1970s?

Accepted Answer

Low saving rates were one of the likely causes of the productivity problem of the 1970s. With low saving rates, there was less funding available for investment, which hindered productivity growth.

Question 17

Which of the following was not one of the likely causes of the productivity problem in the 1970s?

Accepted Answer

A reduction in government regulation is not a likely cause of the productivity problem in the 1970s. In fact, some argue that excessive regulation may have contributed to the problem. Reduced research and development spending, a slowdown in investment spending, and low saving rates are all commonly cited factors that could have impacted productivity during that time period.

Question 18

Any investment made in a country by residents outside that country is

Accepted Answer

Foreign direct investment is defined as any investment made by residents of one country in a foreign country, typically involving the transfer of capital, technology, and management skills. This can include investments in factories, offices, or other physical facilities as well as the acquisition of foreign firms or the establishment of joint ventures. Therefore, option A is the best choice for this definition. Option B refers to the exchange of one currency for another and is not specific to investment. Option C refers to the total investment made in a country, regardless of the source of the investment. Option D refers to the difference between a country's total exports and imports and is not specific to foreign investment.

Question 19

Which of the following is not an investment in human capital?

Accepted Answer

Investment in human capital refers to the expenditure of resources on education, training, and health to improve the productivity and capabilities of individuals. Choices A, B, and C directly involve improving skills, health, or education, which are investments in human capital. Choice D involves upgrading equipment, which is an investment in physical capital rather than human capital.

Question 20

An increase in human capital

Accepted Answer

Human capital refers to the knowledge, skills, and abilities that individuals acquire through education, training, and experience. Since human capital increases the knowledge and skills available to workers, it results in higher productivity, leading to greater output per worker. Therefore, an increase in human capital increases the productivity of labor.

Quiz 16: Long-Run Growth

An increase in the quality of capital is a result of

Suppose that growth in output that can be attributed to growth in labor and capital is 6%. If output grows at a rate of 6%, it must be the case that

A researcher discovered the adhesive that allows a piece of paper to be attached to a surface temporarily and then removed and reattached many times. It was many years before a use was found for this adhesive. Which of the following is true?

Related to the Economics in Practice on p. 304: According to a study cited in the Economics in Practice, if a country is relatively far from the technological frontier of the rest of the world, its best strategy would be to

Which of the following caused the productivity problem of the 1970s in the U.S.?

Which of the following was not one of the likely causes of the productivity problem in the 1970s?

Suppose that growth in output that can be attributed to growth in labor and capital is 2%. If output grows at a rate of 5%, it must be the case that

Thinking up a new idea is an example of

Related to the Economics in Practice on p. 308: The emigration of Jewish scientists from Germany to the United States in the late 1930s and early 1940s is an example of a(n) ________ in the United States.

A firm used to produce a product using three units of labor and one unit of capital. The firm discovers that it can produce more output at a lower cost if it combines two units of labor with two units of capital. This is an example of

Which of the following could result in negative disembodied technical change?

Embodied technical change is one reason why

Technical change which results in a change in the production process is known as

Which of the following is not an investment in human capital?

Higher energy prices in the 1970s reduced labor productivity because

Which of the following was one of the likely causes of the productivity problem of the 1970s?

Which of the following was not one of the likely causes of the productivity problem in the 1970s?

Any investment made in a country by residents outside that country is

Which of the following is not an investment in human capital?

An increase in human capital