Final Review, MC Flashcards by k vg

In A Farewell to Alms there is only one significant event in world economic history. This is:

The Industrial Revolution

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The Neolithic Revolution consisted of what major transformation

The adoption of settled agriculture

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How many years was the gap between the Neolithic and the Industrial Revolutions

8,000

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. What happened in the Neolithic Revolution?

Development of settled agriculture

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What facts do we need to know to estimate the long run rate of technological advance in the Malthusian era?

Rate of population growth, and the share of land in national income

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World Population rose from 7 m circa 10,000 BC to 770 million by 1750. That implied an
average population growth rate over this interval of 0.04%. What, roughly was the implied rate of technological advance per year over these 12,000 years.

0.01%

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Wildebeest graze on the African Savannah. The amount of grass per square mile depends positively on the amount of rain. Suppose it became wetter on the African Savannah because of climate change. What would be the long run effect on the amount of grass each wildebeest got to eat?

No change

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Suppose an additional 10% of the Wildebeest population is culled by hunters each year. What would be the long run effect on the amount of grass each wildebeest got to eat?

Increase in grass per Wildebeest

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Suppose there are equal numbers of male and female Wildebeest, and each female gives birth to a calf each year. What is life expectancy at birth for Wildebeest, in years?

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Which pre-industrial society was notable for both its low real income levels, and its high
levels of personal hygiene?

Japan

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Suppose 50% of adults in a pre-industrial society do not know their age. What percent of reported ages in a census will likely end with a 0 or a 5?

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Suppose a modern economy experiences real wage growth rates of 2% a year. What is a rough estimate of the rate of technological advance in the economy?

1.4%

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Life expectancy for women at birth is now typically 6 years more than that for men. In preindustrial Europe men and women at birth had the same life expectancy. What likely accounts for this difference?

A Infanticide of girls in early Europe
B Male deaths through violence in warfare
C Killings of women accused of being witches
D Deaths of women in pregnancy
E Less ability of women to withstand periodic famines

Deaths of women in pregnancy

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In the Malthusian world the average women had 2 children who survived until adulthood.
The Total Fertility Rate in pre-industrial Europe, the average number of births a woman would have if she lived to 50, was 4.9. 3 of these 4.9 children survived until adulthood. What explains this apparent contradiction?

A Pre-Industrial Europe was not a Malthusian economy
B Not all women in Europe married
C Many women did not survive until age 50
D The average woman did not marry till age 25
E There were few births outside marriage

Many women did not survive until age 50

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Malthus published his Essay on a Principle of Population in 1798. By this time the Industrial Revolution was already well under way in England. Why were his doctrines not immediately rejected?

No-one in England in 1798 knew the Industrial Revolution had begun

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Who was Samuel Pepys?

Public servant in London, kept diary 1660s

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Which of the following was typically a significant economic failure of pre-industrial
societies?

A High inflation rates
B High levels of government debt
C High rates of taxation
D Restrictive regulations on the labor market
E Absence of property rights in knowledge

Absence of property rights in knowledge

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Suppose a surname Neville was held only by rich people in England in 1300. Suppose it was held by 0.1% of the population. Based on the Malthusian model, what fraction of the population would we expect now to have the surname Neville?

More than 0.1%

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Suppose there was complete long run social mobility in England. What would we expect the average economic status of the “Nevilles” to be now?

A Still above the mean
B At the mean
C Below the mean
D Cannot predict
E Among the wealthiest people

At the mean

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Which of the following sectors of the economy contributed most to productivity growth in England in the Industrial Revolution?

A Textile production
B Iron and Steel
C Steam engines
D Railways
E Coal mining

Textile production

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What was the relative wage of a carpenter compared to a laborer in England in 1300?

2.25

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What was the relative wage of a carpenter compared to a laborer in England in 2000?

1.3

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. Why does it seem that if an Industrial Revolution had not occurred in Europe in 1800 it would have eventually occurred elsewhere?

A Other places than England had coal deposits
B India had lots of cotton
C Asian societies such as Japan were changing in similar ways to preindustrial England in the years 1600-1850
D Japan in 1800 was economically identical to England in 1800
E China was experiencing rapid technological change in the years 1750-1850

Asian societies such as Japan were changing in similar ways to pre-industrial England in the years 1600-1850

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Suppose that the share of capital rentals in an economy is 0.3, and the share of wages 0.7. Suppose also that output prices are increasing at 2% a year, while capital rental costs are increasing at 2%, and wage as 5%. What is the implied rate of efficiency advance in the economy?

A 2.1%
B 2%
C 1.8%
D 1.4%
E 1.2%

2.1%

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Suppose the rate of growth of real income per person in a modern economy is 4%. What is the likely rate of growth of the real capital stock per person? ``` A 0% B 1% C 2% D 3% E 4% ```

Who has gained most from technological advances since the Industrial Revolution? ``` A Unskilled labor B Skilled labor C Capital owners D Farmland owners E Innovators ```

Unskilled labor

How many years(roughly) after the onset of the Industrial Revolution did the Demographic Transition appear?

120

Life expectancy at birth in the Malthusian world was (approximately)? (Hint – the birth rate was about 30 per thousand).

6. England in 1800 had the same birth rate as modern hunter gatherer societies. How did real living conditions in England likely compare to those in modern hunter gatherer societies?

They were likely worse in England because the English worked longer hours

Which of the following was allegedly unknown to the Ancient Romans and Greeks ``` The alphabet B. Numbers C. The wheel D. Glass E. The windmill ```

The windmill

We believe that either capital investment or productivity advances is the basic source of growing income per person since the Industrial Revolution because...? A.There are no other possible sources of income growth per person. B. Technological advances are generated by investment. C. Interest rates have fallen from the period before the Industrial Revolution. D. High income economies have both a lot of capital per person and high productivity levels. E. There are external benefits from investing in capital.

High income economies have both a lot of capital per person and high productivity levels.

By 1850 Britain is estimated to have produced 2/3 of world coal output, ½ of cotton textiles, and ½ of iron output. What was Britain’s share (roughly) in 1850 of world population?

Which of the following features of the English economy did NOT change significantly in the years 1200-1800? ``` A Interest rates B Murder rates C Literacy D Work hours E Life expectancy at birth ```

E Life expectancy at birth

Richer men had many more surviving children than poorer men in England in the years 1250 to 1800. The effect of this on the English economy was...? A Strong downward mobility by the children of richer men into lower status occupations B Strong population growth in the years 1250-1800 C Great increases in average wealth levels 1250-1800 D Substantial declines in wages 1250-1800 E A declining share of the population in lower status occupations

Strong downward mobility by the children of richer men into lower status occupations

In a world of perfect capital mobility what share of the differences in income per person across economies is ultimately explained by differences in capital stocks? ``` A. 100 B. 0 C. 25 D. 50 E. 75 ```

B. 0

Suppose that the growth rate of the capital stock in the US increased by 2% per year. If the growth rate of the labor supply is 3%, and the share of capital in national income is 0.25, while the share of labor is 0.75, what is the increase in the growth rate in income per person? ``` A. -1% B. 2% C. 1.5% D. 0.5% E. 0% ```

.5%

Growth accounting suggests that productivity advance, as opposed to capital accumulation, explains most income growth since the Industrial Revolution. This is puzzling to economists because... A. There is little sign of crowding out in the Industrial Revolution period. B. The rate of return on capital is the same now as in 1760. C. We believe technology was improved mainly through investment in finding new techniques D. Huge amounts of capital have been invested since the Industrial Revolution E. Technology develops through natural selection mechanisms.

We believe technology was improved mainly through investment in finding new techniques

Why did people traditionally expect that an agricultural revolution accompanied the Industrial Revolution? A. Because of the mechanization of threshing and grain harvesting B. Because the sizes of animals brought to sale in the London markets increased from 400 lbs in 1760 to 1000 lbs in 1860 C. Because incomes per person had increased and the income elasticity for food demand was 0.65. D. Because of the Enclosure Movement. E. Because of the discovery of the importance of nitrogen in crop growth by Baron Leibig in the 1840s

Because incomes per person had increased and the income elasticity for food demand was 0.65.

The Industrial Revolution does not seem to explain the “Demographic Revolution” that occurred in England at the same time. This is because: A. The average age of marriage fell as much in agricultural parishes as in manufacturing parishes. B. Population grew because women married at younger ages. C. Population grew because more women got married. D. There was not much demand for labor since machines displaced people in the Industrial Revolution. E. The “demographic revolution” did not begin till 1800.

A. The average age of marriage fell as much in agricultural parishes as in manufacturing parishes.

Within advanced economies such as the UK income inequality is likely much less than in the Malthusian era because... A. B and C B. Wages are a larger share of national income than in the years before 1800 C. The premium for skills in the labor market declined since 1800 D. More people have education E. B and D

A. B and C B. Wages are a larger share of national income than in the years before 1800 C. The premium for skills in the labor market declined since 1800

What has happened to the real rents of farmland in England since the 1760s? A. Much lower in 2000 only on grain growing land. B. Much lower in 2000 than in 1760s C. Much higher in 2000 than in the 1760s D. About the same in 2000 as in the 1760s E. Much lower in 2000 only in the north of the country.

About the same in 2000 as in the 1760s

Which of the following combinations of countries are low income tax countries among modern developed economies. ``` A. Japan and Belgium B. Denmark and Sweden C. USA and Sweden D. UK and Sweden E. Japan and USA ```

Japan and USA

If wage earners were rational economic actors a gift to everyone of the same amount collected by the government in taxes on wages would have what effect on the hours of work A. Decrease work hours if the recipient was male. B. Increase work hours C. Stay the same D. Decrease work hours E. Increase work hours if the recipient was male.

Decrease work hours

The Malthusian Era denotes which period in world history? ``` A. 1 AD – 1800 AD B. 2000 BC – 1700 AD C. 10,000 BC – 1750 AD D. Neolithic Revolution to the Industrial Revolution E. 250,000 BC – 1800 AD ```

E. 250,000 BC – 1800 AD

What was the principal effect of the Neolithic Revolution, the arrival of settled agriculture, around 8,000 BC on human societies?

Greater population densities

Work hours for men seem to have increased between the Neolithic Revolution and the Industrial Revolution. Assuming this rise was from 6 to 9 hours per day. What effect did this have on material living standards? ``` A. They stayed the same B. They declined, but by less than 50% C. They declined by 50% D. They increased by 50% E. They increased, but by less than 50% ```

They stayed the same

Hunter-gatherer societies before the Neolithic Revolution probably had many more violent deaths than agrarian economies on the eve of the Industrial Revolution. How do we know this? A. Observations of modern hunter-gatherer groups B. Skeletal evidence on causes of death C. Cave paintings depicting battles D. Observations of modern hunter-gatherers, plus skeletal evidence E. Skeletal evidence, plus cave paintings.

Observations of modern hunter-gatherers, plus skeletal evidence

Some sub-Saharan African societies still have birth rates of 50 per thousand of population. What would like expectancy be for such societies in the Malthusian era? ``` A. 20 B. 25 C. 30 D. 40 E. 50 ```

How many years(roughly) after the onset of the Industrial Revolution did the Demographic Transition appear?

120

``` Who were the tallest people observed in the world before 1800? A. Danes B. Stone Age Europeans C. Sub SaharanAfricans D. Polynesians E. Japanese ```

D. Polynesians

``` What were Japanese material living standards relative to those of England around 1800? A. 100% B. 75% C. 67% D. 33% E. 150% ```

D. 33%

``` Before 1860, when were English material living conditions at their maximum? A. 1315 B. 1450 C. 1689 D. 1798 E. 1209 ```

B. 1450

The Malthusian model we have studied assumes that birth rates increase with income before 1800. Suppose birth rates were unchanged with income. This would imply... A. Technological change could improve living standards before 1800. B. Increases in mortality would improve incomes and leave life expectancy unchanged. C. Life expectancy before 1800 would be 50 or more. D. Real incomes would even lower than observed before 1800. E. There would no longer be a subsistence income in the pre-industrial world.

Increases in mortality would improve incomes and leave life expectancy unchanged.

Smallpox was a major killer of children in England before 1800. Smallpox vaccination was introduced in 1796. Suppose the Industrial Revolution had not occurred. The long run effect of this would have been... A. Life expectancy same, wages fall, population grows. B. Life expectancy same, wages fall, population the same C. Life expectancy increases, wages fall, population grows. D. Life expectancy increases, wages fall, population the same E. Life expectancy same, wages same, population grows.

Life expectancy increases, wages fall, population grows.

With unrestricted fertility it is possible for total fertility rates for women to be as high as 10 births per woman. For most Malthusian economies the total fertility rate was much lower. It was typically... ``` A. 3 B. 4 C. 5 D. 6 E. 2 ```

C. 5

A number of features characterized the reproduction pattern in pre-industrial East Asia. Which of the following is NOT one of them? A. Almost all women married. B. Birth spacing within marriage was much longer than in northern Europe. C. Most women were married by age 20. D. Married women deliberately controlled fertility to achieve a target family size. E. A substantial fraction of men never married.

D. Married women deliberately controlled fertility to achieve a target family size

In a Malthusian Economy what is the long run effect of a tax on wages to fund wars? ``` BirthRate Death Rate Population A. Same Increases Falls B. Same Increases Increases C. Falls Falls Increases D. Falls Same Falls E. Same Same Falls ```

E. Same Same Falls

We know that the peoples of the America’s were much less technologically advanced than the invading Europeans circa 1500 because A. The Aztecs practiced human sacrifice B. Cortez and a small band of Spaniards were able to conquer the entire Aztec Empire in 1519 C. There were only about 25 million people in the whole of the Americas in 1492, compared to more than 400 million in Europe and Asia. D. The Incas had no written language E. Mayan pyramids were very similar to those of the Ancient Egyptians

There were only about 25 million people in the whole of the Americas in 1492, compared to more than 400 million in Europe and Asia.

In a Malthusian economy, fertility is unregulated and the death rate is 50 per 1000. In the long run how many children per woman survive to adulthood?

. Suppose the observed death rate in (13) drops to 40 per thousand. In the LONG run how many children per woman will now survive to adulthood? ``` A. 4 B. 2 C. 1.33 D. 1 E. 6 ```

Hours of work seem to have varied across early societies. What were the average number of hours of work per day (averaged across the whole year) for adult males in London in 1800?

Tahiti was not discovered by Europeans until 1767. The discovery caused sensation in Europe because A. Tahitians practiced human sacrifice B. Tahitians had better material living conditions than the French or English C. Tahiti was ruled by Amazon women warriors D. Tahitians had not discovered iron E. Tahitians had no written language

Tahitians had better material living conditions than the French or English

Work hours for men seem to have increased between the Neolithic Revolution and 1800. This rise was from 6 to 9 hours per day, and was completed well before 1800. What effect would we expect this had on material living standards in 1800? A. They stayed the same B. They declined by 50% C. They declined, but by less than 50% D. They increased by 50% E. They increased, but by less than 50%

They stayed the same

The Malthusian Era denotes which period in world history? A. 1 AD – 1700 AD B. Commercial Revolution to the Industrial Revolution C. Neolithic Revolution to the Industrial Revolution D. 1 AD – 1800 AD E. 250,000 BC – 1800 AD

E. 250,000 BC – 1800 AD

Suppose the decline in fertility was caused by a shift downwards in the fertility schedule. What happens to the real wage in the long run as a result of this decline in fertility? A. Stays the same. B. Decreases if the death rate stays the same. C. Increasesif the death rate stays the same. D. Decreases. E. Increases

E. Increases

Some sub-Saharan African societies still have birth rates of 50 per thousand of population. What would life expectancy at birth be for such societies in the Malthusian era? A. 40 B. 25 C. 20 D. 30 E. 50

``` The average height of males in England in 1800 was 66”. What height would we expect males to have been in Roman England, AD 43-410? A. 70” B. 66” C. 64” D. 62” E. 58” ```

66”

The Chinese and Japanese seem to have been poorer than people in northwest Europe in 1800. Which of the following suggests that this difference in living standards had persisted for thousands of years. A. The low average heights of Japanese men in 1870 compared to Europe B. The low levels of lactose and alcohol tolerance in people in Japan and China C. The low level of real wages Japanese men in 1800 compared to Europe D. The high population densities in Japan and China E. The low rates of technological advance in Asia before 1800

The low levels of lactose and alcohol tolerance in people in Japan and China

``` What was the principal effect of the Neolithic Revolution, the arrival of settled agriculture, around 8,000 BC on human societies? A. Greater population densities B. Lower incomes C. Higher incomes D. Shorter life expectancies E. Longer life expectancie ```

Greater population densities

Equations for the Malthusian Model

B = D = 1 / Eo Eo is life expectancy at birth

Malthusian Model Name the vertical axis Name the horizontal axis

Vert: B,D on top graph and Population (N) on lower Hor: Income (y)

Basic Assumptions for Growth Accounting

o Competitive Economy | o No Externalities

There are three types of theories of the Industrial Revolution. Name them.

Exogenous Growth Endogenous Growth Multiple Equalibriums

Exogenous Growth

• Exogenous Growth Theories: believes that for the first time proper incentives were set out to motivate innovation which spurred the IR. o Considers proper economic institutions to have been lacking in pre-1800 world. E.g., no patents. o No sign of any improvement in the appropriability of knowledge until long after the IR was well underway  Idea built on fallacy that world was entirely wild in pre-1800: crazed Viking, etc. no time or motivation to innovate o No evidence that institutions can, in the long run, be a determining factor in the operation of economies. Institutions are driven by fundamental economic factors not the other way around. Inefficient institutions are overthrown in favor of more efficient ones.  People are clever, religious fanatics prevent “usury” – found clever ways around it.  Fails to address why the proper institutions occurred in 1800 and not sooner.

Endogenous Growth

• Endogenous Growth Theories o Social institutions / incentives are the same across all societies  Random probability of each to come up with great idea. • Low pop = low Gy  Huge pop. growth in 1800 thus IR • Pop density increased, spill over learning • Not perfect infidelity of growth rate to scale of population

Multiple Equilibrium Theories

• Multiple Equilibrium Theories, disease, war, conquest over time “shocked” the world into modernity. o Human Capital – lower infant mortality rates thus fewer children = more resources devoted to child rearing. “Higher quality people.”  Too vague, why now? Switch in economic driver.  Timing issues of demographic transitions after IR (USA 1890)