Module 3

Question 1

The only variables that determines the level and growth of output

Answer 1

Labor and Capital

Question 2

Man made goods which are used in further production of wealth.

Answer 2

Capital

Question 3

Very large in industrial countries, explaining as much or more than 50% of economic growth in the postwar era.

Answer 3

TFP- Total Factor Productivity or multifactor productivity

Question 4

In TFP what is the formula in production function?

Answer 4

Y=f(K,L,A)

Question 5

Growth Theories

Answer 5

Keynesian Theory
Solow Model
Power Balance Theory
Structural Theory
New Growth Theory

Question 6

Give example that will include in TFP

Answer 6

Adaption of new technology
Better educated workers
Better management
Better coordination within the organization
More efficient production techniques

Question 7

Can be measured by adjusting the factor inputs and labor and capital.

Answer 7

Embodied TFP

Question 8

Cannot be measured. It has to go into the residual

Answer 8

Disembodied TFP

Question 9

2 kinds of technical progress or innovation

Answer 9

1. Embodied technical progress

2. Disembodied technical progress

Question 10

Changing nature of the inputs into the production process

Answer 10

Embodied technical progress

Question 11

Improved technology which is exploited by investing in new equipment

Answer 11

Embodied technical progress

Question 12

Relates to the way factors are combined together in the workplace such as management or organizational innovations

Answer 12

Disembodied technical progress

Question 13

Improved technology which allows increase in the output produced from given inputs without investing in new equipment.

Answer 13

Disembodied technical progress

Question 14

Limited technology, static society

Answer 14

Traditional society

Question 15

Commercial explotation of agriculture and extractive industry

Answer 15

Preconditions for take off

Question 16

Development of a manufacturing sector

Answer 16

Take-off

Question 17

Development wider industrial and commercial base

Answer 17

Drive to maturity

Question 18

Exploitation of comarative advantages in international trade

Answer 18

High Mass Consumption

Question 19

Transition triggered by external influence, interests, or markets

Answer 19

Traditional society

Question 20

Installation of physical infrastractures and emergence of social or political elite

Answer 20

Preconditions for take-off

Question 21

Investment in manufacturing exceeds 10% of national income: develope of modern, social, economic, and political institutions.

Answer 21

Take-off

Question 22

Rostow’s Stages of Growth Model

Answer 22

Traditional society- precautions for take off- take-off-drive to maturity-high mass consumption

Question 23

Growth is dependent on the rate of capital formation and the efficiency of the use of capital

Answer 23

The Harrod-Domar Model

Question 24

Dynamic version of amsimple Keynasian Model

Answer 24

The Harrod-Domar Model

Question 25

It introduces diminishing returns to capital and fouses on the long run

Answer 25

The solow model

Question 26

The higher the rate of saving, the higher the steady state level of per capita income

Answer 26

The solow model

Question 27

Emphasized explotation of poor “southern” economies by the rich industrial “northern” economies

Answer 27

Power Balance theory

Question 28

Major sectors of the economy

Answer 28

Agriculture, industry, services

Question 29

Stress the shift in output among the sectors of the economy and the rigidities that hinder them

Answer 29

Structuralist Approach

Question 30

Two sectors model of growth in LFR model

Answer 30

A modern and a traditional

Question 31

Named after three economists that developed it, is a two sector model

Answer 31

Lewis- Fei- Ranis model

Question 32

The amount per capita capital in the current period depends upon the per capita capital and the last period, the saving rate in the previous method, and the rate of population growth.

Answer 32

Solow Growth Model

Question 33

They stress the importance of of externalities and the possibility of increasing returns to scale rather than the decreasing returns to scale of the Solow Model.

Answer 33

New Growth Theories

Question 34

Soth Asia includes

Answer 34

Afghanistan, India, Bangladesh, sri lanka, nepal, bhutan, and Madlives

Question 35

Is atrade and economic policy which advocates replacing foreign imports with domestic production

Answer 35

Import Substitution Industrialization (ISI)

Question 36

Primary factors of the asian growth miracle

Answer 36

Openess
Macroeconomic stability
Labor and Market Flexibility
Education Policies

Question 37

Secondary factors of the asian growth miracle

Answer 37

Initial conditions

Sector Policies

Question 38

Outward looking policies and emphasis on exports and acquisitions of foreign technology

Answer 38

Openess

Question 39

Focused on the importance of macroeconomic policies and the role of the government

Answer 39

Macroeconomic Stability

Question 40

Is the tendency for groups to become less like other groups over time.

Answer 40

Divergence

Question 41

Predicts an increasingly uneven spatial distribution of economics activity due to economic phenomena

Answer 41

Divergence Theory