revision questions chapter 22 pt3

Question 1

Since 1964, the country with the highest level of real GDP per person is

Answer 1

the united states

Question 2

What has NOT been one of the primary sources of economic growth over the last 200 years?

Answer 2

Resource conservation

Question 3

The purpose of growth accounting is to determine

Answer 3

how much of GDP growth is a result of increases in capital, how much is the result of increase in labour, and how much is the result of increases in technology

Question 4

Neoclassical growth theory predicts that

Answer 4

advances in technology increase the productivity of capital, which leads to an increase in investment and rising real GDP per person.

Question 5

What is NOT a basic precondition for economic growth?

Answer 5

democracy

Question 6

What IS a basic precondition for economic growth?

Answer 6

> Markets and prices.
Property rights.
Monetary exchange.

Question 7

Classical growth theory asserts that

Answer 7

population growth is determined by the level of real wage rate.

Question 8

According to the law of diminishing returns, an additional unit of labour…

Answer 8

produces less output than the previous unit

Question 9

Experience indicates that economic growth….

Answer 9

doesn’t depend on any one particular political system

Question 10

An incentive system facilitates economic growth by

Answer 10

rewarding people for specializing in activities in which they have a comparative advantage.