1) If real GDP per capita doubles between 2000 and 2010, what is the average annual growth rate
of real GDP per capita?
A) 4%
B) 7%
C) 15%
Ans B
new tech.
2) An increase in inventions of new machinery, equipment, or software increases labor
productivity
True or False?
r^ —> return of lending^—> ^saving —>
Ans T
<consumption
cost of borrowing —> <investment
3) An increase in the real interest rate will decrease consumption and investment.
True or False?
Ans T
4) Which of the following is not one of the three sources of technological change?
A) additional amounts of existing capital
B) better machinery and equipment
C) increases in human capital
D) better means of organizing and managing production entrepreneur
Ans A
only physical capital affected
5) Knowledge capital is subject to the law of diminishing returns.
True or False?
Ans F
6) The economic growth model predicts that lower-income industrial countries will forever be
unable to catch up to higher-income industrial countries.
True or False?
Ans F