Chapter 13 Why Do Economies Grow?

| November 9, 2018

18)
Recall the application. The cultural habits of the rich filtered down through English
society. These habits included all of the following virtues EXCEPT
A)
thrift.
B)
prudence.
C)
hard work.
D)
impulsive behavior.

19)
Recall the application. The cultural changes in England allowed individuals to
take advantage of
A)
new developments in science and technology.
B)
the increase in agrarian lifestyles.
C)
the decrease in population caused by the number of citizens who were leaving
for the New World.
D)
the elimination of trade barriers resulting from the formation of the European
Union.

20)
Recall the application. The differential survival of the wealthy created an
environment
A)
which allowed for economic growth.
B)
which caused increased class warfare.
C)
where lower-class people could no longer afford to live in the country.
D)
that directly led to the demise of the British monarchy.

21)
A example of a topic studied in the field of new growth is how incentives for
________ interact with the accumulation of physical capital.
A)
research and development
B)
new product development
C)
international trade
D)
all of the above

22)
The idea that investment in comprehensive education in developing countries
leads to permanent increases in the rate of technological progress is an
example of
A)
increasing economic inequality.
B)
capital deepening.
C)
new growth theory.
D)
a trade-off between human capital and technology.

23)
A defining feature of new growth theory is that it involves economic models of
growth which account for
A)
population increases.
B)
technological progress.
C)
political changes.
D)
capital flight.

24)
Models of growth that account for technological progress are part of
A)
creative destruction theory.
B)
new growth theory.
C)
growth accounting.
D)
all of the above

25)
Innovation and incentives to come up with new products and production methods
are stifled in larger markets.

26)
In larger markets, the quest for profit by firms motivates them to be
innovative and produce new and more appealing products.

27)
Human capital includes investments in education and skills.

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