Master Economic Growth: Key Determinants and Policy Implications

Question 1

Which type of technological innovation holds the most potential for driving substantial economic growth?

Accepted Answer

Disruptive and transformational innovations

Answer

Incremental improvements to existing technologies

Answer

Minor adjustments and refinements to processes

Answer

Optimized techniques for resource utilization

Question 2

The government plays a multifaceted role in promoting economic growth. Which of the following is NOT a key responsibility?

Accepted Answer

Directly engaging in business activities

Answer

Providing public goods and essential services

Answer

Implementing supportive policies and regulations

Answer

Creating a favorable investment climate

Question 3

Economists commonly use which metric to measure economic growth?

Accepted Answer

Gross domestic product (GDP)

Answer

Consumer price index

Answer

Unemployment rate

Answer

Balance of trade

Question 4

Which of these government policy instruments is unconventional and sometimes used to encourage economic growth?

Accepted Answer

Industrial policy

Answer

Fiscal policy

Answer

Monetary policy

Answer

Trade policy

Question 5

According to the Solow growth model, what is NOT a primary determinant of economic growth?

Accepted Answer

Government consumption

Answer

Technological progress

Answer

Human capital

Answer

Capital stock

Question 6

Human capital refers primarily to:

Accepted Answer

The aggregate knowledge and skills of the workforce

Answer

The total hours worked by the workforce

Answer

The quality of physical infrastructure

Answer

The abundance of natural resources

Question 7

The concept of diminishing returns implies that as more of a factor of production is utilized, its:

Accepted Answer

Marginal product will eventually diminish

Answer

Marginal product will consistently increase

Answer

Marginal product will remain constant

Answer

Marginal product will become negative

Question 8

Which of the following is NOT a potential impediment to economic growth?

Accepted Answer

Favorable demographics

Answer

Political instability

Answer

Insufficient investment

Answer

Natural disasters

Question 9

Externalities are defined as:

Accepted Answer

Effects of economic activities that are not reflected in market prices

Answer

Government interventions in the economy

Answer

Innovations in the private sector

Answer

Consumer preferences

Question 10

The Phillips curve illustrates the relationship between:

Accepted Answer

Inflation and unemployment

Answer

Interest rates and foreign exchange rates

Answer

Economic growth and income inequality

Answer

Public expenditure and private investment

Question 11

How does human capital contribute to economic growth?

Accepted Answer

Human capital is a key determinant of economic growth, as it enables workers to be more productive.

Answer

Economic growth leads to an increase in human capital, as people invest more in their education and skills when the economy is growing.

Answer

Human capital and economic growth are unrelated concepts.

Answer

Human capital can only contribute to economic growth in developing countries.

Question 12

Identify the option that is NOT considered a primary determinant of economic growth.

Accepted Answer

Favorable weather conditions

Answer

Technological advancement

Answer

Human capital development

Answer

Abundant natural resources

Question 13

Describe the relationship between economic growth and living standards.

Accepted Answer

Typically, economic growth leads to improvements in living standards.

Answer

Living standards can rise even without substantial economic growth.

Answer

Economic growth and living standards are entirely unrelated.

Answer

None of the above accurately describes the relationship.

Question 14

How does the concept of sustainability relate to economic growth?

Accepted Answer

Sustainable economic growth aims to balance economic development with environmental protection.

Answer

Sustainability is fundamentally incompatible with economic growth.

Answer

Economic growth should always be prioritized over environmental concerns.

Answer

None of the above accurately describes the relationship.

Question 15

In the study of economic growth, which econometric technique is commonly used to analyze the factors that influence it?

Accepted Answer

Regression analysis

Answer

Factor analysis

Answer

Cluster analysis

Answer

Discriminant analysis

Question 16

Economic growth and income inequality: Can they coexist? Discuss the relationship between these two factors and explore whether policies can be implemented to promote both simultaneously.

Accepted Answer

Policies can be implemented to promote both economic growth and income equality simultaneously.

Answer

Economic growth and income inequality are inherently contradictory, with one inevitably leading to a decline in the other.

Answer

Income inequality is an unavoidable consequence of economic growth and cannot be mitigated through policy interventions.

Question 17

According to the Solow Growth Model, which factor is essential for continuous economic growth in the long run?

Accepted Answer

Technological progress

Answer

Government spending

Answer

Capital accumulation

Answer

Natural resource extraction

Question 18

According to the concept of conditional convergence, what is likely to happen to the income gap between developed and less developed countries?

Accepted Answer

It will narrow if the less developed countries implement appropriate policies.

Answer

It will remain constant over time.

Answer

It will widen regardless of the policies adopted.

Question 19

Which of the following is a potential negative externality of economic growth?

Accepted Answer

Environmental pollution

Answer

Technological innovation

Answer

Improved healthcare

Question 20

What is the primary objective of government policies designed to foster economic growth?

Accepted Answer

To increase the overall output and economic well-being of the population.

Answer

To promote price stability.

Answer

To reduce unemployment.

Question 21

What is the fundamental difference between extensive and intensive economic growth?

Accepted Answer

Extensive economic growth relies on increasing production factors, while intensive economic growth focuses on enhancing their efficiency.

Answer

Extensive economic growth is less environmentally sustainable than intensive growth.

Question 22

Which of the following policies is most likely to promote economic growth in the long run?

Accepted Answer

Investment in education and infrastructure

Answer

Deflationary monetary policy

Answer

High levels of taxation

Answer

Protectionist trade policies

Question 23

Which of the following is a characteristic of sustained economic growth over an extended period?

Accepted Answer

Rising living standards

Answer

Fluctuating levels of unemployment

Answer

Stagnant wages

Answer

High levels of inflation

Question 24

Which of the following is a widely accepted measure of economic growth at the national level?

Accepted Answer

Gross Domestic Product (GDP)

Answer

Purchasing Power Parity (PPP)

Answer

Human Development Index (HDI)

Answer

Consumer Price Index (CPI)

Question 25

Which of the following is a potential obstacle to economic growth in developing countries?

Accepted Answer

Lack of investment in research and development

Answer

Abundant natural resources

Answer

High levels of government spending

Answer

Low population growth

Question 26

Which of the following is a potential benefit of economic growth?

Accepted Answer

Increased job opportunities

Answer

Lower healthcare costs

Answer

Improved environmental quality

Answer

Reduced inequality

Question 27

Which of the following is a role that governments can play in promoting economic growth?

Accepted Answer

Investing in public infrastructure

Answer

Setting interest rates

Answer

Printing money

Answer

Raising taxes

Question 28

Which of the following is a type of economic growth that involves increasing the quantity of inputs used in production?

Accepted Answer

Extensive

Answer

Intensive

Answer

Inclusive

Answer

Sustainable

Question 29

Which of the following is a consequence of economic growth that can lead to increased demand for goods and services?

Accepted Answer

Increased disposable income

Answer

Increased unemployment

Answer

Reduced government spending

Answer

Lower inflation