EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 25, Problem 6MCQ
To determine
To identify:
The option that correctly states about the classical growth theory.
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Why one nation experiences economic growth and another does not is a question that has intrigued economists since Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations in 1776. Explain why each of the following would limit economic growth.a. The politically connected elite secure a large share of a country’s output and put the proceeds into foreign banks.having a small political elite that makes all the calls and decisions will lead to a small economic elite. b. The national philosophy is “Live for the moment and forget about tomorrow.”
c. The government closes all of the schools so more people will be available for work.d. The country fears military invasion and spends half of its income on military goo
What is the outcome of classical growth theory?
According to classical growth theory,
A. discoveries bring profit, and competition destroys profit
B. capital does not experience diminishing returns
C. people make choices that determine the pace at which technological advances occur
D. no matter how technology advances, real wage rates are always pushed back toward the subsistence level
Suppose some of the country's capital is suddenly destroyed. If the depreciation rate, savings rate, and production function remain unchanged, then the real growth rate will _____ in the short run and the steady-state level of capital will _____
A.increase, decrease
B.decrease, decrease
C.increase, stay the same
D. decrease, stay the same
Chapter 25 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 25 - Prob. 1SPPACh. 25 - Prob. 2SPPACh. 25 - Prob. 3SPPACh. 25 - Prob. 4SPPACh. 25 - Prob. 5SPPACh. 25 - Prob. 6SPPACh. 25 - Prob. 7SPPACh. 25 - Prob. 8SPPACh. 25 - Prob. 9SPPACh. 25 - Prob. 10SPPA
Ch. 25 - Prob. 11SPPACh. 25 - Prob. 12SPPACh. 25 - Prob. 1IAPACh. 25 - Prob. 2IAPACh. 25 - Prob. 3IAPACh. 25 - Prob. 4IAPACh. 25 - Prob. 5IAPACh. 25 - Prob. 6IAPACh. 25 - Prob. 7IAPACh. 25 - Prob. 8IAPACh. 25 - Prob. 9IAPACh. 25 - Prob. 10IAPACh. 25 - Prob. 1MCQCh. 25 - Prob. 2MCQCh. 25 - Prob. 3MCQCh. 25 - Prob. 4MCQCh. 25 - Prob. 5MCQCh. 25 - Prob. 6MCQCh. 25 - Prob. 7MCQCh. 25 - Prob. 8MCQ
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