A. capital-widening technical innovation
B. capital-widening Catch-up in technology
C. capital-deepening technical innovation
D. capital-deepening, catch-up in technology
Long Term Economic Growth
The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?
A. sun spot theory
B. multiplier accelerator model
C. Solow theory
D. New classical theory
Real business cycle theory suggests that …. not important in explaining short-term fluctuations around actual output ?
A. aggregate supply is
B. aggregate demand is
C. potential output is
D. real variables are
Real business cycles are cycles in ?
A. potential output
B. actual output
C. real output
D. international trade
The business cycle is not transmitted from one country to another through ?
A. private sector imports and exports
B. economic policy
C. the duration of compulsory education
D. labor supply changes
Real business cycle theorists argue that ……… can explain short- and long-term fluctuation in output?
A. imperfect labor markets
B. rational expectations
C. intertertemporal decisions of households, firms and government
D. sun spot cycles
The idea of convergence of GDP in Europe suggests that ?
A. All countries will eventually join the EEC
B. Poorer countries have higher capital/labour ratios than richer countries.
C. The gap between countries GDP per head will widen
D. Poorer less developed countries will catch up with richer ones.
The best way to achieve economic growth is to ?
A. increase government spending
B. reduce taxation
C. save more
D. increase personal consumption
The long run equilibrium level of national income is the level at which ?
A. economic growth is Zero
B. All investment is used in the manufacturing sector
C. Economic growth is growing
D. All investment is used to maintain the existing capital stock at its current level
The growth path resulting from technological progress for a given saving rate is known as the ?
A. Steady state growth path
B. Steady state invention rate
C. Steady state level of output
Unsteady state growth path