Economics MCQs

Page No. 237

The best way to achieve economic growth is to ?


a increase government spending


b reduce taxation


csave more


d increase personal consumption


View Answer save more

The idea of convergence of GDP in Europe suggests that ?


aAll countries will eventually join the EEC


bPoorer countries have higher capital/labour ratios than richer countries.


cThe gap between countries GDP per head will widen


d Poorer less developed countries will catch up with richer ones.



Real business cycle theorists argue that _________ can explain short- and long-term fluctuation in output?


a imperfect labor markets


brational expectations


c intertertemporal decisions of households, firms and government


dsun spot cycles



The business cycle is not transmitted from one country to another through ?


aprivate sector imports and exports


beconomic policy


c the duration of compulsory education


d labor supply changes



Real business cycles are cycles in ?


apotential output


b actual output


creal output


d international trade


View Answer potential output

Real business cycle theory suggests that ____ not important in explaining short-term fluctuations around actual output ?


a aggregate supply is


baggregate demand is


cpotential output is


d real variables are


View Answer aggregate demand is

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?


asun spot theory


bmultiplier accelerator model


cSolow theory


d New classical theory



The growth rates of economies tend to converge because ________ is easier when capital per worker is low and because of?


a capital-widening technical innovation


bcapital-widening Catch-up in technology


ccapital-deepening technical innovation


dcapital-deepening, catch-up in technology



Economic growth may depend upon _____ and _____?


aPopulation size, x-efficiency


bPopulation age distribution, education


cPopulation growth technical progressPopulation growth technical progress


d Population growth education



In the neoclassical theory of growth a higher saving rate leads to ?


aa higher growth rates


ba fluctuating growth rate


c a fluctuating growth rates


dno change in the growth rate



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