Economics MCQs

Page No. 237

The best way to achieve economic growth is to ?


a increase government spending

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b reduce taxation

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csave more

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d increase personal consumption

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View Answer save more

The idea of convergence of GDP in Europe suggests that ?


aAll countries will eventually join the EEC

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

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cThe gap between countries GDP per head will widen

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

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


a imperfect labor markets

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brational expectations

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c intertertemporal decisions of households, firms and government

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dsun spot cycles

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


aprivate sector imports and exports

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beconomic policy

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c the duration of compulsory education

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d labor supply changes

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Real business cycles are cycles in ?


apotential output

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b actual output

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creal output

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d international trade

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View Answer potential output

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


a aggregate supply is

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baggregate demand is

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cpotential output is

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d real variables are

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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

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bmultiplier accelerator model

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cSolow theory

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d New classical theory

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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

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bcapital-widening Catch-up in technology

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ccapital-deepening technical innovation

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dcapital-deepening, catch-up in technology

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Economic growth may depend upon _____ and _____?


aPopulation size, x-efficiency

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bPopulation age distribution, education

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cPopulation growth technical progressPopulation growth technical progress

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d Population growth education

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


aa higher growth rates

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ba fluctuating growth rate

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c a fluctuating growth rates

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dno change in the growth rate

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