Question : 91) If a country experiences growth in “total factor productivity” : 1384435

91) If a country experiences growth in “total factor productivity” (i.e., the “Solow residual”), then

A) all growth in real GDP can be explained by growth in the labour force.

B) all growth in real GDP can be explained by growth in the capital stock.

C) there is some growth in real GDP that cannot be accounted for by growth in capital or the labour force.

D) none of the growth in real GDP can be accounted for by growth in capital and the labour force.

E) material standards of living are falling.

92) The growth of “total factor productivity,” or the “Solow residual,” is equal to the growth in real GDP

A) accounted for by changes in all factors of production but excluding technological changes.

B) accounted for by changes in all factors of production and including technological changes.

C) that cannot be accounted for by changes in the quantities of labour and capital.

D) that cannot be accounted for by changes in technology.

E) that cannot be accounted for by changes in the labour force.

93) An example of “embodied technical change” is

A) education that teaches a wider portion of the labour force basic numeracy.

B) the strengthening of social infrastructure, such as delivery of basic health-care services.

C) better methods of inventory control.

D) the development of better intellectual property law.

E) the replacement of old computer chips with new ones designed for faster processing.

94) The Solow residual is an estimate of changes in

A) economic growth.

B) human capital.

C) physical capital.

D) labour.

E) technology.

95) The so-called “Solow residual”

A) refers to the amount of GDP growth that cannot be explained by the growth in technological change.

B) takes embodied technological change into consideration.

C) is an underestimate of the amount of technological change when embodied technological progress occurs.

D) is an alternative to a measure of “total factor productivity.”

E) is an overestimate of the amount of technological change when embodied technological progress occurs.

96) The aggregate production function shows the ________ for given levels of labour and capital inputs.

A) marginal product of labour

B) marginal product of capital

C) returns to scale

D) total output for society (real GDP)

E) the production possibilities boundary

97) Neoclassical growth theory is based on the assumption of ________ marginal returns to a single factor and ________ returns to scale exhibited by the aggregate production function.

A) decreasing; constant

B) decreasing; decreasing

C) constant; decreasing

D) increasing; increasing

E) increasing; constant

98) An aggregate production function exhibits constant returns to scale when a 1% increase in labour input

A) produces a 1% increase in output.

B) along with a 1% increase in capital produces the same amount of output.

C) along with a 1% increase in capital produces one percent more output.

D) along with a 1% decrease in capital produces the same amount of output.

E) induces a 1% increase in capital input.

99) An aggregate production function exhibits increasing returns to capital when

A) no change in capital produces a one percent increase in output.

B) a 1% decrease in capital produces an increase in the marginal product of capital.

C) a 1% increase in capital produces no change in output.

D) each additional unit of capital increases the number of jobs by more than 1%.

E) each additional unit of capital has a higher marginal product than the previous unit.

100) Consider the aggregate production function Y = F(K, L). If the inputs K and L are increased by 5% each and total output (Y) increases by 5% as a result, then this production function is displaying

A) increasing returns to scale.

B) constant returns to scale.

C) decreasing returns to scale.

D) diminishing marginal returns.

E) a change in technology.