Question : 71) In the Neoclassical growth model, whenever diminishing returns applies, : 1384433

71) In the Neoclassical growth model, whenever diminishing returns applies, increases in the population, other things being equal, are accompanied by

A) decreasing GDP and falling living standards.

B) decreasing GDP and increasing living standards.

C) increasing GDP and falling living standards.

D) increasing GDP and constant living standards.

E) increasing GDP and increasing living standards.

72) In the Neoclassical growth model, decreases in the population, other things being equal, would eventually result in

A) decreasing GDP and falling living standards.

B) decreasing GDP and increasing living standards.

C) increasing GDP and falling living standards.

D) increasing GDP and increasing living standards.

E) increasing savings and increasing living standards.

73) In the Neoclassical growth model, increases in the stock of physical capital, other things being equal, will lead to

A) decreasing GDP and falling living standards.

B) decreasing GDP and increasing living standards.

C) increasing GDP and falling living standards.

D) increasing GDP and increasing living standards.

E) increasing GDP and decreased national wealth.

74) In the Neoclassical growth model, if capital and labour grow at the same rate, we will observe

A) rising GDP but falling living standards.

B) rising GDP but no change in living standards.

C) rising GDP and increasing living standards.

D) increasing living standards but only for workers using labour-intensive production.

E) increasing living standards but only for workers using capital-intensive production.

75) According to the Neoclassical growth model, it is most likely that GDP would increase, but that average material living standards would fall, as a result of

A) a fast-growing capital stock.

B) a better educated labour force.

C) an increase in the working population.

D) a growing capacity to develop and incorporate new innovations.

E) an increase in the availability of natural resources.

76) In Neoclassical growth theory, an increase in the labour force ________ total output and ________ total output per person.

A) increases; increases

B) increases; leaves constant

C) increases; reduces

D) leaves constant; leaves constant

E) leaves constant; reduces

77) In Neoclassical growth theory, average material living standards in an economy could fall when

A) additional units of capital are added to the other factors.

B) additional units of labour are added to the other factors.

C) there is equal percentage growth in capital and labour inputs.

D) technology improves.

E) there is a decline in the population.

78) In Neoclassical growth theory, increasing the amount of capital employed in production ________ the average standard of living as long as the marginal product of capital exceeds zero.

A) unambiguously raises

B) unambiguously reduces

C) has no effect on

D) at first raises but eventually reduces

E) at first reduces but eventually raises

79) The Neoclassical theory of economic growth led economics to be referred to as the “dismal science.” The explanation for this reference lies in the theory’s emphasis on

A) growing inequality of income.

B) increasing government intervention in the economy.

C) increasing damage to the environment.

D) the immoral behaviour of firms.

E) diminishing returns in production.

80) The Neoclassical growth model assumes that with a given state of technology,

A) increases in the use of a single factor bring increasing returns.

B) increases in the use of a single factor result in constant returns.

C) increases in GDP are possible only if all factors are increased at an equal rate.

D) growth in GDP happens only if the labour force grows more quickly than the amount of physical capital.

E) the standard of living will decrease if the labour force grows more quickly than the amount of physical capital.