Question : 9.3   Economic Growth Theories: Old and New 1) Thomas Malthus : 1224077

 

9.3   Economic Growth Theories: Old and New

 

1) Thomas Malthus was an economist who contributed to the ________ theory of growth.

A) classical

B) neoclassical

C) new growth

D) socialist

E) Keynesian

 

 

2) The Malthusian theory

A) is also called the classical growth theory and predicts that we will run out of resources.

B) is also called the neoclassical growth theory.

C) predicts that the real GDP per person will continue to increase as long as technology increases.

D) claims that the subsistence wage will increase over time.

E) shows that the production function will shift upward continuously.

 

 

3) A key element of the classical growth theory is that

A) economic growth can be sustained as long as government intervention does not occur.

B) increases in technology drive economic growth.

C) an increase in population leads to increase in labor supply and a decline in real GDP per person.

D) low taxes promote economic growth.

E) market forces drive economic growth.

 

4) The classical theory was developed in the late 18th and early 19th centuries

A) and therefore is not accepted today.

B) during a time of population decline.

C) and has proponents today who fear population growth and overpopulation.

D) and cannot be explained using the modern tool of the productivity function.

E) and still applies to the most developed nations today, though not to the less developed nations.

 

 

5) Classical growth theory predicts that in the long run there will be

A) zero economic growth.

B) positive economic growth.

C) negative economic growth.

D) sustained increases in the productivity growth rate.

E) sustained increases in economic growth.

 

 

6) According to classical growth theory, people earn only a subsistence real income because of growth in

A) technology.

B) capital.

C) population.

D) employment.

E) labor productivity.

 

7) Which of the following are predicted by the classical growth theory?

i.Population growth will end economic growth.

ii.Real GDP per person will return to subsistence level.

iii.Technology drives persistent economic growth.

A) i and ii

B) i, ii and iii

C) i only

D) ii only

E) i and iii

 

 

8) If real GDP per person rises above the subsistence level then, according to classical growth theory,

A) population growth will slow down.

B) a population explosion will occur.

C) labor productivity growth permanently increases.

D) real GDP per person will remain above the subsistence level.

E) real GDP per person will fall below the subsistence level.

 

 

9) According to classical growth theory, if labor productivity increases,

A) the population grows and eventually real GDP returns to the subsistence level.

B) the population grows but more slowly than real GDP so that people’s incomes are permanently higher.

C) the pursuit of profit causes further increases in capital per hour and technology and economic growth continues indefinitely.

D) the growth rate of real GDP per person permanently increases.

E) people save more, which increases the capital per hour even more, and so economic growth continues indefinitely.

 

10) Classical growth theory predicts that increases in real GDP per person will

A) not last because higher income leads to a population explosion.

B) last because higher growth leads to new technology.

C) last because people make choices in the pursuit of higher profits.

D) not last because higher income encourages smaller families and a lower population growth rate.

E) last only if the government directs firms to make more investments in capital and new technology.