Question : 81) In the Neoclassical growth model, the law of diminishing : 1384434

81) In the Neoclassical growth model, the law of diminishing marginal returns implies that capital accumulation leads to ever

A) larger decreases in GDP and large decreases in living standards.

B) larger increases in GDP but smaller decreases in living standards.

C) smaller increases in GDP and living standards.

D) larger levels of unemployment but small increases in the standard of living.

E) larger levels of unemployment but larger increases in the standard of living.

82) A person who returns to school to improve her computer skills is an example of an increase in

A) the labour force.

B) human capital.

C) physical capital.

D) technological capital.

E) financial capital.

83) According to the Neoclassical growth model, which of the following scenarios explains improvements in long-run material living standards?

A) an increase in population

B) a decrease in unemployment rates

C) an increase in the stock of physical capital

D) an equal increase in both population and the stock of capital

E) an equal increase in both population and output

84) According to the Neoclassical growth model, which of the following scenarios (other things being equal) explains progressively smaller increases in per capita GDP?

A) an increase in population

B) a decrease in unemployment rates

C) an increase in the capital stock

D) an equal increase in both population and the stock of capital

E) an equal increase in population and output

85) Real GDP is not a good measure of average material living standards because

A) it is biased by the changes in the inflation rate.

B) it excludes the role of imported goods.

C) it does not take into account the size of the population.

D) it is sensitive to the base year chosen in its calculation.

E) the price level may be changing, which affects what people can afford to buy.

86) Balanced growth of labour and capital in the Neoclassical growth model

A) leads to rising material living standards.

B) will not increase the level of per capita GDP.

C) will result in a constant level of GDP.

D) is a natural outcome of long-run equilibrium.

E) explains current rising per capita incomes in many countries.

87) According to the Neoclassical growth theory, sustained rising material living standards can only be explained by

A) growth in human capital.

B) growth in physical capital.

C) growth in the labour force.

D) balanced growth of labour and capital.

E) exogenous technological change.

88) “Embodied technical change” is said to occur when

A) older capital equipment is replaced with different, more productive, capital.

B) the capital-labour ratio is increasing.

C) innovations in the organization of production take place which do not involve changes in the form of capital used.

D) techniques of managerial control are improved.

E) the labour force acquires new skills that can be used across a wide range of industries.

89) Consider the Neoclassical growth model. Sustained economic growth in the long run could best be fostered by

A) expansionary fiscal policy.

B) decreasing excise taxes on consumer goods.

C) technological improvements embodied in physical or human capital.

D) elimination of an output gap.

E) expansionary monetary policy.

90) When a new personal computer is purchased to replace an old one, and the new PC is much better and faster than the old one, there has been

A) a disembodied technical change.

B) a rise in the capital-output ratio.

C) a fall in the output per unit of capital.

D) an embodied technical change.

E) capital “deepening.”