Exam #2

Question 1

All human societies have to answer 3 economic questions:

Answer 1

1. ) What is going to be produced
2. ) How are the chosen goods to be produced
3. ) Who is going to get these goods

Question 2

An implication of the AK model is that:

Answer 2

investment can generate permanent long-term growth

Question 3

In a market economy, the need to recover the up-front costs of innovation means that perfect competition:

Answer 3

is not compatible with innovation.

Question 4

A imperfectly competitive producer:

Answer 4

faces a downward sloping demand curve.

Question 5

All other things equal, when the total amount/supply of productive factors and resources, R, increases, the cost of innovation (COI) curve will:

Answer 5

shift down because an increase in R lowers the price of innovation resources, w.

Question 6

In Rebelo’s AK model, the saving function is:

Answer 6

an upward-sloping straight line.

Question 7

Market systems are based on the principle of private property

Answer 7

True

Question 8

The __________ provided funds for the establishment of agricultural experiment stations at each of the land-grant institutions.

Answer 8

1887 Hatch Act

Question 9

Romer’s mathematical “Schumpeterian” model of technological change incorporates the following fundamental idea(s):

Answer 9

a. Innovations are generated by intentionally employing costly (scarce) resources to create new products, ideas, methods, etc. Incorrect
b. Innovators must compete with producers to employ the economy’s scarce, and thus costly, resources.
c. Innovation creates new products and techniques that are better, cheaper, and more attractive.
All of the above

Question 10

Land grant universities in the United States:

Answer 10

stimulated technological innovation in a perfectly-competitive industry like agriculture

Question 11

Which of the following concepts is not found in the Schumpeterian R&D model:

Answer 11

perfect competition.

Question 12

_______in the Soviet Union and Eastern Europe evolved into a highly centralized command economy with most property controlled by the state.

Answer 12

Communism

Question 13

In the R&D model of technological progress, the rate of technological progress is:

Answer 13

inversely (negatively) related to the cost of innovation

Question 14

According to Schumpeter, entrepreneurs are the people who:

Answer 14

a. see the economic potential of inventions.
b. guide and organize the innovative process that employ inventors.
c. who arrange for the funds to finance the enterprise.
Do all of the above

Question 15

In a traditional system of organization, how goods are distributed is often significantly influenced by

Answer 15

a. religion
b. caste
c. social obligations
All of the above

Question 16

Total factor productivity is defined as the residual between the:

Answer 16

average growth rate of the factors of production and the growth rate of real output

Question 17

Among the reasons why the present value of an innovation is inversely related to the total resources devoted to innovative activity,N, is/are

Answer 17

a. a higher N leads to a faster destruction of prior creations
b. a higher N reduces the amount of resources available to produce profit-generating output
All of the abov

Question 18

According to the Grabowski, Self, and Shields, the best example of a country where private property is undeveloped, yet market exchange dominates is

Answer 18

China

Question 19

In Rebelo’s AK model, the saving function is:

Answer 19

an upward-sloping straight line.

Question 20

South Korea was invaded by by North Korea in 1920.

Answer 20

False

Question 21

In general in the global economy, an increasing amount of technology is transferred between countries embodied in imported products and services.

Answer 21

True

Question 22

Technology transfers normally occur in the form of precise blueprints that are readily understood and copied.

Answer 22

False

Question 23

Robert Evenson and Lakhwinder Singh (1997) concluded that a country’s productivity growth clearly depended on the R&D expenditures of its trade partners.

Answer 23

True

Question 24

Among the conclusions of Chapter Eight’s survey of the evidence on international technology
transfers is that international flows of technology are just as fast as domestic technology flows.

Answer 24

False

Question 25

Soon after World War II, the new states of Taiwan and South Korea continued to invest in

Answer 25

the agriculture sector

Question 26

There is evidence that technological progress is a costless externality to other economic activity.

Answer 26

False

Question 27

Among the results from the study by David T. Cole and Elhana Helpman (1995) is that in small countries TFP is influenced more by domestic R&D activity than by foreign R&D activity.

Answer 27

False

Question 28

One of the two important implications of the land reforms in South Korea (land reform began in 1949) and Taiwan (land reform began in 1952) is

Answer 28

landlords as a class were eliminated in both countries

Question 29

According to Grabowski, Self and Shields, although following different catch-up paths, both South Korea and Taiwan were economic success stories.

Answer 29

True

Question 30

The international flows of technology and the flows of international trade are:

Answer 30

positively correlated, especially when one of the trade partners is a developed country.

Question 31

The volume of bilateral trade is able to explain a substantial portion of the variation in bilateral technology flows.

Answer 31

True

Question 32

Large-scale conglomerate industrial groups or combines were referred to as______in Japan during the period leading up to World War II.

Answer 32

zaibatsu

Question 33

In the case of Japan, from 1950 to 1973, gross domestic product growth(GDP) per year averaged about ___% which allowed output to double every 7 years.

Answer 33

10

Question 34

The neoclassical perspective tends to view the state as developmental, that is, it often engages in policies that harm society in general in order to benefit a politically powerful few.

Answer 34

False

Question 35

Korea became a colony of _______in 1910.

Answer 35

Japan

Question 36

The Grabowski, Self, and Shields book used the production possibilities curve to illustrate the concept of convergence. According to the book’s presentation, developing/frontier countries operate along the production possibilities curve/frontier while developed countries operate inside the production possibilities curve/frontier.

Answer 36

False

Question 37

Evidence from statistical analyses on the relationship between trade and technology flows, using patent data suggests that international trade plays a role in facilitating the flow of technology between countries.

Answer 37

True

Question 38

After World War II, South Korea sought to promote small and medium-size industries, and therefore its industrial structure was much less concentrated.

Answer 38

False

Question 39

The idea of the _________________which has often been applied to postwar Japan is that, the state selected certain industries to promote and then used its control of the banking system to direct credit to these industries.

Answer 39

developmental state

Question 40

Studies of the spread of technology among countries have shown that geographic proximity is more important for transfer of technology than international trade.

Answer 40

False

Question 41

David J. Teece (1977) and Paul David(1992) emphasized that most technology transfers between industrial plants require:

Answer 41

a. person-to-person contacts
b. follow-up information
c. training sessions
All of the above