8) What are the sources of human capital?
Skill: Level 1: Deinition
Section: Checkpoint 9.2
Status: Old
AACSB: Written and oral communication
9) Explain the productivity curve and how the components interact.
Skill: Level 3: Using models
Section: Checkpoint 9.2
Status: Old
AACSB: Analytical thinking
10) What does a productivity curve relect? What leads to movements along a productivity
curve and what leads to shifts in a productivity curve?
Skill: Level 3: Using models
Section: Checkpoint 9.2
Status: Old
AACSB: Analytical thinking
77
11) What is the law of diminishing returns? Give an example of what the law of diminishing
returns implies.
Skill: Level 4: Applying models
Section: Checkpoint 9.2
Status: Old
AACSB: Analytical thinking
9.8 Essay: Economic Growth Theories: Old and New
1) In the classical theory of growth, what is the inal outcome of an increase in growth and
labor productivity?
Skill: Level 1: Deinition
Section: Checkpoint 9.3
Status: Old
AACSB: Written and oral communication
78
2) Of the two economic growth theories, which is the most optimistic about the chances of
real GDP per person growing indeinitely? Which is the most pessimistic? What accounts
for the diferences?
Skill: Level 2: Using deinitions
Section: Checkpoint 9.3
Status: Old
AACSB: Written and oral communication
3) What do the classical growth theory and the new growth theory predict for global
growth amongst diferent nations? Comment on the accuracy of the predictions.
Skill: Level 4: Applying models
Section: Checkpoint 9.3
Status: Old
AACSB: Written and oral communication
79
9.9 Essay: Achieving Faster Growth
1) What is economic freedom and why is it important for economic growth?
Skill: Level 1: Deinition
Section: Checkpoint 9.4
Status: Old
AACSB: Written and oral communication
2) Why is economic growth so slow or non-existent in many third world countries? What
policies would you propose to improve the situation?
Skill: Level 4: Applying models
Section: Checkpoint 9.4
Status: Old
AACSB: Written and oral communication
3) What policies can a government undertake to achieve faster economic growth?
Skill: Level 4: Applying models
Section: Checkpoint 9.4
Status: Old
AACSB: Written and oral communication
4) A country’s leadership believes that the neoclassical growth theory is correct. The
country already has the necessary preconditions for growth, so suggest policy changes the
government might enact to help speed economic growth.
80
Skill: Level 5: Critical thinking
Section: Checkpoint 9.4
Status: Old
AACSB: Written and oral communication
5) Why are the governments of developed countries concerned about the quality of
education in their countries? What efect does education play in determining the country’s
economic growth rate and its standard of living? Why does it have this efect?
Skill: Level 5: Critical thinking
Section: Checkpoint 9.4
Status: Old
AACSB: Written and oral communication
81