Econ 104 Exam II PSU EXAM (2026) UPDATE Verified Questions And
Answers | With 100% Correct Answers graded A+ Guaranteed Success!!
Real GDP per capita has increased every single year between 1870 and 2016 in the United States. -
(ANSWER)False
Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy. -
(ANSWER)False
Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied
by technological change. - (ANSWER)True
A technological advancement results in an upward shift in the per-worker production function. -
(ANSWER)True
In the Romer model, knowledge capital is accumulated by creating objects. - (ANSWER)False
Both Robert Solow and Paul Romer won Nobel prizes in economics for their work on economic growth. -
(ANSWER)True
The lower-income industrial countries are catching up to the higher-income industrial countries in terms
of economic growth. - (ANSWER)True
If consumption is defined as C=2,000+0.8Y, then the marginal propensity to save is 0.8. - (ANSWER)False
The marginal propensity to consume is the slope of the consumption function. - (ANSWER)True
The larger the MPC, the smaller the value of the multiplier. - (ANSWER)False
Which of the following is an example of human capital? - (ANSWER)a college education
, Econ 104 Exam II PSU EXAM (2026) UPDATE Verified Questions And
Answers | With 100% Correct Answers graded A+ Guaranteed Success!!
When production in an economy grows more quickly than the population in that economy, which of the
following must be occurring? - (ANSWER)Real GDP per capita is rising.
There is a government budget surplus if - (ANSWER)T-TR>G
Which of the following would increase public saving? - (ANSWER)an increase in taxes
An increase in public saving has what impact on the market for loanable funds? - (ANSWER)The supply of
loanable funds increases.
Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per
hour worked by $500. If capital per hour worked increases further to $25,000, by how much would you
expect real GDP per hour worked to increase if there are diminishing returns? - (ANSWER)by less than
$500
The per-worker production function shows the relationship between ________ per hour worked and
________ per hour worked, holding ________ constant. - (ANSWER)capital; real GDP; technology
Holding all else constant, a movement from A to C can be explained by: - (ANSWER)NOT a positive
technological change
A positive technological change will - (ANSWER)NOT move the economy along a given per-worker
production function to the right.
Technological improvements are more likely to occur if - (ANSWER)entrepreneurs are compensated with
higher profits for taking risks.
The Solow model focuses on the accumulation of ___________, whereas the Romer's endogenous
growth model focuses on the accumulation of ____________. - (ANSWER)NOT machines; labor
Answers | With 100% Correct Answers graded A+ Guaranteed Success!!
Real GDP per capita has increased every single year between 1870 and 2016 in the United States. -
(ANSWER)False
Retained earnings are always sufficient to finance a firm's rapid expansion in a high-growth economy. -
(ANSWER)False
Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied
by technological change. - (ANSWER)True
A technological advancement results in an upward shift in the per-worker production function. -
(ANSWER)True
In the Romer model, knowledge capital is accumulated by creating objects. - (ANSWER)False
Both Robert Solow and Paul Romer won Nobel prizes in economics for their work on economic growth. -
(ANSWER)True
The lower-income industrial countries are catching up to the higher-income industrial countries in terms
of economic growth. - (ANSWER)True
If consumption is defined as C=2,000+0.8Y, then the marginal propensity to save is 0.8. - (ANSWER)False
The marginal propensity to consume is the slope of the consumption function. - (ANSWER)True
The larger the MPC, the smaller the value of the multiplier. - (ANSWER)False
Which of the following is an example of human capital? - (ANSWER)a college education
, Econ 104 Exam II PSU EXAM (2026) UPDATE Verified Questions And
Answers | With 100% Correct Answers graded A+ Guaranteed Success!!
When production in an economy grows more quickly than the population in that economy, which of the
following must be occurring? - (ANSWER)Real GDP per capita is rising.
There is a government budget surplus if - (ANSWER)T-TR>G
Which of the following would increase public saving? - (ANSWER)an increase in taxes
An increase in public saving has what impact on the market for loanable funds? - (ANSWER)The supply of
loanable funds increases.
Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per
hour worked by $500. If capital per hour worked increases further to $25,000, by how much would you
expect real GDP per hour worked to increase if there are diminishing returns? - (ANSWER)by less than
$500
The per-worker production function shows the relationship between ________ per hour worked and
________ per hour worked, holding ________ constant. - (ANSWER)capital; real GDP; technology
Holding all else constant, a movement from A to C can be explained by: - (ANSWER)NOT a positive
technological change
A positive technological change will - (ANSWER)NOT move the economy along a given per-worker
production function to the right.
Technological improvements are more likely to occur if - (ANSWER)entrepreneurs are compensated with
higher profits for taking risks.
The Solow model focuses on the accumulation of ___________, whereas the Romer's endogenous
growth model focuses on the accumulation of ____________. - (ANSWER)NOT machines; labor
