#1
Which of the following is a key determinant of long-term economic growth according to neoclassical growth theory?
Technological progress
ExplanationTechnological progress is a central factor in neoclassical growth theory, driving long-term economic growth.
#2
Who introduced the Solow Growth Model?
Robert Solow
ExplanationThe Solow Growth Model was introduced by economist Robert Solow.
#3
Which policy tool is often used to counteract inflationary pressures in an economy?
Contractionary monetary policy
ExplanationContractionary monetary policy is employed to reduce inflationary pressures in an economy.
#4
Which of the following is a measure of income inequality?
Gini coefficient
ExplanationThe Gini coefficient is a measure of income inequality, reflecting the distribution of income among a population.
#5
Which of the following is a component of Aggregate Demand (AD) in macroeconomics?
Government spending
ExplanationGovernment spending is a component of Aggregate Demand (AD) in macroeconomics, influencing overall economic activity.
#6
Which type of unemployment occurs when there is a mismatch between the skills of workers and the requirements of available jobs?
Structural unemployment
ExplanationStructural unemployment results from a mismatch between worker skills and job requirements.
#7
Which theory suggests that economic growth depends fundamentally on productivity growth resulting from technological innovation?
Endogenous growth theory
ExplanationEndogenous growth theory posits that economic growth is driven by internal factors, particularly technological innovation.
#8
According to the Harrod-Domar model, which factor is crucial for economic growth?
Rate of capital accumulation
ExplanationThe Harrod-Domar model emphasizes the importance of the rate of capital accumulation for economic growth.
#9
Which of the following is NOT a characteristic of endogenous growth theory?
Economic growth is primarily driven by exogenous factors.
ExplanationContrary to endogenous growth theory, it does not primarily attribute economic growth to exogenous factors.
#10
According to the classical growth theory, what is the primary driver of economic growth?
Savings and investment
ExplanationClassical growth theory asserts that savings and investment are the primary drivers of economic growth.
#11
According to the Phillips curve, what is the relationship between inflation and unemployment?
Inverse
ExplanationThe Phillips curve suggests an inverse relationship between inflation and unemployment—when one decreases, the other tends to increase.
#12
Which of the following is a key assumption of the New Classical macroeconomic theory?
Rational expectations
ExplanationNew Classical macroeconomic theory is based on the assumption of rational expectations among economic agents.
#13
In the context of economic development, what does the 'Washington Consensus' refer to?
A set of free-market economic policies
ExplanationThe 'Washington Consensus' represents a set of economic policies advocating free-market principles for economic development.
#14
Which economist is associated with the theory of 'creative destruction'?
Joseph Schumpeter
ExplanationThe theory of 'creative destruction' is associated with economist Joseph Schumpeter, highlighting the role of innovation in economic development.