Econ Finals Quizzes
Econ Finals Quizzes
Econ Finals Quizzes
FALSE
IT IS THE NATIONAL BUDGET AND NOT THE DBM THAT DETERMINES HOW MUCH EACH
GOVERNMENT AGENCY CAN SPEND FOR THEIR OPERATIONS.
TRUE
PRICES CAN BE “STICKY UP” WHEN THEY STAY AT LOWER LEVELS DESPITE THE FACT
THAT MARKET CONDITIONS DICTATE THAT THEY SHOULD HAVE ALREADY GONE UP.
FALSE
CLASSICAL ECONOMISTS ARGUE THAT PRICES, WAGES, AND RATES ARE FLEXIBLE
AND MARKETS ALWAYS CLEAR. BY THE PHRASE “MARKETS ALWAYS CLEAR”, IT
SIMPLY INDICATES THE NOTION THAT THE MARKET CAN ADJUST TO IMBALANCES
OCCURRING IN THE ECONOMY.
TRUE
THE NEW KEYNESIANS STILL MAINTAIN THAT THERE ARE VARIOUS MARKET
FAILURES THAT AN ECONOMY WILL EXPERIENCE. COMMON AMONG THESE
FORMS OF MARKET FAILURES ARE "STICKY" PRICES AND _____.*
WAGES
Adam Smith and Karl Marx are the two most famous thinkers for their two opposite
views on the nation’s system of economic arrangements: one called capitalism and the
other called communism.*
F
Both the Rostow and Harrod-Domar Models emphasized that the prime mover of
economy is investments, hence, the importance of capital to generate investments.*
F
The Lewis Model assumes that excess profits over wages in the modern sector would
be reinvested and shall result to further expansion. Such expansion in output will in turn
generate more employment.*
T
Unlike the Lewis Model, the analysis of Chenery identified that the steady accumulation
of physical and human capital is among conditions necessary for economic growth,
apart from savings and investments.*
T
Unlike the Harrod–Domar model, the Lewis model considered savings and investments
to be the driving forces of economic development but in the context of the less
developed countries.*
T
GNP as a measure of well-being and development is exclusively based on material
wealth.*
T
GNP as a measure does not include improvements in welfare such as better healthcare,
education, and more housing for large parts of the whole population.*
T
GNP as a measure does not include improvements in welfare such as better healthcare,
education, and more housing for large parts of the whole population.*
T
Solow neoclassical growth model stresses the importance of three factors of output
growth: increases in labour quantity and quality (through population growth and
education), increases in capital (through savings and investments) and improvements in
technology. Technological change in Solow’s model is provided endogenously.*
T
Under a capitalist system, free trade, private property and competition are seen as the
foundations that would stimulate economic development. Specifically, this would result
solely to economic growth.*
F
Structural change models in the 1960s and early 1970s emphasized the need for
reallocating labor from the industrial sector to the agricultural sector as the key source
for economic growth.*
F
In the 1970s and early 1980s. The dependence theorists argued that underdevelopment
exists because of the dominance of developed countries and multinational corporations
over developing countries.*
T
Theorists of the 1950s and early 1960s viewed the process of development as a
sequence of historical stages which built on the historical pattern of developing
countries.*
F
The model suggests an active role for public policy in promoting econ development thru
direct and indirect investments in human capital formation.*
NGM
The growth of output and employment in the modern sector will eventually absorb the
excess labor in the rural sector. This will require increase individual investment and
capital accumulation in the modern sector.*
SCM
The model argues that LDCs consist of two sectors – a traditional overpopulated rural
sector with surplus labor and a high-productivity modern sector.*
SCM
The existence and continuance of underdevelopment is primarily due to the historical
evolution of a highly unequal international capitalist system of rich - poor country
relationship.*
IDM
The model is simply expressed by the equation, Y = Ak, where Y is output, A is any
factor affecting technology, and k is physical and human capital.*
0/1
NGM MAYBE
In order to grow, the economy must save and invest a certain proportion of their
GNP. The more they can save and invest, the faster they grow.*
0/2
Underdevelopment of LDCs is attributed a large part of the 3rd world’s continuing and
worsening poverty to the existence and of the industrial capitalists of the northern
hemisphere and the elite “compradors” in the host LDCs.*
IDM
This theory provides a framework for analysing endogenous growth, persistent GNP
growth that is determined by the system governing the production process rather than
by forces outside of the system.*
NGM
“Good government is minimal government”*
0/2
Different sets of conditions, of which some are “superior” and others “inferior”, can
coexist in a given space.*
0/2
SCM
It recognises the many imperfections in LDC product and factor markets and that
governments do have a key role in facilitating the operation of markets thru “market-
friendly” interventions by investing physical and social infrastructures, healthcare
facilities, and educational institutions.*
NCM
NCM
Analysts of this model are basically optimistic that the “correct” mix of econ policies will
generate beneficial patterns of self-sustaining growth.*
0/2
Growth rate in this model is expressed in the equation: ∆y/y = s/k where ∆y/y is growth
rate, s is national savings ration, and k is national output ratio.*
HDM
The primary focus of the model is on both the process of labor transfer and the growth
of output & employment in the modern sector.*
SCM
Economists that advocated this model argued that despite variations, one can identify
certain patterns occurring in almost all countries during the development process. Such
patterns may be affected by the choice of development policies of developed nations.*
SCM
Assumes politicians, bureaucrats, citizens, & states act solely from a self-interested
perspective, using power and authority of government for their own selfish ends.*
NCM