Since the benefits of an education do not accrue exclusively to the person

Since the benefits of an education do not accrue

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government can also improve economic growth. Since the benefits of an educationdo not accrue exclusively to the person receiving an education, the market mayproduce an inefficiently low level of education and training. If the governmentoffers subsidies for education, more people will receive an education, and theincrease in human capital will increase economic growth (particularly if there areincreasing returns to human capital).Diff: 2Page Ref: 736-737/330-331Topic: Growth PoliciesLearning Outcome: Macro 4: Explain the sources of productivity growthAACSB: Reflective Thinking37
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ExamName___________________________________MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.1) The aggregate expenditure model focuses on the relationship between ________ and ________ inthe short run, assuming ________ is constant.A) total spending; real GDP; the price levelB) total income; real GDP; the price levelC) total spending; real GDP; total incomeD) total production; total income; real GDPAnswer: A1)Diff: 1Page Ref: 750/344Topic: The Aggregate Expenditure ModelLearning Outcome: Macro 8: Investigate the relationship between income and expendituresAACSB: Reflective Thinking2) As a result of slow economic growth in 2011, many companies including Cisco Systems, LockheedMartin, and Cracker Barrel Old Country Store cut production and employment as a result of thesluggish growth in the total amount of spending in the economy. The total amount of spending inthe economy is known as2)Diff: 1Page Ref: 749/343Topic: The Aggregate Expenditure ModelLearning Outcome: Macro 8: Investigate the relationship between income and expendituresAACSB: Reflective Thinking3) The key idea of the aggregate expenditure model is that in any particular year, the level of GDP isdetermined mainly by3)Diff: 1Page Ref: 750/344Topic: The Aggregate Expenditure ModelLearning Outcome: Macro 8: Investigate the relationship between income and expendituresAACSB: Reflective Thinking
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  • Spring '11
  • Lee
  • Economics, AACSB, Page Ref, Reflective thinking, Blum integer, 133

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