1. The government can promote economic growth by

Group of answer choices

A. promoting the rule of law, establishing property rights, providing incentives for research and development, and placing restrictions on trade to protect domestic producers.

B. increasing capital gains taxes to pay for new transfer programs, establishing property rights, providing incentives for research and development, and placing restrictions on trade to protect domestic producers.

C. promoting the rule of law, establishing property rights, limiting research and development, and removing restrictions on trade.

D. promoting the rule of law, establishing property rights, providing incentives for research and development, and removing restrictions on trade.

2. Which of the following statements is NOT correct?

Group of answer choices

A. Countries that have had higher output growth per person have typically done so without higher productivity growth.

B. A country's standard of living and its productivity are closely related.

C. Productivity refers to output produced per hour of work.

D. The assumption of diminishing marginal product of capital in the Neoclassical growth model implies that the economy will eventually converge to a steady-state where income per worker stops growing.

3. Which of the following is an example of human capital?

Group of answer choices

A. An individuals health.

B. An individuals education.

C. An individuals labor supply.

D. Both A and B.

E. A, B, and C.

4. Which of the following policies are NOT associated with higher levels of per capita income?

Group of answer choices

A. Property rights.

B. Free trade.

C. High corporate tax rates.

D. Public subsidies for R&D.

5. If the government cuts taxes today, issuing debt today and repaying the debt plus interest next year, according to the theory of Ricardian Equivalence, a rational taxpayer will

Group of answer choices

A. spend the full amount of the tax cut today and reduce consumption next year.

B. increase saving today, leaving consumption unchanged.

C. increase consumption today, before taxes go up next year.

D. spend less time at work because the temporary tax cut is essentially a pure substitution effect.