6.The factors within the production process include (choose one or both)

A increasing returns

B induced technological change

7.Endogenous growth theory (choose one or more)

Aassumes that public and private investments in human capital generate external economies and productivity improvements that offset the natural tendency for diminishing returns

B seeks to explain the existence of increasing returns to scale and the divergent long-term growth patterns among countries

C no longer requires exogenous changes in technology to explain long-run growth

8.Even though the new growth theory reemphasizes the importance of savings and human capital investments for achieving rapid economic growth, it also leads to several implications for growth that are in direct conflict with traditional theory. These are (choose one or more)

Athere is no force leading to the equilibration of growth rates across closed economies

Bnational growth rates remain constant and differ across countries, depending on national savings rates and technology levels

Cthere is no tendency for per capita income levels in capital-poor countries to catch up with those in rich countries with similar savings and population growth rates

Da temporary or prolonged recession in one country can lead to a permanent increase in the income gap between itself and wealthier countries

9.The new growth theory helps explain anomalous international flows of capital that exacerbate wealth disparities between developed and developing countries by referencing lower levels of complementary investments that (choose one or more)

A complement and facilitate other productive factors

Badd to human capital (education), infrastructure, or research and development (R&D)

Care supposedly not produced in sufficient quantities in a free market

Dgovernment should augment through direct and indirect investments in human capital formation and the encouragement of foreign private investment in knowledge-intensive industries such as computer software and communications

10.The Romer endogenous growth model is characterized by (choose one or more)

A technological spillovers

B the economy-wide capital stock positively affecting output at the industry level

Cincreasing returns to scale at the economy-wide level

11.The knowledge part of the firm's capital stock is essentially

A a private good

Ba public good

12.Endogenous growth theory (choose one or both)

A remains dependent on a number of traditional neoclassical assumptions that are often inappropriate for developing economies

B is not well supported by empirical studies