Question Details

Jorgenson said that the high cost of imported energy will cause business in general 



1. "One of the professors' more controversial findings is that public investment in physical capital (as opposed to human capital) in the last forty years has had a negative effect on economic growth. The researchers speculate that this is because public investment has "crowded out" ......" This is best completed with 
a) imports b) exports c) consumption d) private investment 
2. "The Opposition said that while it welcomed the high levels of growth, 'it is low-quality growth because investment is a missing ingredient. This is simply recovery brought about by government pump-priming. This growth cannot be sustained.' " A counterargument to this claim is that 
a) investment is not an important ingredient in sustained growth 
b) higher consumption spending, not investment spending, is the ultimate goal 
c) as the recovery pushes the economy to capacity investment will be forthcoming 
d) government pump-priming is an acknowledged means of stimulating an economy 39 
3. "Jorgenson said that the high cost of imported energy will cause business in general to substitute labor for energy in the production process and that this would likely have a number of harmful effects on the economy: reduced growth, lower productivity and higher inflation." This phenomenon causes reduced productivity because 
a) it decreases the number of jobs b) labor has less energy to work with 
c) businesses no longer try to minimize costs 
d) businesses no longer try to adopt the most efficient production techniques 
4. "The case for tax breaks for investment is based on the claim that, because of big spillover effects, the return on investment in machinery and equipment to the economy as a whole is ......" This is best completed with 
a) practically zero b) less than the current rate of interest 
c) less than the return to an individual firm 
d) greater than the return to an individual firm 
5. "Since 1991 business-sector productivity has increased at a 1.3 percent annual rate, while the adult population has increased at a 1 percent annual rate. Meantime, business output has risen 3.3 percent per year. The 1-percentage-point gap between output growth and productivity-adjusted population growth has been filled by ....... " This is best completed with 
a) increases in the capital stock b) increases in the unemployment rate 
c) decreases in hours worked per employee 
d) increases in the labor-force participation rate




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