Endogenous Growth Theory

Description: This quiz will test your understanding of the concepts and theories related to Endogenous Growth Theory.
Number of Questions: 15
Created by:
Tags: economics macroeconomics endogenous growth theory
Attempted 0/15 Correct 0 Score 0

Which of the following is NOT a key assumption of the Solow-Swan model?

  1. Constant returns to scale

  2. Perfect competition

  3. Exogenous technological progress

  4. Diminishing returns to capital


Correct Option: C
Explanation:

Exogenous technological progress is not a key assumption of the Solow-Swan model. Instead, endogenous growth theory assumes that technological progress is driven by factors within the economic system, such as investment in research and development.

According to endogenous growth theory, what is the main determinant of long-run economic growth?

  1. Physical capital accumulation

  2. Human capital accumulation

  3. Technological progress

  4. All of the above


Correct Option: D
Explanation:

Endogenous growth theory emphasizes the role of all three factors - physical capital accumulation, human capital accumulation, and technological progress - in driving long-run economic growth.

Which of the following is NOT a type of knowledge spillover?

  1. Horizontal spillovers

  2. Vertical spillovers

  3. Geographical spillovers

  4. Temporal spillovers


Correct Option: D
Explanation:

Temporal spillovers are not a type of knowledge spillover. Horizontal spillovers occur between firms in the same industry, vertical spillovers occur between firms in different stages of production, and geographical spillovers occur between firms located in close proximity.

The Romer model of endogenous growth is based on the assumption that:

  1. Firms can perfectly appropriate the returns to their research and development investments.

  2. There are increasing returns to scale in research and development.

  3. Technological progress is exogenous.

  4. None of the above.


Correct Option: B
Explanation:

The Romer model assumes that there are increasing returns to scale in research and development, meaning that the marginal product of research and development is greater than the average product.

Which of the following is NOT a policy that can be used to promote endogenous growth?

  1. Investing in education and training

  2. Providing subsidies for research and development

  3. Protecting intellectual property rights

  4. Increasing the minimum wage


Correct Option: D
Explanation:

Increasing the minimum wage is not a policy that can be used to promote endogenous growth. Investing in education and training, providing subsidies for research and development, and protecting intellectual property rights are all policies that can be used to promote endogenous growth.

The Lucas model of endogenous growth is based on the assumption that:

  1. Human capital is the only factor of production.

  2. There are constant returns to scale in production.

  3. Technological progress is exogenous.

  4. None of the above.


Correct Option: A
Explanation:

The Lucas model assumes that human capital is the only factor of production, and that technological progress is driven by the accumulation of human capital.

Which of the following is NOT a type of externality that can arise from research and development?

  1. Positive externalities

  2. Negative externalities

  3. Pecuniary externalities

  4. Technological externalities


Correct Option: C
Explanation:

Pecuniary externalities are not a type of externality that can arise from research and development. Positive externalities occur when the benefits of research and development spill over to other firms or individuals, negative externalities occur when the costs of research and development spill over to other firms or individuals, and technological externalities occur when research and development leads to the creation of new technologies that can be used by other firms or individuals.

The Aghion and Howitt model of endogenous growth is based on the assumption that:

  1. Firms can perfectly appropriate the returns to their research and development investments.

  2. There are increasing returns to scale in research and development.

  3. Technological progress is driven by the accumulation of human capital.

  4. None of the above.


Correct Option: A
Explanation:

The Aghion and Howitt model assumes that firms can perfectly appropriate the returns to their research and development investments, and that technological progress is driven by the accumulation of knowledge.

Which of the following is NOT a type of knowledge capital?

  1. Human capital

  2. Physical capital

  3. Social capital

  4. Organizational capital


Correct Option: B
Explanation:

Physical capital is not a type of knowledge capital. Human capital, social capital, and organizational capital are all types of knowledge capital.

The Grossman and Helpman model of endogenous growth is based on the assumption that:

  1. Firms can perfectly appropriate the returns to their research and development investments.

  2. There are increasing returns to scale in research and development.

  3. Technological progress is driven by the accumulation of human capital.

  4. None of the above.


Correct Option: B
Explanation:

The Grossman and Helpman model assumes that there are increasing returns to scale in research and development, and that technological progress is driven by the accumulation of knowledge.

Which of the following is NOT a type of endogenous growth model?

  1. The Solow-Swan model

  2. The Romer model

  3. The Lucas model

  4. The Aghion and Howitt model


Correct Option: A
Explanation:

The Solow-Swan model is not a type of endogenous growth model. The Romer model, the Lucas model, and the Aghion and Howitt model are all types of endogenous growth models.

The Jones model of endogenous growth is based on the assumption that:

  1. Firms can perfectly appropriate the returns to their research and development investments.

  2. There are increasing returns to scale in research and development.

  3. Technological progress is driven by the accumulation of human capital.

  4. None of the above.


Correct Option: B
Explanation:

The Jones model assumes that there are increasing returns to scale in research and development, and that technological progress is driven by the accumulation of knowledge.

Which of the following is NOT a type of policy that can be used to promote endogenous growth?

  1. Investing in education and training

  2. Providing subsidies for research and development

  3. Protecting intellectual property rights

  4. Increasing the minimum wage


Correct Option: D
Explanation:

Increasing the minimum wage is not a policy that can be used to promote endogenous growth. Investing in education and training, providing subsidies for research and development, and protecting intellectual property rights are all policies that can be used to promote endogenous growth.

The Murphy, Shleifer, and Vishny model of endogenous growth is based on the assumption that:

  1. Firms can perfectly appropriate the returns to their research and development investments.

  2. There are increasing returns to scale in research and development.

  3. Technological progress is driven by the accumulation of human capital.

  4. None of the above.


Correct Option: A
Explanation:

The Murphy, Shleifer, and Vishny model assumes that firms can perfectly appropriate the returns to their research and development investments, and that technological progress is driven by the accumulation of knowledge.

Which of the following is NOT a type of knowledge spillover?

  1. Horizontal spillovers

  2. Vertical spillovers

  3. Geographical spillovers

  4. Temporal spillovers


Correct Option: D
Explanation:

Temporal spillovers are not a type of knowledge spillover. Horizontal spillovers occur between firms in the same industry, vertical spillovers occur between firms in different stages of production, and geographical spillovers occur between firms located in close proximity.

- Hide questions