According to new growth theory, the accumulation of ________ capital is subject to diminishing returns at the ________ level, but not at the level of the economy as a whole. A) physical; firm B) technological; personal C) knowledge; firm D) physical; production
72) According to new growth theory, the accumulation of ________ capital is subject to diminishing returns at the ________ level, but not at the level of the economy as a whole.
A) physical; firm
B) technological; personal
C) knowledge; firm
D) physical; production
73) Because knowledge capital is nonexcludable and nonrival, firms have an incentive to ________ the research and development of other firms.
A) make bids on
B) not use
C) ignore
D) free ride on
74) When firms benefit from the results of research and development they didn't pay for, we say firms
A) are litigious.
B) free ride.
C) invest in knowledge capital.
D) maintain a level playing field.
75) For how long does a patent give a firm the exclusive legal right to a product?
A) 10 years
B) 17 years
C) 20 years
D) 50 years
76) A copyright grants the creator of a book, film, or piece of software exclusive legal rights to use the creation for how long?
A) 10 years
B) 20 years
C) 50 years
D) the creator's lifetime plus 70 years for the creator's heirs
77) According to the text, there are three ways the government can help increase the accumulation of knowledge capital. What are they?
A) protecting intellectual property rights, subsidizing research and development, and subsidizing education
B) increasing taxes on firms, eliminating patents, and increasing the minimum wage
C) encouraging the use of trade secrets, expanding student loan programs, and increasing the minimum wage
D) reducing taxes on capital, increasing Social Security payments, and lowering the exchange rate
78) According to Joseph Schumpeter, which of the factors of production is central to
A) land
B) labor
C) natural resources
D) the entrepreneur
79) According to Joseph Schumpeter, the theory of creative destruction describes a process by which
A) some new products unleash a gale of destruction that drive other new products out of the market.
B) new products unleash a gale of destruction that drives old products out of the market.
C) new products are created by the destruction of capital.
D) the creation of new products never involves the destruction of old products.
80) The easiest way for a country to obtain access to technology is through
A) subsidizing education and training.
B) promoting foreign direct investment.
C) promoting policies to enhance saving.
D) enacting policies to promote property rights.
81) Human capital refers to the percentage of the working-age population in the labor force.
82) Technological change is the key to sustaining economic growth.
83) One drawback of the patent system is that firms must disclose to the public information about the product or process.
84) The Soviet Union's economic growth rate slowed despite rapid increases in capital per hour worked.
85) Technological change allows the economy to produce more output with the same amount of capital and labor.
86) According to new growth theory, firms accumulate the efficient level of both physical and knowledge capital.
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