Question 1

The president of Suldinia,a developing country,proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A)   These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
B)   These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.
C)   These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
D)   These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.E) A) and D)
F) B) and D)

Question 2

Industrial machinery is an example of

Accepted Answer

A)   a factor of production that in the past was an output from the production process.
B)   technological knowledge.
C)   a production function.
D)   an item which always has the property called constant returns to scale.E) All of the above
F) A) and B)

Question 3

Refer to Scenario 12-1.K represents the quantity of

Accepted Answer

A)   human capital only.
B)   physical capital only.
C)   human capital and physical capital combined.
D)   nonrenewable natural resources.E) A) and D)
F) C) and D)

Question 4

Productivity

Accepted Answer

A)   is nearly the same across countries,and so provides no help explaining differences in the standard of living across countries.
B)   explains very little of the differences in the standard of living across countries.
C)   explains some,but not most of the differences in the standard of living across countries.
D)   explains most of the differences in the standard of living across countries.E) None of the above
F) A) and B)

Question 5

International data on the history of real GDP growth rates shows that over the last 110 years or so,rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is correct?

Accepted Answer

A)   Although levels of real GDP per person vary substantially from country to country,the growth rate of real GDP per person is similar across countries.
B)   Productivity is not closely linked to government policies.
C)   The level of real GDP per person is a good gauge of economic prosperity,and the growth rate of real GDP per person is a good gauge of economic progress.
D)   Productivity may be measured by the growth rate of real GDP per person.E) C) and D)
F) B) and D)

Question 7

In 1870,the richest country in the world was

Accepted Answer

A)   the United States.
B)   Spain.
C)   the United Kingdom.
D)   Germany.E) B) and C)
F) All of the above

Question 8

Which of the following would increase productivity?

Accepted Answer

A)   an increase in the physical capital stock per worker
B)   an increase in human capital per worker
C)   an increase in natural resources per worker
D)   All of the above are correct.E) None of the above
F) A) and B)

Question 9

In recent decades Americans have increased their purchase of stocks of foreign-based companies.The Americans who have bought these stocks were engaged in

Accepted Answer

A)   foreign portfolio investment.
B)   indirect domestic investment.
C)   foreign direct investment.
D)   foreign indirect investment.E) A) and B)
F) B) and C)

Question 10

Educational attainment tends to be

Accepted Answer

A)   low in countries with high population growth.
B)   low in countries with low population growth.
C)   high in countries with high population growth.
D)   None of the above are true.E) A) and C)
F) All of the above

Question 11

As capital per worker rises,output per worker rises.However,this increase in output per worker is smaller at larger levels of existing capital per worker.

Accepted Answer

A) True 
 B)False

Question 12

An economy's production function has the constant-returns-to-scale property.If the economy's labor force doubled and all other inputs stayed the same,then real GDP would

Accepted Answer

A)   stay the same.
B)   increase by exactly 50 percent.
C)   increase by exactly 100 percent.
D)   increase,but not necessarily by either 50 percent or 100 percent.E) A) and C)
F) A) and B)

Question 13

Investment in human capital has opportunity costs,but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 14

Over the past century in the United States,average income as measured by real GDP per person has grown about

Accepted Answer

A)   4 percent per year,which implies a doubling about every 18 years.
B)   4 percent per year,which implies a doubling about every 8 years.
C)   2 percent per year,which implies a doubling about every 35 years.
D)   2 percent per year,which implies a doubling about every 18 years.E) A) and B)
F) A) and C)

Question 15

An increase in a country's saving rate permanently raises its productivity.

Accepted Answer

A) True 
 B)False

Question 16

If a country's saving rate declined,then other things the same,in the long run the country would have

Accepted Answer

A)   lower productivity,but not lower real GDP per person.
B)   lower productivity and lower real GDP per person.
C)   lower real GDP per person,but not lower productivity
D)   neither lower productivity nor lower real GDP per person.E) C) and D)
F) A) and C)

Question 17

Real Foods produced 400,000 cans of diced tomatoes in 2009 and 460,000 cans of diced tomatoes in 2010.It employed the same number of labor hours each year.Real Foods' productivity

Accepted Answer

A)   decreased 13 percent.
B)   was unchanged.
C)   increased 13 percent.
D)   increased 15 percent.E) B) and C)
F) All of the above

Question 18

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Accepted Answer

A)   Ethiopia
B)   the United States
C)   Canada
D)   South KoreaE) B) and D)
F) B) and C)

Question 19

Other things the same,another unit of capital will increase output by more in a poor country than in a rich country.

Accepted Answer

A) True 
 B)False

Question 20

Once an idea enters society's pool of knowledge,the idea becomes a

Accepted Answer

A)   societal good.
B)   private good.
C)   public good.
D)   proprietary good.E) None of the above
F) A) and C)

Exam 25: Production and Growth

Investment in human capital has opportunity costs,but investment in physical capital does not.

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Which of the following is correct?

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Refer to Scenario 12-1.K represents the quantity of

Correct AnswerverifiedShow Answer

Productivity

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Other things the same,another unit of capital will increase output by more in a poor country than in a rich country.

Correct AnswerverifiedShow Answer

International data on the history of real GDP growth rates shows that over the last 110 years or so,rich countries got richer and poor countries got poorer.

Correct AnswerverifiedShow Answer

Once an idea enters society's pool of knowledge,the idea becomes a

Correct AnswerverifiedShow Answer

An economy's production function has the constant-returns-to-scale property.If the economy's labor force doubled and all other inputs stayed the same,then real GDP would

Correct AnswerverifiedShow Answer

In 1870,the richest country in the world was

Correct AnswerverifiedShow Answer

Which of the following would increase productivity?

Correct AnswerverifiedShow Answer

Educational attainment tends to be

Correct AnswerverifiedShow Answer

Real Foods produced 400,000 cans of diced tomatoes in 2009 and 460,000 cans of diced tomatoes in 2010.It employed the same number of labor hours each year.Real Foods' productivity

Correct AnswerverifiedShow Answer

In recent decades Americans have increased their purchase of stocks of foreign-based companies.The Americans who have bought these stocks were engaged in

Correct AnswerverifiedShow Answer

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Correct AnswerverifiedShow Answer

Over the past century in the United States,average income as measured by real GDP per person has grown about

Correct AnswerverifiedShow Answer

An increase in a country's saving rate permanently raises its productivity.

Correct AnswerverifiedShow Answer

Industrial machinery is an example of

Correct AnswerverifiedShow Answer

As capital per worker rises,output per worker rises.However,this increase in output per worker is smaller at larger levels of existing capital per worker.

Correct AnswerverifiedShow Answer

The president of Suldinia,a developing country,proposes that his country needs to help domestic firms by reducing trade restrictions.

Correct AnswerverifiedShow Answer

If a country's saving rate declined,then other things the same,in the long run the country would have

Correct AnswerverifiedShow Answer

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