Question 1

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called

Accepted Answer

A)  physical capital.
B)  natural resources.
C)  human capital.
D)  technological knowledge.E) A) and D)
F) C) and D)

Question 2

Each day Sonja works 8 hours and produces 8 units of goods and services. Emma works 10 hours each day and produces 9 units of goods and services. It follows that

Accepted Answer

A)  Sonja's productivity is higher than Emma's.
B)  Emma's productivity is higher than Sonja's.
C)  Emma's income per hour will be higher than Sonja's.
D)  Sonja's income per day will be higher than Emma's.E) A) and B)
F) B) and D)

Question 3

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Accepted Answer

A) True 
 B)False

Question 4

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. 
-Refer to Table 12-1. Which of the following is correct?

Accepted Answer

A)  Both real GDP and real GDP per person are higher in Athens than Troy.
B)  Real GDP is higher in Athens while real GDP per person is higher in Troy
C)  Real GDP is higher in Troy while real GDP per person is higher in Athens.
D)  Both real GDP and real GDP per person are higher in Troy than Athens.E) B) and D)
F) None of the above

Question 5

What is the difference between human capital and technology?

Accepted Answer

Technology is society's understanding of...

Question 6

Suppose a person receives an education in her home country. Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Accepted Answer

A)  externalities and brain drain
B)  externalities but not brain drain
C)  brain drain but not externalities
D)  neither externalities nor brain drainE) A) and D)
F) None of the above

Question 7

The president of a poor country has announced that he will implement the following measures which he claims are designed to increase growth: 1. Reduce corruption in the legal system; 2. Reduce reliance on market forces because they allocate goods and services in an unfair manner; 3. Restrict investment in domestic industries by foreigners because they take some of the profits out of the country; 4. Encourage trade with neighboring countries; and 5. Increase the fraction of GDP devoted to consumption. How many of these measures will have a positive effect on growth?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) None of the above
F) All of the above

Question 8

Country A and country B are the same except country A has a capital stock of 5,000 a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000 and a population of 24,000 and employment of 20,000.

Accepted Answer

A)  Country A has a higher standard of living and country B will not catch up.
B)  Country A has a higher standard of living but country B will catch up.
C)  Country B has a higher standard of living and country A will not catch up.
D)  Country B has a higher standard of living but country A will catch up.E) B) and C)
F) All of the above

Question 9

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Accepted Answer

A)  higher productivity, and a higher growth rate of real GDP.
B)  higher productivity, but not a higher growth rate of real GDP.
C)  the same productivity and growth of real GDP it began with.
D)  None of the above is correct.E) A) and D)
F) C) and D)

Question 10

In the long run, a higher saving rate

Accepted Answer

A)  cannot increase the capital stock.
B)  means that people must consume less in the future.
C)  increases the level of productivity.
D)  None of the above is correct.E) None of the above
F) C) and D)

Question 11

Over the period 1890-2008, Japan experienced a 2.71 percent average annual growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 12

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Accepted Answer

A)  reduce real GDP per person and productivity.
B)  reduce real GDP per person but not productivity.
C)  reduce productivity but not real GDP per person.
D)  None of the above is correct.E) C) and D)
F) A) and B)

Question 13

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 14

Investment in

Accepted Answer

A)  physical capital, unlike investment in human capital, has an opportunity cost.
B)  physical capital, like investment in human capital, has an opportunity cost.
C)  human capital is particularly attractive because it involves no externalities.
D)  human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country's long-run economic success.E) A) and B)
F) A) and C)

Question 15

All else equal, which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)  a change from inward-oriented policies to outward-oriented policies
B)  an increase in investment in human capital
C)  strengthening of property rights.
D)  All of the above are correct.E) All of the above
F) C) and D)

Question 16

Which of the following is physical capital?

Accepted Answer

A)  the strength of workers
B)  the knowledge of workers
C)  financial assets like cash and bonds
D)  the equipment in a factoryE) A) and B)
F) A) and C)

Question 17

According to some estimates, over the last two decades China has had an annual average growth rate of about 12 percent.

Accepted Answer

A) True 
 B)False

Question 18

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Accepted Answer

A)  The poor country has outward-oriented trade policies.
B)  The poor country allows foreign direct investment.
C)  The poor country has poorly developed property rights.
D)  All of the above are correct.E) B) and C)
F) C) and D)

Question 19

If an American-based firm opens and operates a new watch factory in Panama, then it is engaging in

Accepted Answer

A)  foreign portfolio investment.
B)  foreign financial investment.
C)  foreign direct investment.
D)  indirect foreign investment.E) None of the above
F) All of the above

Question 20

If a country's saving rate increases, then in the long run

Accepted Answer

A)  productivity is higher but real GDP per person is not higher.
B)  real GDP per person is higher but productivity is not higher.
C)  productivity and real GDP per person are both higher.
D)  neither productivity nor real GDP per person is higher.E) C) and D)
F) A) and B)

Exam 12: Production and Growth

Suppose a person receives an education in her home country. Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Correct Answer
verified

Investment in

Correct Answer
verified

If a country's saving rate increases, then in the long run

Correct Answer
verified

What is the difference between human capital and technology?

Correct Answer
verified
Technology is society's understanding of...
View Answer

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Correct Answer
verified

All else equal, which of the following would tend to cause real GDP per person to rise?

Correct Answer
verified

Country A and country B are the same except country A has a capital stock of 5,000 a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000 and a population of 24,000 and employment of 20,000.

Correct Answer
verified

According to some estimates, over the last two decades China has had an annual average growth rate of about 12 percent.

Correct Answer
verified

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Correct Answer
verified

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct Answer
verified

Over the period 1890-2008, Japan experienced a 2.71 percent average annual growth rate of real GDP per person.

Correct Answer
verified

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called

Correct Answer
verified

Which of the following is physical capital?

Correct Answer
verified

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 12-1. Which of the following is correct?

Correct Answer
verified

Each day Sonja works 8 hours and produces 8 units of goods and services. Emma works 10 hours each day and produces 9 units of goods and services. It follows that

Correct Answer
verified

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct Answer
verified

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct Answer
verified

In the long run, a higher saving rate

Correct Answer
verified

Correct Answer
verified

If an American-based firm opens and operates a new watch factory in Panama, then it is engaging in

Correct Answer
verified

Exam 12: Production and Growth

Suppose a person receives an education in her home country. Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Correct AnswerverifiedShow Answer

Investment in

Correct AnswerverifiedShow Answer

If a country's saving rate increases, then in the long run

Correct AnswerverifiedShow Answer

What is the difference between human capital and technology?

Correct AnswerverifiedTechnology is society's understanding of...View AnswerShow Answer

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Correct AnswerverifiedShow Answer

All else equal, which of the following would tend to cause real GDP per person to rise?

Correct AnswerverifiedShow Answer

Country A and country B are the same except country A has a capital stock of 5,000 a population of 12,000 and employment of 10,000. Country B has a capital stock of 8,000 and a population of 24,000 and employment of 20,000.

Correct AnswerverifiedShow Answer

According to some estimates, over the last two decades China has had an annual average growth rate of about 12 percent.

Correct AnswerverifiedShow Answer

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Correct AnswerverifiedShow Answer

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct AnswerverifiedShow Answer

Over the period 1890-2008, Japan experienced a 2.71 percent average annual growth rate of real GDP per person.

Correct AnswerverifiedShow Answer

The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called

Correct AnswerverifiedShow Answer

Which of the following is physical capital?

Correct AnswerverifiedShow Answer

Table 12-1.Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 12-1. Which of the following is correct?

Correct AnswerverifiedShow Answer

Each day Sonja works 8 hours and produces 8 units of goods and services. Emma works 10 hours each day and produces 9 units of goods and services. It follows that

Correct AnswerverifiedShow Answer

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct AnswerverifiedShow Answer

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct AnswerverifiedShow Answer

In the long run, a higher saving rate

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If an American-based firm opens and operates a new watch factory in Panama, then it is engaging in

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
verified
Technology is society's understanding of...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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