Question 1

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Accepted Answer

A) True 
 B)False

Question 2

Other things the same,a country that increases its saving rate increases

Accepted Answer

A)   its future productivity and future real GDP.
B)   neither its future productivity nor future real GDP.
C)   its future productivity,but not its future real GDP.
D)   its future real GDP,but not its future productivity.E) A) and C)
F) A) and B)

Question 3

In a particular production process,if the quantities of all inputs used double,then the quantity of output doubles as well.This means that

Accepted Answer

A)   the production process cannot be enhanced by technological advances.
B)   no mathematical representation of the relevant production function can be formulated.
C)   the relevant production function has the limits-to-growth property.
D)   the relevant production function has the constant-returns-to-scale property.E) C) and D)
F) B) and D)

Question 4

Over the last century,U.S.real GDP per person grew at a rate of about

Accepted Answer

A)   2 percent per year,so that it is now 2 times as high as it was a century ago.
B)   2 percent per year,so that it is now 8 times as high as it was a century ago.
C)   4 percent per year,so that it is now 2 times as high as it was a century ago.
D)   4 percent per year,so that it is now 8 times as high as it was a century ago.E) A) and B)
F) B) and C)

Question 5

Proprietary technology is knowledge that is

Accepted Answer

A)   known but no longer used much.
B)   known,but only recently discovered.
C)   known mostly by only those in a certain profession.
D)   known only by the company that discovered it.E) A) and C)
F) C) and D)

Question 6

Real GDP per person in rich countries,such as Germany,is sometimes more than 10 times that of poor countries like India.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an example of the "brain drain?"

Accepted Answer

A)   A country's most highly educated workers emigrate to rich countries.
B)   A country has such a poor educational system that human capital falls over time.
C)   The population of a country grows so fast that the educational system can't keep up.
D)   A country steals patented technology from another country.E) B) and C)
F) C) and D)

Question 8

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Accepted Answer

A)   its output would stay the same and so would its productivity.
B)   its output and productivity would increase,but less than double.
C)   its output and productivity would increase by more than double.
D)   None of the above is correct.E) All of the above
F) A) and D)

Question 9

Which of the following is correct?

Accepted Answer

A)   If developing countries limit career and educational opportunities for women,birth rates are likely to be lower.
B)   Growth rates in developed and developing countries are nearly the same.
C)   Historically,in periods where the rate of population growth was high,so was the rate of growth in world real GDP per person.
D)   None of the above is correct.E) All of the above
F) None of the above

Question 10

If companies from foreign countries build and operate factories in China,then China's productivity

Accepted Answer

A)   and the wages of Chinese workers increase.
B)   increases but the wages of Chinese workers decrease.
C)   decreases but the wages of Chinese workers increase.
D)   and the wages of Chinese workers decrease.E) B) and D)
F) A) and D)

Question 11

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

A) True 
 B)False

Question 12

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) None of the above
F) B) and D)

Question 13

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 14

If a country increases its saving rate in the long run

Accepted Answer

A)   K/L and productivity will be higher.
B)   K/L will be higher but productivity will not be higher.
C)   K/L will not be higher but productivity will be higher.
D)   neither K/L nor productivity will be higher.E) A) and B)
F) C) and D)

Question 15

In 2008,real GDP per person in Bangladesh was

Accepted Answer

A)   about 3 times as high as it was in the U.S.in 1870.
B)   about twice as high as it was in the U.S.in 1870.
C)   about the same as it was in the U.S.in 1870.
D)   less than it was in the U.S.in 1870.E) All of the above
F) A) and B)

Question 16

If your firm's production function has constant returns to scale and you increase all your inputs by 60%,then your firm's output will

Accepted Answer

A)   not change.
B)   increase,but by less than 60%
C)   increase by 60%
D)   increase by more than 60%.E) None of the above
F) All of the above

Question 17

Economists differ in their views of the role of the government in promoting economic growth.At the very least,the government should

Accepted Answer

A)   lend support to the invisible hand by maintaining property rights and political stability.
B)   limit foreign investment to industries that don't already exist in the country.
C)   impose trade restrictions to protect the interests of domestic producers and consumers.
D)   subsidize key industries.E) A) and B)
F) A) and C)

Question 18

An increase in capital will increase real GDP per person

Accepted Answer

A)   more in a poor country than a rich country.The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment.
B)   more in a poor country than a rich country.The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.
C)   less in a poor country than a rich country.The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment.
D)   less in a poor country than a rich country.The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.E) All of the above
F) None of the above

Question 19

Other things the same,if a country raises its saving rate,when is productivity growth higher?

Accepted Answer

A)   as the economy moves toward the long run and in the long run.
B)   as the economy moves toward the long run,but not in the long run.
C)   in the long run,but not as the economy moves toward the long run.
D)   neither as the economy moves toward the long run,nor in the long run.E) A) and D)
F) B) and C)

Question 20

In some countries it is time consuming and costly to establish ownership of property.Reforms to reduce these costs would likely

Accepted Answer

A)   have no affect on either real GDP nor productivity
B)   raise real GDP and productivity.
C)   raise real GDP but not productivity.
D)   raise productivity but not real GDP.E) B) and D)
F) C) and D)

Exam 17: Production and Growth

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

Correct AnswerverifiedShow Answer

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Correct AnswerverifiedShow Answer

Other things the same,if a country raises its saving rate,when is productivity growth higher?

Correct AnswerverifiedShow Answer

If companies from foreign countries build and operate factories in China,then China's productivity

Correct AnswerverifiedShow Answer

If your firm's production function has constant returns to scale and you increase all your inputs by 60%,then your firm's output will

Correct AnswerverifiedShow Answer

Proprietary technology is knowledge that is

Correct AnswerverifiedShow Answer

Real GDP per person in rich countries,such as Germany,is sometimes more than 10 times that of poor countries like India.

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

In a particular production process,if the quantities of all inputs used double,then the quantity of output doubles as well.This means that

Correct AnswerverifiedShow Answer

In some countries it is time consuming and costly to establish ownership of property.Reforms to reduce these costs would likely

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

An increase in capital will increase real GDP per person

Correct AnswerverifiedShow Answer

Over the last century,U.S.real GDP per person grew at a rate of about

Correct AnswerverifiedShow Answer

Economist Michael Kremer found that world growth rates fell as population increased.

Correct AnswerverifiedShow Answer

Other things the same,a country that increases its saving rate increases

Correct AnswerverifiedShow Answer

If a country increases its saving rate in the long run

Correct AnswerverifiedShow Answer

Which of the following is an example of the "brain drain?"

Correct AnswerverifiedShow Answer

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Correct AnswerverifiedShow Answer

Economists differ in their views of the role of the government in promoting economic growth.At the very least,the government should

Correct AnswerverifiedShow Answer

In 2008,real GDP per person in Bangladesh was

Correct AnswerverifiedShow Answer

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