Question 1

Currently a country has real GDP per person of 500. Raising capital per worker by one would increase output per worker by 4. Other things the same, which of the following long-run combinations are consistent with the effects of this country increasing its saving rate?

Accepted Answer

A)   real GDP per person is 520 and raising capital per worker by one would increase output per worker by 3
B)   real GDP per person is 520 and raising capital per worker by one would increase output per worker by 5
C)   real GDP per person is 480 and raising capital per worker by one would increase output per worker by 3
D)   real GDP per person is 480 and raising capital per worker by one would increase output per worker by 5E) All of the above
F) A) and B)

Question 2

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 3

Which of the following correctly ranks the three countries, from highest to lowest, for percentage of high-school age children in school?

Accepted Answer

A)   United Kingdom, Mali, Mexico.
B)   Mexico, Mali, United Kingdom.
C)   United Kingdom, Mexico, Mali.
D)   Mali, Mexico, United Kingdom.E) None of the above
F) A) and C)

Question 4

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Accepted Answer

A)   8
B)   10
C)   80
D)   120E) B) and C)
F) None of the above

Question 5

In order for the standard of living within a country to be enhanced over time, which of the following is essential?

Accepted Answer

A)   The role of the country's government in the economy must become larger.
B)   The population of the country must increase.
C)   More domestic natural resources must be discovered and used.
D)   The level of productivity must increase.E) A) and B)
F) A) and C)

Question 6

An organization that tries to encourage the flow of investment to poor countries is the

Accepted Answer

A)   World Bank.
B)   Organization of Less Developed Countries.
C)   Alliance of Developing Countries.
D)   International Development Alliance.E) A) and C)
F) A) and B)

Question 7

When a country imposes tariffs, intending to protect domestic firms from foreign competition, it is pursuing_______-oriented policies.

Accepted Answer

The answer of When a country imposes tariffs, intending to...

Question 8

Malthus predicted that the power of population

Accepted Answer

A)   was greater than the power of the earth to produce subsistence. His forecast was on the mark.
B)   was greater than the power of the earth to produce subsistence. His forecast was off the mark.
C)   was less than the power of the earth to produce subsistence. His forecast was on the mark.
D)   was less than the power of the earth to produce subsistence. His forecast was off the mark.E) B) and C)
F) C) and D)

Question 9

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

Accepted Answer

A)   increased.
B)   decreased.
C)   stayed the same.
D)   might have increased, decreased or stayed the same; more information is needed to be sure.E) All of the above
F) B) and D)

Question 10

Suppose that over the last year the price of copper increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Accepted Answer

A)   less than inflation, and this means it became relatively less scarce.
B)   less than inflation, and this means it became scarcer.
C)   more than inflation, and this means it became scarcer.
D)   more than inflation, but this doesn't necessarily mean that it become scarcer.E) A) and D)
F) C) and D)

Question 11

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) A) and C)
F) B) and D)

Question 12

Productivity is the amount of goods and services

Accepted Answer

A)   an economy produces. It is not linked to a nation's economic policies.
B)   an economy produces. It is linked to a nation's economic policies.
C)   produced for each hour of a worker's time. It is not linked to a nation's economic policies.
D)   produced for each hour of a worker's time. It is linked to a nation's economic policies.E) A) and B)
F) B) and D)

Question 13

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)   5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller.
B)   10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller.
C)   5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.
D)   10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.E) B) and C)
F) A) and B)

Question 14

What word do we use to refer to the amount of goods and services produced for each hour of a worker's time?

Accepted Answer

The word i...

Question 15

In the long run, a higher saving rate

Accepted Answer

A)   cannot increase the capital stock.
B)   increases the growth rate of income.
C)   increases the growth rate of productivity.
D)   None of the above is correct.E) A) and C)
F) A) and B)

Question 16

Which of the following is an example of a nonrenewable natural resource?

Accepted Answer

A)   tin
B)   petroleum
C)   gold
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 17

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Accepted Answer

No. Japan is an example of a c...

Question 18

Countries that pursued outward-oriented policies in the 20th century

Accepted Answer

A)   experienced lower rates of economic growth than did countries that pursued inward-oriented policies.
B)   experienced higher levels of political instability than did countries that pursued inward-oriented policies.
C)   include Singapore, South Korea, and Taiwan.
D)   All of the above are correct.E) A) and C)
F) A) and D)

Question 19

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Accepted Answer

A) True 
 B)False

Question 20

Other things the same, a country that increases its savings rate will have

Accepted Answer

A)   higher future capital and higher future real GDP per person.
B)   higher future capital but not higher future real GDP per person.
C)   higher future real GDP per person but not higher future capital.
D)   neither higher future capital nor higher future real GDP per person.E) A) and C)
F) None of the above

Exam 12: Production and Growth

Currently a country has real GDP per person of 500. Raising capital per worker by one would increase output per worker by 4. Other things the same, which of the following long-run combinations are consistent with the effects of this country increasing its saving rate?

Correct AnswerverifiedShow Answer

What word do we use to refer to the amount of goods and services produced for each hour of a worker's time?

Correct AnswerverifiedThe word i...View AnswerShow Answer

Malthus predicted that the power of population

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

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Correct AnswerverifiedShow Answer

In order for the standard of living within a country to be enhanced over time, which of the following is essential?

Correct AnswerverifiedShow Answer

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Correct AnswerverifiedShow Answer

Suppose that over the last year the price of copper increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Correct AnswerverifiedShow Answer

Which of the following is an example of a nonrenewable natural resource?

Correct AnswerverifiedShow Answer

When a country imposes tariffs, intending to protect domestic firms from foreign competition, it is pursuing_______-oriented policies.

Correct AnswerverifiedShow Answer

Countries that pursued outward-oriented policies in the 20th century

Correct AnswerverifiedShow Answer

Other things the same, a country that increases its savings rate will have

Correct AnswerverifiedShow Answer

In the long run, a higher saving rate

Correct AnswerverifiedShow Answer

Which of the following correctly ranks the three countries, from highest to lowest, for percentage of high-school age children in school?

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 U.S., each additional year of schooling has historically raised a person's wage on average by about

Correct AnswerverifiedShow Answer

Productivity is the amount of goods and services

Correct AnswerverifiedShow Answer

An organization that tries to encourage the flow of investment to poor countries is the

Correct AnswerverifiedShow Answer

Suppose that in some country the price of silver increased from $30 per ounce to $31 per ounce during a time when the overall price level increased by 5 percent. During this period, the real price of silver

Correct AnswerverifiedShow Answer

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Correct AnswerverifiedNo. Japan is an example of a c...View AnswerShow Answer

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No. Japan is an example of a c...
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