Question 1

In 2012,real GDP in Latania was $750 billion and the population was 3 million.In 2013,real GDP was $990 billion and the population was 3.3 million.What was the approximate growth rate of real GDP per person?

Accepted Answer

A)  11 percent
B)  14 percent
C)  17 percent
D)  20 percentE) B) and D)
F) A) and B)

Question 2

Other things equal,how do relatively poor countries tend to grow?

Accepted Answer

A)  They grow slower than relatively rich countries; this is called the poverty trap.
B)  They grow slower than relatively rich countries; this is called the Malthus effect.
C)  They grow faster than relatively rich countries; this is called the catch-up effect.
D)  They grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.E) All of the above
F) A) and D)

Question 3

Which of the following would NOT be considered physical capital?

Accepted Answer

A)  a new factory building
B)  a computer used to help Mercury Delivery Service keep track of their orders
C)  on-the-job training
D)  a desk used in an accountant's officeE) B) and D)
F) A) and D)

Question 4

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.How are his findings best defined?

Accepted Answer

A)  proprietary knowledge, because only who the person pays for the journal has access to the findings
B)  common knowledge, because scientific publications are not subject to copyright
C)  proprietary knowledge, because the discoverer has intellectual property rights over the findings
D)  common knowledge, because all are free to use the findingsE) C) and D)
F) A) and D)

Question 5

How can a government encourage growth and,in the long run,raise the country's economic standard of living?

Accepted Answer

A)  by encouraging population growth
B)  by encouraging consumption
C)  by encouraging saving and investment
D)  by increasing government spendingE) All of the above
F) B) and C)

Question 6

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada.What would the future production from such an investment do?

Accepted Answer

A)  increase Canadian GNP more than it would increase Canadian GDP
B)  increase Canadian GDP more than it would increase Canadian GNP
C)  not affect Canadian GNP, but it would increase Canadian GDP
D)  not affect Canadian GDP, but it would increase Canadian GNPE) C) and D)
F) A) and B)

Question 7

Which of the following is an important fact about population growth?

Accepted Answer

A)  There are no substantial differences between rates of growth in population among countries.
B)  In developed countries, population tends to grow slower than in developing countries.
C)  Higher rate of growth in population implies higher productivity.
D)  Economists generally believe that a country that increases its population growth rate will increase its economic growth rate.E) None of the above
F) C) and D)

Question 8

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean.Make a list of things that determine labour productivity.

Accepted Answer

The standard of living is a measure of h...

Question 9

Which of the following best explains how investment and growth rates relate across countries?

Accepted Answer

A)  They are negatively related.
B)  They are positively related.
C)  They are negatively related for rich countries, but positively related for poor countries.
D)  They are positively related for rich countries, but negatively related for poor countries.E) B) and C)
F) A) and B)

Question 10

In the traditional view,which of the following production processes is considered when studying economic growth?

Accepted Answer

A)  constant returns
B)  increasing returns
C)  diminishing returns
D)  diminishing returns for low levels of capital, and increasing returns for high levels of capitalE) B) and C)
F) A) and D)

Question 11

Compare and contrast the population theories of Malthus and Kremer.

Accepted Answer

The difference is that Malthus predicted...

Question 12

Dawn looks over reports on five of her workers.Carol made 25 baskets in 5 hours.Peter made 36 baskets in 6 hours.Rob made 40 baskets in 10 hours.Jack made 55 baskets in 10 hours.Darby made 22 baskets in 3 hours.Who has the greatest productivity?

Accepted Answer

A)  Darby
B)  Peter
C)  Rob
D)  JackE) A) and B)
F) A) and C)

Question 13

From 1960 to 1990,what happened to the growth rates of Canada and South Korea?

Accepted Answer

A)  South Korea had a higher growth rate than Canada because it had a higher ratio of investment to GDP.
B)  Canada had a higher growth rate than South Korea because it had a higher ratio of investment to GDP.
C)  South Korea had a higher growth rate than Canada, even though it had a similar ratio of investment to GDP.
D)  Canada had a higher growth rate than South Korea, even though it had a similar ratio of investment to GDP.E) All of the above
F) A) and D)

Question 14

Which of the following is a characteristic of inward-oriented policies?

Accepted Answer

A)  They are generally supported by economists.
B)  They are primarily concerned with the development of human capital.
C)  They are in some ways like prohibiting the use of certain technologies.
D)  They are generally rejected by domestic producers in import-competing industries.E) A) and D)
F) A) and C)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The average person in a rich country,such as Germany,has income about ten times that of an average person in a poor country,such as Indonesia.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following best describes changes in the average well-being in a country?

Accepted Answer

A)  the growth rate of government transfers
B)  the growth rate of nominal GDP
C)  the growth rate of real GDP
D)  the growth rate of real GDP per personE) All of the above
F) A) and B)

Question 18

Which of the following best describes the relationship between productivity and standard of living?

Accepted Answer

A)  International trade makes a country's productivity irrelevant.
B)  A country's standard of living and its productivity are closely related.
C)  Productivity only increases revenue to investors, while general well-being is not affected.
D)  A rich country can enjoy a high standard of living without the need for high productivity.E) A) and C)
F) A) and B)

Question 19

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,what would happen to productivity?

Accepted Answer

A)  It would fall to half its former value.
B)  It would fall, but by less than half.
C)  It would stay the same.
D)  It would rise, but by less than double.E) A) and B)
F) None of the above

Question 20

If a production function has constant returns to scale,how can output be doubled?

Accepted Answer

A)  by doubling labour
B)  by doubling any one of the inputs
C)  by doubling all of the inputs
D)  by increasing all inputs by more than doubleE) B) and D)
F) B) and C)

Exam 7: Production and Growth

Which of the following is a characteristic of inward-oriented policies?

Correct AnswerverifiedShow Answer

Dawn looks over reports on five of her workers.Carol made 25 baskets in 5 hours.Peter made 36 baskets in 6 hours.Rob made 40 baskets in 10 hours.Jack made 55 baskets in 10 hours.Darby made 22 baskets in 3 hours.Who has the greatest productivity?

Correct AnswerverifiedShow Answer

If a production function has constant returns to scale,how can output be doubled?

Correct AnswerverifiedShow Answer

Compare and contrast the population theories of Malthus and Kremer.

Correct AnswerverifiedThe difference is that Malthus predicted...View AnswerShow Answer

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean.Make a list of things that determine labour productivity.

Correct AnswerverifiedThe standard of living is a measure of h...View AnswerShow Answer

How can a government encourage growth and,in the long run,raise the country's economic standard of living?

Correct AnswerverifiedShow Answer

Which of the following best explains how investment and growth rates relate across countries?

Correct AnswerverifiedShow Answer

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,what would happen to productivity?

Correct AnswerverifiedShow Answer

Which of the following best describes changes in the average well-being in a country?

Correct AnswerverifiedShow Answer

Which of the following would NOT be considered physical capital?

Correct AnswerverifiedShow Answer

In the traditional view,which of the following production processes is considered when studying economic growth?

Correct AnswerverifiedShow Answer

In 2012,real GDP in Latania was $750 billion and the population was 3 million.In 2013,real GDP was $990 billion and the population was 3.3 million.What was the approximate growth rate of real GDP per person?

Correct AnswerverifiedShow Answer

The average person in a rich country,such as Germany,has income about ten times that of an average person in a poor country,such as Indonesia.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Other things equal,how do relatively poor countries tend to grow?

Correct AnswerverifiedShow Answer

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada.What would the future production from such an investment do?

Correct AnswerverifiedShow Answer

From 1960 to 1990,what happened to the growth rates of Canada and South Korea?

Correct AnswerverifiedShow Answer

Which of the following best describes the relationship between productivity and standard of living?

Correct AnswerverifiedShow Answer

A management professor discovers a way for corporate management to operate more efficiently.He publishes his findings in a journal.How are his findings best defined?

Correct AnswerverifiedShow Answer

Which of the following is an important fact about population growth?

Correct AnswerverifiedShow Answer

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The difference is that Malthus predicted...
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The standard of living is a measure of h...
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