Question 1

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

Accepted Answer

A)   proprietary and common knowledge.
B)   neither proprietary nor common knowledge.
C)   proprietary, but not common, knowledge.
D)   common, but not proprietary, knowledge.E) B) and D)
F) B) and C)

Question 2

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

Accepted Answer

A)   and real GDP per person rise.
B)   rises but real GDP per person falls.
C)   falls and real GDP per person rises.
D)   and real GDP per person fall.E) A) and B)
F) A) and D)

Question 3

Rapid population growth

Accepted Answer

A)   was hailed by Thomas Robert Malthus as the key to future economic growth.
B)   tends to lead to higher levels of educational attainment.
C)   is the main reason that less developed nations are poor.
D)   may depress economic prosperity by reducing the amount of capital which each worker has to work with.E) A) and D)
F) C) and D)

Question 4

Why does a nation's standard of living depend on property rights?

Accepted Answer

Property rights are an important prerequ...

Question 5

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this 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) A) and C)

Question 6

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's productivity?

Accepted Answer

A)   800 bowling balls
B)   100 bowling balls per hour
C)   50 bowling balls per hour
D)   None of the above is correct.E) C) and D)
F) None of the above

Question 7

Suppose Turkey increases its saving rate. In the long run

Accepted Answer

A)   the growth rates of productivity and real GDP per person increase.
B)   productivity and real GDP per person increase.
C)   the growth rate of productivity increases, and real GDP per person increases.
D)   productivity increases, and the growth rate of real GDP per person increases.E) All of the above
F) None of the above

Question 8

Technological knowledge refers to

Accepted Answer

A)   human capital.
B)   available information on how to produce things.
C)   resources expended transmitting society's understanding to the labor force.
D)   All of the above are technological knowledge.E) A) and B)
F) A) and C)

Question 9

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

Question 10

Which of the following is not correct?

Accepted Answer

A)   China allows only one child per family and couples that violate this rule are subject to substantial fines.
B)   In developed countries, population growth is consistently about 3 percent per year; in developing countries it is consistently about 5 percent per year.
C)   Educational attainment tends to be lowest in countries with the highest population growth.
D)   Economists generally believe that a country that decreases a high population growth rate can increase its economic growth rate.E) None of the above
F) B) and D)

Question 11

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

Accepted Answer

A) True 
 B)False

Question 12

In 2009, the imaginary nation of Florastan had a population of 8,044 and real GDP of 36,198,000. In 2010 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Florastan between 2009 and 2010?

Accepted Answer

A)   -2.2 percent
B)   -0.7 percent
C)   2.2 percent
D)   4.5 percentE) A) and D)
F) B) and D)

Question 13

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

Question 14

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 15

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Accepted Answer

A)   country A, and the country with higher real GDP per person was country A.
B)   country A, and the country with higher real GDP per person was country B.
C)   country B, and the country with higher real GDP per person was country A.
D)   country B, and the country with higher real GDP per person was country B.E) B) and C)
F) A) and D)

Question 16

Over the period 1900-2008, Brazil's rate of economic growth exceeded that of China.

Accepted Answer

A) True 
 B)False

Question 17

The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Accepted Answer

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

Question 18

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

Accepted Answer

A)   Country A has higher productivity and higher real GDP per person than country B.
B)   Country A has lower productivity and lower real GDP per person than country B.
C)   Country A has higher productivity, but lower real GDP per person than country B.
D)   Country B has lower productivity, but higher real GDP per person than country B.E) A) and B)
F) A) and D)

Question 19

Accumulating capital

Accepted Answer

A)   requires that society sacrifice consumption goods in the present.
B)   allows society to consume more in the present.
C)   decreases saving rates.
D)   involves no tradeoffs.E) A) and C)
F) A) and D)

Question 20

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

Exam 7: Production and Growth

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

Correct AnswerverifiedShow Answer

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Strike Out Bowling Balls produces 800 bowling balls per day using 2 workers who each work 8 hours per day. What is Strike Out's productivity?

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Over the period 1900-2008, Brazil's rate of economic growth exceeded that of China.

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Accumulating capital

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Which of the following is not correct?

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In 2009, the imaginary nation of Florastan had a population of 8,044 and real GDP of 36,198,000. In 2010 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Florastan between 2009 and 2010?

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

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Rapid population growth

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If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

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Technological knowledge refers to

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

Correct AnswerverifiedShow Answer

Country A has a population of 1,000, of whom 700 worked an average of 8 hours a day and had a productivity of 2.5. Country B has a population of 800, of whom 560 worked 8 hours a day and had productivity of 3.0. The country with the higher real GDP was

Correct AnswerverifiedShow Answer

Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods.

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Why does a nation's standard of living depend on property rights?

Correct AnswerverifiedProperty rights are an important prerequ...View AnswerShow Answer

Suppose Turkey increases its saving rate. In the long run

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If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

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The saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce furniture are called

Correct AnswerverifiedShow Answer

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Property rights are an important prerequ...
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