Question 1

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 2

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Accepted Answer

A)   the level of saving per person is 5.000 in Country A and 7,500 in Country B.
B)   the level of saving per person is 3,000 in Country A and 6,000 in Country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) B) and D)
F) None of the above

Question 3

When a society decides to increase its quantity of physical capital, the society

Accepted Answer

A)   can avoid the usual need to face trade-offs.
B)   is apparently not very concerned about its rate of economic growth in the future.
C)   is in effect deciding to consume fewer goods and services in the present.
D)   is in effect deciding to save less of its current income in the present.E) B) and C)
F) None of the above

Question 4

Technological knowledge

Accepted Answer

A)   is the same thing as human capital.
B)   can be discovered but it can never be kept secret.
C)   is a determinant of productivity.
D)   does not play a role in the relationship that economists call the production function.E) None of the above
F) C) and D)

Question 5

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society

Accepted Answer

A)   conserve resources for future generations.
B)   sacrifice consumption goods and services now in order to enjoy more consumption in the future.
C)   recycle resources so that future generations can produce goods and services with the accumulated capital.
D)   None of the above is correct.E) None of the above
F) B) and C)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Historically, the market prices of most natural resources adjusted for inflation)  have

Accepted Answer

A)   increased.
B)   remained stable.
C)   remained stable or decreased.
D)   decreased.E) None of the above
F) A) and D)

Question 8

Which of the following is an example of human capital?

Accepted Answer

A)   textbooks
B)   hand held power tools
C)   knowing how to repair cars
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 9

If there are diminishing returns to capital, then

Accepted Answer

A)   capital produces fewer goods as it ages.
B)   old ideas are not as useful as new ones.
C)   increases in the capital stock eventually decrease output.
D)   increases in the capital stock increase output by ever smaller amounts.E) C) and D)
F) B) and C)

Question 10

Which of the following is an example of physical capital?

Accepted Answer

A)   the computer a secretary uses
B)   rivers on which goods are transported
C)   the skills and knowledge of a doctor
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 11

Greater scarcity of a natural resource is indicated

Accepted Answer

A)   by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation.
B)   only by an increase in the price of the resource that is less than the rate of inflation.
C)   only by an increase in the price of the resource that is greater than the rate of inflation.
D)   only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.E) None of the above
F) A) and D)

Question 12

The level of real GDP person

Accepted Answer

A)   differs widely across countries, but the growth rate of real GDP per person is similar across countries.
B)   is very similar across countries, but the growth rate of real GDP per person differs widely across countries.
C)   and the growth rate of real GDP per person are similar across countries.
D)   and the growth rate of real GDP per person vary widely across countries.E) A) and B)
F) C) and D)

Question 13

Other things the same, which of the following could explain an increase in productivity?

Accepted Answer

A)   either an increase in human capital or an increase in physical capital
B)   an increase in human capital but not an increase in physical capital
C)   an increase in physical capital but not an increase in human capital
D)   neither an increase in human capital nor an increase in physical capitalE) B) and C)
F) A) and D)

Question 14

Proprietary technology is technology that is

Accepted Answer

A)   widely used because it is easy to learn.
B)   widely used because the government subsidizes its use.
C)   not widely used because people could, but have not, taken the time to learn how to apply it.
D)   not widely used because it is known or controlled only by the company that discovered it.E) A) and B)
F) A) and C)

Question 15

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Question 16

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Accepted Answer

A)   have no impact on the growth rate of real GDP per person.
B)   decrease the growth of real GDP per person for a few years.
C)   increase the growth of real GDP per person for several decades.
D)   permanently increase the growth rate of real GDP per person.E) All of the above
F) A) and B)

Question 17

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 C)
F) B) and C)

Question 18

Over the period 1960-1990,

Accepted Answer

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

Question 19

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years?

Accepted Answer

A)   If, in a relatively poor country, real income per person had grown by 3.5 percent per year for the last 100 years, it would be a relatively rich country today.
B)   Rich countries became richer and poor countries became poorer.
C)   In the United States, real income per person today is about four times as high as it was 120 years ago.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 20

The key determinant of the standard of living in a country is

Accepted Answer

A)   the amount of goods and services produced from each hour of a worker's time.
B)   the total amount of goods and services produced within the country.
C)   the total amount of its physical capital.
D)   its growth rate of real GDP.E) C) and D)
F) A) and D)

Exam 12: Production and Growth

The level of real GDP person

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Which of the following is an example of physical capital?

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Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

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

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Historically, the market prices of most natural resources adjusted for inflation) have

Correct AnswerverifiedShow Answer

Technological knowledge

Correct AnswerverifiedShow Answer

Over the period 1960-1990,

Correct AnswerverifiedShow Answer

Other things the same, which of the following could explain an increase in productivity?

Correct AnswerverifiedShow Answer

Which of the following is an example of human capital?

Correct AnswerverifiedShow Answer

Other things the same, an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Correct AnswerverifiedShow Answer

When a society decides to increase its quantity of physical capital, the society

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.

Correct AnswerverifiedShow Answer

If there are diminishing returns to capital, then

Correct AnswerverifiedShow Answer

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society

Correct AnswerverifiedShow Answer

Greater scarcity of a natural resource is indicated

Correct AnswerverifiedShow Answer

The key determinant of the standard of living in a country is

Correct AnswerverifiedShow Answer

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years?

Correct AnswerverifiedShow Answer

Proprietary technology is technology that is

Correct AnswerverifiedShow Answer

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