Question 1

Which of the following would, by itself, reveal the most about a country's standard of living?

Accepted Answer

A) its level of capital 
B) the number of hours worked 
C) its availability of natural resources 
D) its productivity 
A) its level of capital 
B) the number of hours worked 
C) its availability of natural resources 
D) its productivity

Question 2

Since 1870 Canadian and U.S real GDP per person grew from below to above that in the United Kingdom. The explanation for this is likely that productivity grew faster in Canada and the U.S. than in the United Kingdom.

Accepted Answer

A) True 
 B)False

Question 3

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 5 
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 5

Question 4

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 5

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

Most economists believe that poor nation

Question 6

Which of the following is consistent with the catch-up effect?

Accepted Answer

A) The United States had a higher growth rate before 1900 than after. 
B) After World War II the United States had lower growth rates than war-ravaged European countries. 
C) Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. 
D) All of the above are correct. 
A) The United States had a higher growth rate before 1900 than after. 
B) After World War II the United States had lower growth rates than war-ravaged European countries. 
C) Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. 
D) All of the above are correct.

Question 7

Randomized control trials can help economists evaluate the impact of global aid programs in the same way that doctors test drugs.

Accepted Answer

A) True 
 B)False

Question 8

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Accepted Answer

A) Popeye's production and productivity are greater than Wimpy's. 
B) Popeye's production is greater than Wimpy's, but his productivity is less. 
C) Wimpy's production and productivity are greater than Popeye's. 
D) Wimpy's production is greater than Popeye's, but his productivity is less. 
A) Popeye's production and productivity are greater than Wimpy's. 
B) Popeye's production is greater than Wimpy's, but his productivity is less. 
C) Wimpy's production and productivity are greater than Popeye's. 
D) Wimpy's production is greater than Popeye's, but his productivity is less.

Question 9

Which of the following is correct?

Accepted Answer

A) Countries with the highest growth rates over the last 120 years are the ones that had the highest level of real GDP 120 years ago. 
B) Most countries have had little fluctuation around their average growth rates during the past 120 years. 
C) The ranking of countries by income changes little over time. 
D) Even though Japan had a higher growth rate of real GDP per person than the U.S. over the last 120 years, it's level of real GDP per person is less than that of the U.S. 
A) Countries with the highest growth rates over the last 120 years are the ones that had the highest level of real GDP 120 years ago. 
B) Most countries have had little fluctuation around their average growth rates during the past 120 years. 
C) The ranking of countries by income changes little over time. 
D) Even though Japan had a higher growth rate of real GDP per person than the U.S. over the last 120 years, it's level of real GDP per person is less than that of the U.S.

Question 10

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

Accepted Answer

A) 40, 40, 40 
B) 40, 35, 38 
C) 40, 34, 32 
D) 40, 43, 48 
A) 40, 40, 40 
B) 40, 35, 38 
C) 40, 34, 32 
D) 40, 43, 48

Question 11

In recent decades, economic growth has been much more rapid in South Korea than in the United States. What is the likely explanation for this fact?

Accepted Answer

The likely explanati

Question 12

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Accepted Answer

A) physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. 
B) physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer. 
C) technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. 
D) technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer. 
A) physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. 
B) physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer. 
C) technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce. 
D) technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.

Question 13

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

Accepted Answer

A) -5.3 percent 
B) -5 percent 
C) 5 percent 
D) 5.3 percent 
A) -5.3 percent 
B) -5 percent 
C) 5 percent 
D) 5.3 percent

Question 14

If a production function has constant returns to scale, then if all inputs double so does production.

Accepted Answer

A) True 
 B)False

Question 15

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. 
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.

Question 16

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Accepted Answer

A) public good. 
B) societal good. 
C) private good. 
D) normal good. 
A) public good. 
B) societal good. 
C) private good. 
D) normal good.

Question 17

The United Kingdom is

Accepted Answer

A) an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. 
B) an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. 
C) a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. 
D) a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States. 
A) an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. 
B) an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. 
C) a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. 
D) a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.

Question 18

Consider three imaginary countries. In Aire, saving amounts to $4,000 and consumption amounts to $12,000; in Bovina, saving amounts to $3,000 and consumption amounts to $24,000; and in Cartar, saving amounts to $10,000 and consumption amounts to $50,000. The saving rate is

Accepted Answer

A) higher in Aire than in Cartar, and it is higher in Cartar than in Bovina. 
B) higher in Cartar than in Aire, and it is higher in Aire than in Bovina. 
C) higher in Cartar than in Bovina, and it is the same in Bovina and Aire. 
D) higher in Aire than in Bovina, and it is the same in Aire and Cartar. 
A) higher in Aire than in Cartar, and it is higher in Cartar than in Bovina. 
B) higher in Cartar than in Aire, and it is higher in Aire than in Bovina. 
C) higher in Cartar than in Bovina, and it is the same in Bovina and Aire. 
D) higher in Aire than in Bovina, and it is the same in Aire and Cartar.

Question 19

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

Accepted Answer

A) the increase in output was greater for this year than last year. 
B) the increase in output was greater last year than this year. 
C) the increase in output is the same in both years. 
D) None of the above is necessarily correct. 
A) the increase in output was greater for this year than last year. 
B) the increase in output was greater last year than this year. 
C) the increase in output is the same in both years. 
D) None of the above is necessarily correct.

Question 20

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Accepted Answer

A) True 
 B)False

Exam 25: Production and Growth

Which of the following would, by itself, reveal the most about a country's standard of living?

Since 1870 Canadian and U.S real GDP per person grew from below to above that in the United Kingdom. The explanation for this is likely that productivity grew faster in Canada and the U.S. than in the United Kingdom.

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?

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

How do outward-oriented policies affect a nation's productivity?

Which of the following is consistent with the catch-up effect?

Randomized control trials can help economists evaluate the impact of global aid programs in the same way that doctors test drugs.

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Which of the following is correct?

According to the traditional view of the production function, which of the following values of the additions to output per worker would be consistent with moving from 5 to 6, and then from 6 to 7, and then from 7 to 8 units of capital per worker in that order?

In recent decades, economic growth has been much more rapid in South Korea than in the United States. What is the likely explanation for this fact?

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of 16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About what was the growth rate of real GDP per person between last year and this year?

If a production function has constant returns to scale, then if all inputs double so does production.

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

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

The United Kingdom is

Consider three imaginary countries. In Aire, saving amounts to $4,000 and consumption amounts to $12,000; in Bovina, saving amounts to $3,000 and consumption amounts to $24,000; and in Cartar, saving amounts to $10,000 and consumption amounts to $50,000. The saving rate is

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nation S Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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