Question 1

Which of the following are human capital and physical capital, respectively?

Accepted Answer

A) for an accounting firm: the accountants' knowledge of tax laws and computer software 
B) for a grocery store: grocery carts and shelving 
C) for a school: chalkboard and desks 
D) for a library: the building and the reference librarians' knowledge of the Internet 
A) for an accounting firm: the accountants' knowledge of tax laws and computer software 
B) for a grocery store: grocery carts and shelving 
C) for a school: chalkboard and desks 
D) for a library: the building and the reference librarians' knowledge of the Internet

Question 2

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

A) True 
 B)False

Question 3

The catch-up effect refers to the idea that

Accepted Answer

A) saving will always catch-up with investment spending. 
B) it is easier for a country to grow fast and so catch-up if it starts out relatively poor. 
C) population eventually catches-up with increased output. 
D) if investment spending is low, increased saving will help investment to "catch-up." 
A) saving will always catch-up with investment spending. 
B) it is easier for a country to grow fast and so catch-up if it starts out relatively poor. 
C) population eventually catches-up with increased output. 
D) if investment spending is low, increased saving will help investment to "catch-up."

Question 4

Over the last ten years productivity grew more slowly in Iberia than in Aire while the population and total hours worked remained the same in both countries. It follows that

Accepted Answer

A) real GDP per person must be lower in Iberia than in Aire. 
B) real GDP per person grew more slowly in Iberia than in Aire. 
C) the standard of living must be higher in Iberia than in Aire. 
D) All of the above are correct. 
A) real GDP per person must be lower in Iberia than in Aire. 
B) real GDP per person grew more slowly in Iberia than in Aire. 
C) the standard of living must be higher in Iberia than in Aire. 
D) All of the above are correct.

Question 5

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. 
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.

Question 6

A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in

Accepted Answer

A) one generation. In the last couple of decades China's growth rate has been higher than 12%. 
B) one generation. However, in the last couple of decades not even China's growth rate has been this high. 
C) three generations. In the last couple of decades China's growth rate has been higher than 12%. 
D) three generations. However, in the last couple of decades not even China's growth rate has been this high. 
A) one generation. In the last couple of decades China's growth rate has been higher than 12%. 
B) one generation. However, in the last couple of decades not even China's growth rate has been this high. 
C) three generations. In the last couple of decades China's growth rate has been higher than 12%. 
D) three generations. However, in the last couple of decades not even China's growth rate has been this high.

Question 7

Sandra uses her sewing machine, thread, and yards of denim to produce jean skirts. The sewing machine is an example of​

Accepted Answer

A) ​labor. 
B) physical ​capital. 
C) ​human capital. 
D) ​natural resources. 
A) ​labor. 
B) physical ​capital. 
C) ​human capital. 
D) ​natural resources.

Question 8

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 country 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. 
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.

Question 9

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Accepted Answer

A) lend support to the invisible hand by maintaining property rights and political stability. 
B) limit foreign investment to industries that don't already exist in the country. 
C) impose trade restrictions to protect the interests of domestic producers and consumers. 
D) subsidize key industries. 
A) lend support to the invisible hand by maintaining property rights and political stability. 
B) limit foreign investment to industries that don't already exist in the country. 
C) impose trade restrictions to protect the interests of domestic producers and consumers. 
D) subsidize key industries.

Question 10

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. 
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.

Question 11

​There are large differences in the standard of living

Accepted Answer

A) across countries, but not within countries. 
B) within countries ​over time, but not across countries. 
C) across countries and within countries over time. 
D) across countries, but not in technology or healthcare. 
A) across countries, but not within countries. 
B) within countries ​over time, but not across countries. 
C) across countries and within countries over time. 
D) across countries, but not in technology or healthcare.

Question 12

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Accepted Answer

A) productivity. 
B) population. 
C) preferences. 
D) prices. 
A) productivity. 
B) population. 
C) preferences. 
D) prices.

Question 13

Greg learns how to bake from his grandmother. This is an example of

Accepted Answer

A) ​human capital, but not technological knowledge. 
B) ​technological knowledge, but not human capital. 
C) ​both human capital and technological knowledge. 
D) ​neither human capital nor technological knowledge. 
A) ​human capital, but not technological knowledge. 
B) ​technological knowledge, but not human capital. 
C) ​both human capital and technological knowledge. 
D) ​neither human capital nor technological knowledge.

Question 14

Measured in 2014 dollars, real GDP per person in the United States in 2014 was about 10 times that in

Accepted Answer

A) China. 
B) India. 
C) Indonesia. 
D) Pakistan. 
A) China. 
B) India. 
C) Indonesia. 
D) Pakistan.

Question 15

Industrial machinery is an example of

Accepted Answer

A) a factor of production that in the past was an output from the production process. 
B) technological knowledge. 
C) a production function. 
D) an item which always has the property called constant returns to scale. 
A) a factor of production that in the past was an output from the production process. 
B) technological knowledge. 
C) a production function. 
D) an item which always has the property called constant returns to scale.

Question 16

An increase in a country's saving rate permanently raises its productivity.

Accepted Answer

A) True 
 B)False

Question 17

Which one of the factors of production originates as an output from the production process, and is subsequently used as an input into the production process?

Accepted Answer

The input

Question 18

If there are constant returns to scale, the production function can be written as

Accepted Answer

A) xY = 2xAF(L, K, H, N). 
B) Y/L = A F(xL, xK, xH, xN). 
C) Y/L = A F( 1, K/L, H/L, N/L). 
D) L = AF(Y, K, H, N). 
A) xY = 2xAF(L, K, H, N). 
B) Y/L = A F(xL, xK, xH, xN). 
C) Y/L = A F( 1, K/L, H/L, N/L). 
D) L = AF(Y, K, H, N).

Question 19

The catch-up effect refers to the idea that poor countries, despite their best efforts, are not likely ever to experience the economic growth rates of wealthier countries.

Accepted Answer

A) True 
 B)False

Question 20

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. 
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.

Exam 25: Production and Growth

Which of the following are human capital and physical capital, respectively?

Countries with high population growth rates tend to have lower levels of educational attainment.

The catch-up effect refers to the idea that

Over the last ten years productivity grew more slowly in Iberia than in Aire while the population and total hours worked remained the same in both countries. It follows that

Over the period 1960-1990,

A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in

Sandra uses her sewing machine, thread, and yards of denim to produce jean skirts. The sewing machine is an example of​

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 country to catch up?

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

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

​There are large differences in the standard of living

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Greg learns how to bake from his grandmother. This is an example of

Measured in 2014 dollars, real GDP per person in the United States in 2014 was about 10 times that in

Industrial machinery is an example of

An increase in a country's saving rate permanently raises its productivity.

Which one of the factors of production originates as an output from the production process, and is subsequently used as an input into the production process?

If there are constant returns to scale, the production function can be written as

The catch-up effect refers to the idea that poor countries, despite their best efforts, are not likely ever to experience the economic growth rates of wealthier countries.

Suppose Turkey increases its saving rate. In the long run

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

Filters

Sandra uses her sewing machine, thread, and yards of denim to produce jean skirts. The sewing machine is an example of

There are large differences in the standard of living