Exam 25: Production and Growth

Country Y has a population of 1,600, of whom 400 work 6 hours a day to make 119,000 final goods. Country Z has a population of 2,500, of whom 2,000 work 4 hours a day to make 654,500 final goods.

In the United States in 2014 real GDP per person was about $56,000, while in some poor countries real GDP per person was less than $5,000.

One variable responsible for most significant explanation of variations in living standards around the world is

Investment in human capital has opportunity costs, but investment in physical capital does not.

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

In what sense is it likely that geography has an effect on a country's rate of economic growth?

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Last year real GDP per person in the imaginary nation of Davisland was $4,310. The year before it was $4,200. By about what percentage did real GDP per person grow during the period?

Last year real GDP in the imaginary nation of Nylon was 435.0 billion and the population was 2.6 million. The year before, real GDP was 380.0 billion and the population was 2.3 million. What was the growth rate of real GDP per person during the year?

​Income rises after a charity gives poor families free livestock. The harvest that year was also particularly bountiful. The charity should take full credit for the observed increase in the standard of living.

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

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

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

The traditional view of the production process is that capital is subject to

List the four determinants of an economy's productivity.

Although growth rates across countries vary some, rankings of countries by income remain pretty much the same over time.

Is physical capital a produced factor of production? Is human capital a produced factor of production?

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

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