Exam 25: Production and Growth

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

"Market prices give no reason to believe that natural resources are a limit to economic growth." Explain this statement.

Without controlling for differences in natural resources and technological knowledge, diminishing returns can explain the entire difference in economic growth rates for China and the United States.

Other things the same, domestic investment will increase a country's real GDP by more than foreign investment.

Because of its vast oil reserves, Saudi Arabia is a rich country. Saudi Arabia exemplifies the general fact that differences in __________ are responsible for some of the differences in standards of living around the world.

Explain the distinction between technological knowledge and human capital.

Economists generally agree on the role the government should play in promoting productivity and economic growth.

Which of the following demonstrates human capital and physical capital in that order?

If your firm's production function has constant returns to scale, then if you double all your inputs, your firm's output will

What particularly important role do courts play in a market economy?

Other things the same, a country that increases its savings rate will have

Is coal a produced factor of production?

Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?

An important prerequisite for the price system to work is an economy-wide respect for _______ rights.

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

If a country made it easier for people to establish and prove the ownership of their property, real GDP per person would likely rise.

What are the long-run effects on productivity and income of an increase in the saving rate?

Which of the following statements is correct?

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