Question 1

In 2008, the typical Bangladeshi had about

Accepted Answer

A) 1/5 the real income of a typical American a century ago. 
B) 1/3 the real income of a typical American a century ago. 
C) 2 times as much real income as that of a typical American a century ago. 
D) 4 times as much real income as that of a typical American a century ago. 
A) 1/5 the real income of a typical American a century ago. 
B) 1/3 the real income of a typical American a century ago. 
C) 2 times as much real income as that of a typical American a century ago. 
D) 4 times as much real income as that of a typical American a century ago.

Question 2

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Accepted Answer

A) the production process cannot be enhanced by technological advances. 
B) no mathematical representation of the relevant production function can be formulated. 
C) the relevant production function has the limits-to-growth property. 
D) the relevant production function has the constant-returns-to-scale property. 
A) the production process cannot be enhanced by technological advances. 
B) no mathematical representation of the relevant production function can be formulated. 
C) the relevant production function has the limits-to-growth property. 
D) the relevant production function has the constant-returns-to-scale property.

Question 3

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

Question 4

According to studies using international data, an increase in the saving rate

Accepted Answer

A) does not increase the growth rate of output. 
B) increases the growth rate of output for a few years. 
C) increases the growth rate of output for about a decade. 
D) increases the growth rate of output for several decades. 
A) does not increase the growth rate of output. 
B) increases the growth rate of output for a few years. 
C) increases the growth rate of output for about a decade. 
D) increases the growth rate of output for several decades.

Question 5

An organization that tries to encourage the flow of investment to poor countries is the

Accepted Answer

A) World Bank. 
B) Organization of Less Developed Countries. 
C) Alliance of Developing Countries. 
D) International Development Alliance. 
A) World Bank. 
B) Organization of Less Developed Countries. 
C) Alliance of Developing Countries. 
D) International Development Alliance.

Question 6

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Accepted Answer

In addition to investment in physical an

Question 7

Which of the following is an example of a renewable natural resource?

Accepted Answer

A) the knowledge possessed by scientists 
B) carpenters' labor services 
C) lumber 
D) All of the above are correct. 
A) the knowledge possessed by scientists 
B) carpenters' labor services 
C) lumber 
D) All of the above are correct.

Question 8

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A) both the demand for the resource and the supply of the resource have increased. 
B) both the demand for the resource and the supply of the resource have decreased. 
C) the demand for the resource has increased and the supply has decreased. 
D) the demand for the resource has decreased and the supply has increased. 
A) both the demand for the resource and the supply of the resource have increased. 
B) both the demand for the resource and the supply of the resource have decreased. 
C) the demand for the resource has increased and the supply has decreased. 
D) the demand for the resource has decreased and the supply has increased.

Question 12

An increase in the saving rate permanently increases the growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

An increase in capital will increase real GDP per person

Accepted Answer

A) more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
B) more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. 
C) less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
D) less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. 
A) more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
B) more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. 
C) less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. 
D) less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.

Question 15

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Accepted Answer

A) India 
B) Mexico 
C) Senegal 
D) Singapore 
A) India 
B) Mexico 
C) Senegal 
D) Singapore

Question 16

The average income in a rich country

Accepted Answer

A) is about 5 times that in a poor country. Further, people in rich countries have longer life expectancy. 
B) is about 5 times that in a poor country. However, people in rich countries have about the same life expectancy as those in poor countries. 
C) is more than ten times that in a poor country. Further, people in rich countries have longer life expectancy. 
D) is more than ten times that in poor country. However, people in rich countries have about the same life expectancy as those in poor countries. 
A) is about 5 times that in a poor country. Further, people in rich countries have longer life expectancy. 
B) is about 5 times that in a poor country. However, people in rich countries have about the same life expectancy as those in poor countries. 
C) is more than ten times that in a poor country. Further, people in rich countries have longer life expectancy. 
D) is more than ten times that in poor country. However, people in rich countries have about the same life expectancy as those in poor countries.

Question 17

Which of the following is an example of a nonrenewable natural resource?

Accepted Answer

A) tin 
B) petroleum 
C) gold 
D) All of the above are correct. 
A) tin 
B) petroleum 
C) gold 
D) All of the above are correct.

Question 18

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. 
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.

Question 19

International data on the history of real GDP growth rates shows that over the last 110 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 20

The catch-up effect says that countries with low income can grow faster than countries with higher income. However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

Accepted Answer

The argument that poor countries will te

Exam 12: Production and Growth

In 2008, the typical Bangladeshi had about

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

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

According to studies using international data, an increase in the saving rate

An organization that tries to encourage the flow of investment to poor countries is the

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Which of the following is an example of a renewable natural resource?

A forest is an example of a nonrenewable resource.

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

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.

In which of the following cases can we be certain that a natural resource has become scarcer?

An increase in the saving rate permanently increases the growth rate of real GDP per person.

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

An increase in capital will increase real GDP per person

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

The average income in a rich country

Which of the following is an example of a nonrenewable natural resource?

If there are diminishing returns to capital, then

International data on the history of real GDP growth rates shows that over the last 110 years or so, rich countries got richer and poor countries got poorer.

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

Application: The Costs of Taxation

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomic Models

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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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