Question 1

An understanding of the best ways to produce goods and services is called

Accepted Answer

A) human capital. 
B) physical capital. 
C) technology. 
D) productivity. 
A) human capital. 
B) physical capital. 
C) technology. 
D) productivity.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Productivity

Accepted Answer

A) is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. 
B) explains very little of the differences in the standard of living across countries. 
C) explains some, but not most of the differences in the standard of living across countries. 
D) explains most of the differences in the standard of living across countries. 
A) is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. 
B) explains very little of the differences in the standard of living across countries. 
C) explains some, but not most of the differences in the standard of living across countries. 
D) explains most of the differences in the standard of living across countries.

Question 4

In the equation for the production function H/L represents

Accepted Answer

A) natural resources per worker. 
B) human capital per worker. 
C) output per worker. 
D) physical capital per worker. 
A) natural resources per worker. 
B) human capital per worker. 
C) output per worker. 
D) physical capital per worker.

Question 5

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

Accepted Answer

A) constant returns. 
B) increasing returns. 
C) diminishing returns. 
D) diminishing returns for low levels of capital, and increasing returns for high levels of capital. 
A) constant returns. 
B) increasing returns. 
C) diminishing returns. 
D) diminishing returns for low levels of capital, and increasing returns for high levels of capital.

Question 6

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably

Accepted Answer

A) raise real GDP per person and productivity in Eurnesia. 
B) raise real GDP per person but not productivity in Eurnesia. 
C) raise productivity but not real GDP per person in Eurnesia. 
D) raise neither productivity nor real GDP per person in Eurnesia. 
A) raise real GDP per person and productivity in Eurnesia. 
B) raise real GDP per person but not productivity in Eurnesia. 
C) raise productivity but not real GDP per person in Eurnesia. 
D) raise neither productivity nor real GDP per person in Eurnesia.

Question 7

Technological knowledge

Accepted Answer

A) is the same thing as human capital. 
B) can be discovered but it can never be kept secret. 
C) is a determinant of productivity. 
D) does not play a role in the relationship that economists call the production function. 
A) is the same thing as human capital. 
B) can be discovered but it can never be kept secret. 
C) is a determinant of productivity. 
D) does not play a role in the relationship that economists call the production function.

Question 8

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Accepted Answer

A) standard of learning. 
B) technological knowledge. 
C) physical capital. 
D) human capital. 
A) standard of learning. 
B) technological knowledge. 
C) physical capital. 
D) human capital.

Question 9

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

Accepted Answer

A) lend support to the invisible hand by maintaining property rights and political stability. 
B) lower barriers and impediments to free trade. 
C) encourage capital formation. 
D) target and subsidize specific industries important for technological progress. 
A) lend support to the invisible hand by maintaining property rights and political stability. 
B) lower barriers and impediments to free trade. 
C) encourage capital formation. 
D) target and subsidize specific industries important for technological progress.

Question 10

In 2009, the imaginary nation of Florastan had a population of 8,044 and real GDP of 36,198,000. In 2010 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Florastan between 2009 and 2010?

Accepted Answer

A) -2.2 percent 
B) -0.7 percent 
C) 2.2 percent 
D) 4.5 percent 
A) -2.2 percent 
B) -0.7 percent 
C) 2.2 percent 
D) 4.5 percent

Question 11

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 12

Average income has been stagnant for many years in

Accepted Answer

A) Argentina. 
B) India. 
C) Senegal. 
D) All of the above are correct. 
A) Argentina. 
B) India. 
C) Senegal. 
D) All of the above are correct.

Question 13

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Accepted Answer

A) True 
 B)False

Question 14

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

Accepted Answer

A) diminishing returns to capital so the poor country grows slower. 
B) increasing returns to capital so the poor country grows slower. 
C) diminishing returns to capital so the poor country grows faster. 
D) increasing returns to capital so the poor country grows faster. 
A) diminishing returns to capital so the poor country grows slower. 
B) increasing returns to capital so the poor country grows slower. 
C) diminishing returns to capital so the poor country grows faster. 
D) increasing returns to capital so the poor country grows faster.

Question 15

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Accepted Answer

A) private goods rather than public goods. This gives people more incentive to engage in research. 
B) private goods rather than public goods. This gives people less incentive to engage in research. 
C) public goods rather than private goods. This gives people more incentive to engage in research. 
D) public goods rather than private goods. This gives people more incentive to engage in private research. 
A) private goods rather than public goods. This gives people more incentive to engage in research. 
B) private goods rather than public goods. This gives people less incentive to engage in research. 
C) public goods rather than private goods. This gives people more incentive to engage in research. 
D) public goods rather than private goods. This gives people more incentive to engage in private research.

Question 16

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Accepted Answer

A) as the economy moves toward the long run and in the long run. 
B) as the economy moves toward the long run, but not in the long run. 
C) in the long run, but not as the economy moves toward the long run. 
D) neither as the economy moves toward the long run, nor in the long run. 
A) as the economy moves toward the long run and in the long run. 
B) as the economy moves toward the long run, but not in the long run. 
C) in the long run, but not as the economy moves toward the long run. 
D) neither as the economy moves toward the long run, nor in the long run.

Question 17

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Accepted Answer

A) The total number of hours worked rose. 
B) The total number of hours worked stayed the same. 
C) The total number of hours worked fell. 
D) Both b and c are correct. 
A) The total number of hours worked rose. 
B) The total number of hours worked stayed the same. 
C) The total number of hours worked fell. 
D) Both b and c are correct.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Scenario 12-1. An economy's production form takes the form Y = AF(L, K, H, N).
-Refer to Scenario 12-1. If the production function has the constant-returns-to-scale property, then it is possible that the specific form of the production function is

Accepted Answer

A) Y = 4L + 2K + 3H + N 
B) Y = (L + K + H + N)/4 
C) 
$Y = 2 ( L K H N ) ^ { 1 / 4 }$ 
D) 
$$Y = 4 \sqrt { L ^ { 3 } K ^ { 4 } H N }$$ 
A) Y = 4L + 2K + 3H + N 
B) Y = (L + K + H + N)/4 
C) 
$Y = 2 ( L K H N ) ^ { 1 / 4 }$ 
D) 
$$Y = 4 \sqrt { L ^ { 3 } K ^ { 4 } H N }$$

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: Production and Growth

An understanding of the best ways to produce goods and services is called

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

Productivity

In the equation for the production function H/L represents

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

Technological knowledge

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Economists differ in their views of the role of the government in promoting economic growth. A controversial idea is that government should

In 2009, the imaginary nation of Florastan had a population of 8,044 and real GDP of 36,198,000. In 2010 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Florastan between 2009 and 2010?

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

Average income has been stagnant for many years in

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

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

Scenario 12-1. An economy's production form takes the form Y = AF(L, K, H, N). -Refer to Scenario 12-1. If the production function has the constant-returns-to-scale property, then it is possible that the specific form of the production function is

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

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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