Question 1

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 2

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity

Question 3

Using the production function and notation in the text, what does K/L measure?

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 4

Why do birth rates tend to be lower in developed countries than in developing countries?

Accepted Answer

A) because people are older in developed countries 
B) because education is more expensive in developed countries 
C) because women in developed countries have greater access to jobs and it becomes too costly to spend time with children 
D) because government policies in developing countries reward families with children 
A) because people are older in developed countries 
B) because education is more expensive in developed countries 
C) because women in developed countries have greater access to jobs and it becomes too costly to spend time with children 
D) because government policies in developing countries reward families with children

Question 5

Which of the following is consistent with the catch-up effect?

Accepted Answer

A) The United States had a lower growth rate before 1900 than after. 
B) Japan has a higher growth rate than Germany. 
C) Although Canada has a relatively high level of output per person, its growth rate is still high compared to some poorer countries, such as Pakistan. 
D) After World War II, Canada had lower growth rates than war-ravaged European countries. 
A) The United States had a lower growth rate before 1900 than after. 
B) Japan has a higher growth rate than Germany. 
C) Although Canada has a relatively high level of output per person, its growth rate is still high compared to some poorer countries, such as Pakistan. 
D) After World War II, Canada had lower growth rates than war-ravaged European countries.

Question 6

Senator Noitall says that in order to help poor countries develop, Canada should (1) prevent Canadian corporations from investing in poor countries because they take profits that the poor countries should have; (2) not import goods from poor countries that use child labour; (3) work to promote political stability in poor countries; and (4) reduce poor countries' reliance on market forces in their economies. Which of these ideas is likely to help poor countries grow?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 7

Suppose Canadian-based Nortel builds and operates a new factory in Mexico. What would the future production from such an investment do?

Accepted Answer

A) increase Mexico's GDP more than it would increase Mexico's GNP 
B) increase Mexico's GNP more than it would increase Mexico's GDP 
C) not affect Mexico's GNP, but it would increase Mexico's GDP 
D) have no effect on either Mexico's GDP or its GNP 
A) increase Mexico's GDP more than it would increase Mexico's GNP 
B) increase Mexico's GNP more than it would increase Mexico's GDP 
C) not affect Mexico's GNP, but it would increase Mexico's GDP 
D) have no effect on either Mexico's GDP or its GNP

Question 8

How does the political environment affect economic growth?

Accepted Answer

A) Political instability can reduce foreign investment, thus reducing growth. 
B) Economic growth only depends on markets and production, while politics has no impact. 
C) Policies designed to prevent imports from other countries generally increase economic growth. 
D) Policies designed to restrict the immigration of foreign workers generally promote growth because wages earned by foreigners are not part of GNP. 
A) Political instability can reduce foreign investment, thus reducing growth. 
B) Economic growth only depends on markets and production, while politics has no impact. 
C) Policies designed to prevent imports from other countries generally increase economic growth. 
D) Policies designed to restrict the immigration of foreign workers generally promote growth because wages earned by foreigners are not part of GNP.

Question 9

Which of the following is an important fact about population growth?

Accepted Answer

A) There are no substantial differences between rates of growth in population among countries. 
B) In developed countries, population tends to grow slower than in developing countries. 
C) Higher rate of growth in population implies higher productivity. 
D) Economists generally believe that a country that increases its population growth rate will increase its economic growth rate. 
A) There are no substantial differences between rates of growth in population among countries. 
B) In developed countries, population tends to grow slower than in developing countries. 
C) Higher rate of growth in population implies higher productivity. 
D) Economists generally believe that a country that increases its population growth rate will increase its economic growth rate.

Question 10

In a market economy, what does the real, or inflation-adjusted, price of a resource measure?

Accepted Answer

A) contribution to revenue 
B) relative scarcity 
C) relative importance 
D) contribution to efficiency 
A) contribution to revenue 
B) relative scarcity 
C) relative importance 
D) contribution to efficiency

Question 11

Changes in the prices of most natural resources compared to other goods indicate that natural resources are generally becoming scarcer.

Accepted Answer

A) True 
 B)False

Question 12

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation?

Accepted Answer

A) People need to work longer hours, thus having less time for leisure. 
B) People need to consume less goods and services now in order to enjoy more consumption in the future. 
C) People need to recycle resources so that future generations can produce goods and services with the accumulated capital. 
D) People need to devote less time in school and more at work. 
A) People need to work longer hours, thus having less time for leisure. 
B) People need to consume less goods and services now in order to enjoy more consumption in the future. 
C) People need to recycle resources so that future generations can produce goods and services with the accumulated capital. 
D) People need to devote less time in school and more at work.

Question 13

In ten years when you are the owner of a major Canadian corporation, if your corporation opens and operates a branch in a foreign country you will be engaging in foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 14

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity. Which of the following best explains this hypothesis?

Accepted Answer

A) More people can produce more ideas, which contribute to increasing productivity. 
B) More people are able to produce more output, everything else being the same. 
C) A larger population implies more demand for goods and services, which stimulates the economy. 
D) When there is a large number of children, governments need to invest more in education, which fosters economic growth. 
A) More people can produce more ideas, which contribute to increasing productivity. 
B) More people are able to produce more output, everything else being the same. 
C) A larger population implies more demand for goods and services, which stimulates the economy. 
D) When there is a large number of children, governments need to invest more in education, which fosters economic growth.

Question 15

From 1960 to 1990, what happened to the growth rates of Canada and South Korea?

Accepted Answer

A) South Korea had a higher growth rate than Canada because it had a higher ratio of investment to GDP. 
B) Canada 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 Canada, even though it had a similar ratio of investment to GDP. 
D) Canada had a higher growth rate than South Korea, even though it had a similar ratio of investment to GDP. 
A) South Korea had a higher growth rate than Canada because it had a higher ratio of investment to GDP. 
B) Canada 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 Canada, even though it had a similar ratio of investment to GDP. 
D) Canada had a higher growth rate than South Korea, even though it had a similar ratio of investment to GDP.

Question 16

Drug companies can usually obtain patents on new drugs. Patents turn new ideas into which of the following goods?

Accepted Answer

A) private goods, which increase the incentive to engage in research 
B) private goods, which decrease the incentive to engage in research 
C) public goods, which increase the incentive to engage in research 
D) public goods, which decrease the incentive to engage in research 
A) private goods, which increase the incentive to engage in research 
B) private goods, which decrease the incentive to engage in research 
C) public goods, which increase the incentive to engage in research 
D) public goods, which decrease the incentive to engage in research

Question 17

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the past 40 years. However, South Korea had a 6 percent growth rate of average annual income, while Canada had only a 2 percent growth rate over that past 40 years. How can this be explained?

Accepted Answer

The solution to the puzzle is based on t

Question 18

In a market economy, what is scarcity of resources most clearly reflected in?

Accepted Answer

A) supply 
B) demand 
C) market prices 
D) the stock of the resource 
A) supply 
B) demand 
C) market prices 
D) the stock of the resource

Question 19

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. Which of the following can we conclude?

Accepted Answer

A) Laurie's productivity and output are greater that Iris's. 
B) Laurie's productivity is greater than Iris's, but Laurie's output is less. 
C) Iris's productivity and output are greater than Laurie's. 
D) Iris's productivity is greater that Laurie's, but Iris's output is less. 
A) Laurie's productivity and output are greater that Iris's. 
B) Laurie's productivity is greater than Iris's, but Laurie's output is less. 
C) Iris's productivity and output are greater than Laurie's. 
D) Iris's productivity is greater that Laurie's, but Iris's output is less.

Question 20

Suppose that over the past ten years productivity grew faster in Oceania than in Freedonia and the population of both countries was unchanged. Which of the following can we conclude?

Accepted Answer

A) that real GDP per person must be higher in Oceania than in Freedonia 
B) that real GDP per person grew faster in Oceania than in Freedonia 
C) that the standard of living must be higher in Oceania than in Freedonia 
D) that Oceania must have had a greater capital stock than Freedonia 
A) that real GDP per person must be higher in Oceania than in Freedonia 
B) that real GDP per person grew faster in Oceania than in Freedonia 
C) that the standard of living must be higher in Oceania than in Freedonia 
D) that Oceania must have had a greater capital stock than Freedonia

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

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Using the production function and notation in the text, what does K/L measure?

Why do birth rates tend to be lower in developed countries than in developing countries?

Which of the following is consistent with the catch-up effect?

Suppose Canadian-based Nortel builds and operates a new factory in Mexico. What would the future production from such an investment do?

How does the political environment affect economic growth?

Which of the following is an important fact about population growth?

In a market economy, what does the real, or inflation-adjusted, price of a resource measure?

Changes in the prices of most natural resources compared to other goods indicate that natural resources are generally becoming scarcer.

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation?

In ten years when you are the owner of a major Canadian corporation, if your corporation opens and operates a branch in a foreign country you will be engaging in foreign direct investment.

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity. Which of the following best explains this hypothesis?

From 1960 to 1990, what happened to the growth rates of Canada and South Korea?

Drug companies can usually obtain patents on new drugs. Patents turn new ideas into which of the following goods?

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the past 40 years. However, South Korea had a 6 percent growth rate of average annual income, while Canada had only a 2 percent growth rate over that past 40 years. How can this be explained?

In a market economy, what is scarcity of resources most clearly reflected in?

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. Which of the following can we conclude?

Suppose that over the past ten years productivity grew faster in Oceania than in Freedonia and the population of both countries was unchanged. Which of the following can we conclude?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

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

Five Debates Over Macroeconomic Policy

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Exam 7: Production and Growth

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

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Using the production function and notation in the text, what does K/L measure?

Why do birth rates tend to be lower in developed countries than in developing countries?

Which of the following is consistent with the catch-up effect?

Suppose Canadian-based Nortel builds and operates a new factory in Mexico. What would the future production from such an investment do?

How does the political environment affect economic growth?

Which of the following is an important fact about population growth?

In a market economy, what does the real, or inflation-adjusted, price of a resource measure?

Changes in the prices of most natural resources compared to other goods indicate that natural resources are generally becoming scarcer.

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation?

In ten years when you are the owner of a major Canadian corporation, if your corporation opens and operates a branch in a foreign country you will be engaging in foreign direct investment.

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity. Which of the following best explains this hypothesis?

From 1960 to 1990, what happened to the growth rates of Canada and South Korea?

Drug companies can usually obtain patents on new drugs. Patents turn new ideas into which of the following goods?

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the past 40 years. However, South Korea had a 6 percent growth rate of average annual income, while Canada had only a 2 percent growth rate over that past 40 years. How can this be explained?

In a market economy, what is scarcity of resources most clearly reflected in?

Laurie works 8 hours and produces 7 units of goods per hour. Iris works 6 hours and produces 10 units of goods per hour. Which of the following can we conclude?

Suppose that over the past ten years productivity grew faster in Oceania than in Freedonia and the population of both countries was unchanged. Which of the following can we conclude?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

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

Five Debates Over Macroeconomic Policy

Filters