Question 1

Jessica Smith is a teacher. Which of the following is a part of her human capital?

Accepted Answer

A) her work experience 
B) the textbooks she uses 
C) the software she uses when delivering her lectures 
D) the amount of time she spends with her students 
A) her work experience 
B) the textbooks she uses 
C) the software she uses when delivering her lectures 
D) the amount of time she spends with her students

Question 2

The productivity slowdown appears to be primarily the result of a decrease in the capital to labour ratio.

Accepted Answer

A) True 
 B)False

Question 3

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean. Make a list of things that determine labour productivity.

Accepted Answer

The standard of living is a measure of h

Question 4

Which of the following best defines human capital?

Accepted Answer

A) the knowledge and skills that workers acquire through education, training, and experience 
B) the stock of equipment and structures that is used to produce goods and services 
C) the total number of hours worked in an economy 
D) the same thing as technological knowledge 
A) the knowledge and skills that workers acquire through education, training, and experience 
B) the stock of equipment and structures that is used to produce goods and services 
C) the total number of hours worked in an economy 
D) the same thing as technological knowledge

Question 5

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

Accepted Answer

A) Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
B) Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C) Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production. 
D) Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
A) Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
B) Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C) Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production. 
D) Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.

Question 6

If there are constant returns to scale, how is the production function written?

Accepted Answer

A) xY = 2xAF(L, K, H, N) 
B) Y/L = A F(xL, xK, xH, xN) 
C) Y/L = A F( 1, K/L, H/L, N/L) 
D) L = AF(Y, K, H, N) 
A) xY = 2xAF(L, K, H, N) 
B) Y/L = A F(xL, xK, xH, xN) 
C) Y/L = A F( 1, K/L, H/L, N/L) 
D) L = AF(Y, K, H, N)

Question 7

In 1870, what was the richest country in the world?

Accepted Answer

A) Canada 
B) the United States 
C) the United Kingdom 
D) Germany 
A) Canada 
B) the United States 
C) the United Kingdom 
D) Germany

Question 8

Why are property rights important for the growth of a nation's standard of living?

Accepted Answer

Property rights are an important prerequ

Question 9

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following best describes natural resources?

Accepted Answer

A) They are native abilities that workers might possess. 
B) They are production inputs such as land, rivers, and mineral deposits. 
C) They refer to knowledge that is freely available and is used in production. 
D) They are public schools and universities where workers are prepared for life, for which companies do not have to pay. 
A) They are native abilities that workers might possess. 
B) They are production inputs such as land, rivers, and mineral deposits. 
C) They refer to knowledge that is freely available and is used in production. 
D) They are public schools and universities where workers are prepared for life, for which companies do not have to pay.

Question 11

Other things equal, how do relatively poor countries tend to grow?

Accepted Answer

A) slower than relatively rich countries; this is called the poverty trap 
B) slower than relatively rich countries; this is called the Malthus effect 
C) faster than relatively rich countries; this is called the catch-up effect 
D) faster than relatively rich countries; this is called the constant-returns-to-scale effect 
A) slower than relatively rich countries; this is called the poverty trap 
B) slower than relatively rich countries; this is called the Malthus effect 
C) faster than relatively rich countries; this is called the catch-up effect 
D) faster than relatively rich countries; this is called the constant-returns-to-scale effect

Question 12

If a country's saving rate increases, which of the following happens in the long run?

Accepted Answer

A) Its productivity is higher, but real GDP per person is not higher. 
B) Its real GDP per person is higher, but productivity is not higher. 
C) Its productivity and real GDP per person are both higher. 
D) Neither its productivity nor real GDP per person are higher. 
A) Its productivity is higher, but real GDP per person is not higher. 
B) Its real GDP per person is higher, but productivity is not higher. 
C) Its productivity and real GDP per person are both higher. 
D) Neither its productivity nor real GDP per person are higher.

Question 13

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

Accepted Answer

A) Output would stay the same and so would its productivity. 
B) Output and productivity would increase, but by less than double. 
C) Output and productivity would increase by more than double. 
D) Output would increase by less than double, but productivity would double. 
A) Output would stay the same and so would its productivity. 
B) Output and productivity would increase, but by less than double. 
C) Output and productivity would increase by more than double. 
D) Output would increase by less than double, but productivity would double.

Question 14

According to economic historian Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labour?

Accepted Answer

A) 40 percent 
B) 30 percent 
C) 20 percent 
D) 15 percent 
A) 40 percent 
B) 30 percent 
C) 20 percent 
D) 15 percent

Question 15

Which of the following organizations tries to encourage the flow of investment to poor countries?

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 16

If your Canadian-based firm opens and operates a new watch factory in Panama, what type of investment is your firm engaging in?

Accepted Answer

A) foreign portfolio investment 
B) foreign financial investment 
C) foreign direct investment 
D) foreign capital investment 
A) foreign portfolio investment 
B) foreign financial investment 
C) foreign direct investment 
D) foreign capital investment

Question 17

Which of the following best defines technological knowledge?

Accepted Answer

A) It is the same as human capital. 
B) It is available information on how to produce things. 
C) It is the resources expended transmitting society's understanding to the labour force. 
D) It is knowledge about new, unexploited natural resources. 
A) It is the same as human capital. 
B) It is available information on how to produce things. 
C) It is the resources expended transmitting society's understanding to the labour force. 
D) It is knowledge about new, unexploited natural resources.

Question 18

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982. Which of the following is the most likely explanation?

Accepted Answer

A) a decrease in the growth of human capital per person 
B) capital wearing out so that capital per person fell 
C) changes in technological progress 
D) the continued depletion of natural resources 
A) a decrease in the growth of human capital per person 
B) capital wearing out so that capital per person fell 
C) changes in technological progress 
D) the continued depletion of natural resources

Question 19

Which of the following statements best describes the relationship between the initial wealth and the growth rate of a country?

Accepted Answer

A) Countries with the highest growth rates over the last 100 years are the ones that had the highest level of real GDP 100 years ago. 
B) Countries that were rich a century ago had little fluctuation around their average growth rates during the past 100 years. 
C) Though the catch-up effect may suggest otherwise, the data show no strong relationship between initial conditions and growth rates. 
D) Over the last 100 years, Japan had the highest real GDP growth rate, and now it has the highest real GDP per person. 
A) Countries with the highest growth rates over the last 100 years are the ones that had the highest level of real GDP 100 years ago. 
B) Countries that were rich a century ago had little fluctuation around their average growth rates during the past 100 years. 
C) Though the catch-up effect may suggest otherwise, the data show no strong relationship between initial conditions and growth rates. 
D) Over the last 100 years, Japan had the highest real GDP growth rate, and now it has the highest real GDP per person.

Question 20

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. Which of the following will happen in the long run?

Accepted Answer

A) Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B) Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C) Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D) Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital. 
A) Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B) Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C) Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D) Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.

Jessica Smith is a teacher. Which of the following is a part of her human capital?

The productivity slowdown appears to be primarily the result of a decrease in the capital to labour ratio.

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean. Make a list of things that determine labour productivity.

Which of the following best defines human capital?

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

If there are constant returns to scale, how is the production function written?

In 1870, what was the richest country in the world?

Why are property rights important for the growth of a nation's standard of living?

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Which of the following best describes natural resources?

Other things equal, how do relatively poor countries tend to grow?

If a country's saving rate increases, which of the following happens in the long run?

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

According to economic historian Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labour?

Which of the following organizations tries to encourage the flow of investment to poor countries?

If your Canadian-based firm opens and operates a new watch factory in Panama, what type of investment is your firm engaging in?

Which of the following best defines technological knowledge?

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982. Which of the following is the most likely explanation?

Which of the following statements best describes the relationship between the initial wealth and the growth rate of a country?

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. Which of the following will happen in the long run?

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

Jessica Smith is a teacher. Which of the following is a part of her human capital?

The productivity slowdown appears to be primarily the result of a decrease in the capital to labour ratio.

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean. Make a list of things that determine labour productivity.

Which of the following best defines human capital?

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

If there are constant returns to scale, how is the production function written?

In 1870, what was the richest country in the world?

Why are property rights important for the growth of a nation's standard of living?

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Which of the following best describes natural resources?

Other things equal, how do relatively poor countries tend to grow?

If a country's saving rate increases, which of the following happens in the long run?

Suppose that an economy with constant returns to scale doubled its physical capital stock, doubled its available natural resources, and doubled its human capital, but kept the size of the labour force the same. How does the change in output compare to the change in productivity?

According to economic historian Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labour?

Which of the following organizations tries to encourage the flow of investment to poor countries?

If your Canadian-based firm opens and operates a new watch factory in Panama, what type of investment is your firm engaging in?

Which of the following best defines technological knowledge?

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982. Which of the following is the most likely explanation?

Which of the following statements best describes the relationship between the initial wealth and the growth rate of a country?

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. Which of the following will happen in the long run?

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