Exam 7: Production and Growth

According to the traditional view, in what direction is the slope of the production function, with capital per worker on the horizontal axis and output per worker on the vertical axis?

In how many years will real GDP per person in Canada double, given its average growth rate during the past century?

In Canada, approximately how much higher is GDP per person today than it was a century ago?

Which of the following would increase productivity, everything else being the same?

If one wants to know how the material well-being of the average person has changed over time in a given country, which of the following should one look at?

The following table shows real GDP per person in a few countries over a period of about one century. a.Does this data support the catch-up theory of economic growth? Explain your answer. b.What additional information would be necessary when testing the catch-up theory?

Which of the following is one of the consequences of accumulating capital?

If the productivity slowdown had not occurred in 1973, the income of the average Canadian today would be about 70 percent higher.

Cedar Valley Furniture uses 5 workers working 8 hours to produce 80 rocking chairs. What is the productivity of these workers?

Other things the same, countries with low income are likely to increase their income more by adding another unit of capital than are countries that have high income.

How does income in developing countries like Pakistan and Bangladesh compare with that in Japan and Canada?

Which of the following best explains how investment and growth rates related across countries?

What would an economist call the saws, lathes, and drill presses that woodworkers at Cedar Valley Furniture use to produce chests and cabinets?

In medieval Europe an important technological advance was the use of the padded horse collar for ploughing. Once this idea was thought of, other people used it. What does this example illustrate about knowledge?

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 than the other. Suppose that the saving rate in both countries increases from 5 percent to 6 percent. Which of the following would we expect over the next ten years?

Suppose Mexico increases its saving rate. Which of the following will happen in the long run?

What do economists call the inputs used to produce goods and services?

In Canada real GDP per person is about $42 000, while in poor countries real GDP per person may be less than $5000.

Which of the following would be considered physical capital?

Which of the following would NOT be considered physical capital?