Question 1

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A) education 
B) research and development 
C) nutrition 
D) trade restrictions 
A) education 
B) research and development 
C) nutrition 
D) trade restrictions

Question 2

How is a nation's standard of living determined?

Accepted Answer

A) by its productivity 
B) by its gross domestic product 
C) by its national income 
D) by how much it has relative to others 
A) by its productivity 
B) by its gross domestic product 
C) by its national income 
D) by how much it has relative to others

Question 3

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Accepted Answer

A) Some of the income from the factory accrues to people who live in Egypt. 
B) GDP is income earned by residents only, whereas GNP is income earned by residents and nonresidents. 
C) All of the income from the factory is included in Egypt's GDP, but not all is included in GNP. 
D) Foreign direct investment is part of GDP, but it is not part of GNP. 
A) Some of the income from the factory accrues to people who live in Egypt. 
B) GDP is income earned by residents only, whereas GNP is income earned by residents and nonresidents. 
C) All of the income from the factory is included in Egypt's GDP, but not all is included in GNP. 
D) Foreign direct investment is part of GDP, but it is not part of GNP.

Question 4

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

Accepted Answer

A) about 3.5 percent per year, which implies a doubling about every 20 years 
B) about 2 percent per year, which implies a doubling about every 35 years 
C) about 4 percent per year, which implies a doubling about every 17.5 years 
D) about 1 percent per year, which implies a doubling about every 70 years 
A) about 3.5 percent per year, which implies a doubling about every 20 years 
B) about 2 percent per year, which implies a doubling about every 35 years 
C) about 4 percent per year, which implies a doubling about every 17.5 years 
D) about 1 percent per year, which implies a doubling about every 70 years

Question 5

In which of the following types of investment do foreigners buy shares in domestic companies?

Accepted Answer

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

Question 6

From 1974 to 1982, what was the growth in Canadian productivity?

Accepted Answer

A) 2.5 percent 
B) 1.8 percent 
C) 1.3 percent 
D) 0.5 percent 
A) 2.5 percent 
B) 1.8 percent 
C) 1.3 percent 
D) 0.5 percent

Question 7

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Accepted Answer

A) increase Canadian GNP more than it would increase Canadian GDP 
B) increase Canadian GDP more than it would increase Canadian GNP 
C) not affect Canadian GNP, but it would increase Canadian GDP 
D) have no effect on Canadian GNP or GDP 
A) increase Canadian GNP more than it would increase Canadian GDP 
B) increase Canadian GDP more than it would increase Canadian GNP 
C) not affect Canadian GNP, but it would increase Canadian GDP 
D) have no effect on Canadian GNP or GDP

Question 8

What does diminishing returns to capital imply?

Accepted Answer

A) Capital produces fewer goods as it ages. 
B) New ideas are not as useful as old ideas. 
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) New ideas are not as useful as old ideas. 
C) Increases in the capital stock eventually decrease output. 
D) Increases in the capital stock increase output by ever smaller amounts.

Question 9

Which of the following is a characteristic of inward-oriented policies?

Accepted Answer

A) They are generally supported by economists. 
B) They are primarily concerned with the development of human capital. 
C) They are in some ways like prohibiting the use of certain technologies. 
D) They are generally rejected by domestic producers in import-competing industries. 
A) They are generally supported by economists. 
B) They are primarily concerned with the development of human capital. 
C) They are in some ways like prohibiting the use of certain technologies. 
D) They are generally rejected by domestic producers in import-competing industries.

Question 10

The real GDP per capita in an economy increases at a rate of 2.6 percent. Calculate the number of years that it takes for real GDP to double. Assuming that the current GDP per capita is $40 000 and the growth rate will be on average 2.6 percent, how much will GDP per capita be after 10 years? After 20 years? After30 years? Draw a graph to show approximately the evolution of this economy for the next 30 years.

Accepted Answer

Let us denote real GDP per capita by Y.

Question 11

Which of the following indicates greater scarcity of a natural resource?

Accepted Answer

A) simply an increase in its current dollar price 
B) an increase in its price that is greater than the rate of inflation, but only if the increase in price is created by a reduction in supply 
C) an increase in its price that is greater than the rate of inflation 
D) an increase in its price that is greater than the rate of inflation, but only if the stock of the resource has fallen 
A) simply an increase in its current dollar price 
B) an increase in its price that is greater than the rate of inflation, but only if the increase in price is created by a reduction in supply 
C) an increase in its price that is greater than the rate of inflation 
D) an increase in its price that is greater than the rate of inflation, but only if the stock of the resource has fallen

Question 12

Which of the following best explains productivity?

Accepted Answer

A) Productivity is equal to nominal GDP per person. 
B) Productivity is equal to real GDP per person. 
C) Productivity is the quantity of goods or services that a worker can produce in one hour. 
D) Productivity is the growth rate of real GDP per person. 
A) Productivity is equal to nominal GDP per person. 
B) Productivity is equal to real GDP per person. 
C) Productivity is the quantity of goods or services that a worker can produce in one hour. 
D) Productivity is the growth rate of real GDP per person.

Question 13

What is a valid policy to use for increasing the rate of economic growth?

Accepted Answer

A) reduce reliance on market forces because they allocate goods and services in an unfair manner 
B) encourage trade with neighbouring countries 
C) increase the fraction of GDP devoted to consumption 
D) restrict investment in domestic industries by foreigners because they take some of the profits out of the country 
A) reduce reliance on market forces because they allocate goods and services in an unfair manner 
B) encourage trade with neighbouring countries 
C) increase the fraction of GDP devoted to consumption 
D) restrict investment in domestic industries by foreigners because they take some of the profits out of the country

Question 14

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

Accepted Answer

A) 2 times higher 
B) 4 times higher 
C) 6 times higher 
D) 8 times higher 
A) 2 times higher 
B) 4 times higher 
C) 6 times higher 
D) 8 times higher

Question 15

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 16

All else equal, which of the following would tend to cause GDP per person to rise?

Accepted Answer

A) high population growth 
B) investment in human capital 
C) rapid growth in the number of workers 
D) policies to reduce imports 
A) high population growth 
B) investment in human capital 
C) rapid growth in the number of workers 
D) policies to reduce imports

Question 17

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Accepted Answer

A) True 
 B)False

Question 18

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Accepted Answer

A) by encouraging population growth 
B) by encouraging consumption 
C) by encouraging saving and investment 
D) by increasing government spending 
A) by encouraging population growth 
B) by encouraging consumption 
C) by encouraging saving and investment 
D) by increasing government spending

Question 19

In a market economy, when do we know that a resource has become scarcer?

Accepted Answer

A) when its price rises relative to other prices 
B) when it is nonrenewable and some of it is used 
C) when substitutes exist 
D) when there are no substitutes 
A) when its price rises relative to other prices 
B) when it is nonrenewable and some of it is used 
C) when substitutes exist 
D) when there are no substitutes

Question 20

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

How is a nation's standard of living determined?

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

In which of the following types of investment do foreigners buy shares in domestic companies?

From 1974 to 1982, what was the growth in Canadian productivity?

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

What does diminishing returns to capital imply?

Which of the following is a characteristic of inward-oriented policies?

Which of the following indicates greater scarcity of a natural resource?

Which of the following best explains productivity?

What is a valid policy to use for increasing the rate of economic growth?

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

A forest is an example of a nonrenewable resource.

All else equal, which of the following would tend to cause GDP per person to rise?

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

In a market economy, when do we know that a resource has become scarcer?

Both the standard of living and the growth of real GDP per person vary widely across countries.

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

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

How is a nation's standard of living determined?

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

In which of the following types of investment do foreigners buy shares in domestic companies?

From 1974 to 1982, what was the growth in Canadian productivity?

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

What does diminishing returns to capital imply?

Which of the following is a characteristic of inward-oriented policies?

Which of the following indicates greater scarcity of a natural resource?

Which of the following best explains productivity?

What is a valid policy to use for increasing the rate of economic growth?

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

A forest is an example of a nonrenewable resource.

All else equal, which of the following would tend to cause GDP per person to rise?

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

In a market economy, when do we know that a resource has become scarcer?

Both the standard of living and the growth of real GDP per person vary widely across countries.

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