Question 1

Natural resources

Accepted Answer

A)  are inputs provided by nature. 
B)  are inputs such as land,rivers,and mineral deposits. 
C)  take two forms: renewable and nonrenewable. 
D)  All of the above are correct. 
A)  are inputs provided by nature. 
B)  are inputs such as land,rivers,and mineral deposits. 
C)  take two forms: renewable and nonrenewable. 
D)  All of the above are correct.

Question 2

If a country were to increase its saving rate,then in the long run it would also increase its

Accepted Answer

A)  level of income. 
B)  growth rate of income. 
C)  growth rate of productivity. 
D)  All of the above are correct. 
A)  level of income. 
B)  growth rate of income. 
C)  growth rate of productivity. 
D)  All of the above are correct.

Question 3

Country A and country B are the same except country A currently has a lower level of capital.Assuming diminishing returns,if both countries increase their capital by 100 units and other factors that determine output are unchanged,then

Accepted Answer

A)  output in country A increases by more than in country B. 
B)  output in country A increases by the same amount as in country B. 
C)  output in country A increases by less than in country B. 
D)  None of the above is necessarily correct. 
A)  output in country A increases by more than in country B. 
B)  output in country A increases by the same amount as in country B. 
C)  output in country A increases by less than in country B. 
D)  None of the above is necessarily correct.

Question 4

If Country A produces 6,000 units of goods and services using 600 hours of labor,and if Country B produces 5,000 units of goods and services using 450 units of labor,then productivity is higher in Country B than in Country A.

Accepted Answer

A) True 
 B)False

Question 5

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,its physical capital,and its human capital,but its technology is unchanged.Which of the following would double?

Accepted Answer

A)  both output and productivity 
B)  output,but not productivity 
C)  productivity,but not output 
D)  neither productivity nor output 
A)  both output and productivity 
B)  output,but not productivity 
C)  productivity,but not output 
D)  neither productivity nor output

Question 6

Other things the same,a country that increases its saving rate increases

Accepted Answer

A)  its future productivity and future real GDP. 
B)  neither its future productivity nor future real GDP. 
C)  its future productivity,but not its future real GDP. 
D)  its future real GDP,but not its future productivity. 
A)  its future productivity and future real GDP. 
B)  neither its future productivity nor future real GDP. 
C)  its future productivity,but not its future real GDP. 
D)  its future real GDP,but not its future productivity.

Question 7

You are told that Country A experienced growth of real GDP per person of 4 percent per year throughout the 1900s.In view of other countries' experience,you would have to characterize Country A's growth as

Accepted Answer

A)  exceptionally high. 
B)  moderately high. 
C)  moderately low. 
D)  exceptionally low. 
A)  exceptionally high. 
B)  moderately high. 
C)  moderately low. 
D)  exceptionally low.

Question 8

The Economic Development Minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries.She asks you to pick the one you think most likely explains her country's low growth.Which of the following contributes to low growth?

Accepted Answer

A)  poorly enforced property rights 
B)  outward-oriented trade policies 
C)  policies that permit foreign investment 
D)  All of the above are correct. 
A)  poorly enforced property rights 
B)  outward-oriented trade policies 
C)  policies that permit foreign investment 
D)  All of the above are correct.

Question 9

Scenario 25-1.An economy's production form takes the form Y = AF(L,K,H,N).
-Refer to Scenario 25-1.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 
D)  Y = 4 
A)  Y = 4L + 2K + 3H + N 
B)  Y = (L + K + H + N)/4 
C)  Y =2 
D)  Y = 4

Question 10

In the long run,a higher saving rate

Accepted Answer

A)  cannot increase the capital stock. 
B)  means that people must consume less in the future. 
C)  increases the level of productivity. 
D)  None of the above is correct. 
A)  cannot increase the capital stock. 
B)  means that people must consume less in the future. 
C)  increases the level of productivity. 
D)  None of the above is correct.

Question 11

Which of the following is a determinant of productivity?

Accepted Answer

A)  human capital per worker 
B)  physical capital per worker 
C)  natural resources per worker 
D)  All of the above are correct. 
A)  human capital per worker 
B)  physical capital per worker 
C)  natural resources per worker 
D)  All of the above are correct.

Question 12

As capital per worker rises,output per worker rises.However,the increase in output per worker from an addition to capital is smaller,the larger is the existing amount of capital per worker.

Accepted Answer

A) True 
 B)False

Question 13

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

A) True 
 B)False

Question 14

Last year real GDP per person in the imaginary nation of Olympus was 4,500.The year before it was 4,250.By about what percentage did Olympian real GDP per person grow during the period?

Accepted Answer

A)  4.6 percent 
B)  5.2 percent 
C)  5.9 percent 
D)  6.5 percent 
A)  4.6 percent 
B)  5.2 percent 
C)  5.9 percent 
D)  6.5 percent

Question 15

The behavior of market prices over time indicates that natural resources

Accepted Answer

A)  are a limit to economic growth. 
B)  are unrelated to economic growth. 
C)  are not a limit to economic growth. 
D)  are the major determinant of productivity. 
A)  are a limit to economic growth. 
B)  are unrelated to economic growth. 
C)  are not a limit to economic growth. 
D)  are the major determinant of productivity.

Question 16

Country A has a population of 1,000,of whom 700 worked an average of 8 hours a day and had a productivity of 2.5.Country B has a population of 800,of whom 560 worked 8 hours a day and had productivity of 3.0.The country with the higher real GDP was

Accepted Answer

A)  country A,and the country with higher real GDP per person was country A. 
B)  country A,and the country with higher real GDP per person was country B. 
C)  country B,and the country with higher real GDP per person was country A. 
D)  country B,and the country with higher real GDP per person was country B. 
A)  country A,and the country with higher real GDP per person was country A. 
B)  country A,and the country with higher real GDP per person was country B. 
C)  country B,and the country with higher real GDP per person was country A. 
D)  country B,and the country with higher real GDP per person was country B.

Question 17

Suppose that an American opens and operates a candy factory in Finland.This is an example of

Accepted Answer

A)  foreign direct investment.American saving is used to finance Finish investment. 
B)  foreign direct investment.American saving is used to finance American investment. 
C)  foreign portfolio investment.American saving is used to finance Finish investment. 
D)  foreign portfolio investment.American saving is used to finance American investment. 
A)  foreign direct investment.American saving is used to finance Finish investment. 
B)  foreign direct investment.American saving is used to finance American investment. 
C)  foreign portfolio investment.American saving is used to finance Finish investment. 
D)  foreign portfolio investment.American saving is used to finance American investment.

Question 18

National defense and knowledge are generally considered to be

Accepted Answer

A)  private goods. 
B)  public goods. 
C)  proprietary goods. 
D)  societal goods. 
A)  private goods. 
B)  public goods. 
C)  proprietary goods. 
D)  societal goods.

Question 19

Greater scarcity of a natural resource is indicated

Accepted Answer

A)  by an increase in the price of the resource,whether the price increase is less than or greater than the rate of inflation. 
B)  only by an increase in the price of the resource that is less than the rate of inflation. 
C)  only by an increase in the price of the resource that is greater than the rate of inflation. 
D)  only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation. 
A)  by an increase in the price of the resource,whether the price increase is less than or greater than the rate of inflation. 
B)  only by an increase in the price of the resource that is less than the rate of inflation. 
C)  only by an increase in the price of the resource that is greater than the rate of inflation. 
D)  only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.

Question 20

For a given year,productivity in a particular country is most closely matched with that country's

Accepted Answer

A)  level of real GDP over that year. 
B)  level of real GDP divided by hours worked over that year. 
C)  growth rate of real GDP divided by hours worked over that year. 
D)  growth rate of real GDP per person over that year. 
A)  level of real GDP over that year. 
B)  level of real GDP divided by hours worked over that year. 
C)  growth rate of real GDP divided by hours worked over that year. 
D)  growth rate of real GDP per person over that year.

Exam 25: Production and Growth

Natural resources

If a country were to increase its saving rate,then in the long run it would also increase its

Country A and country B are the same except country A currently has a lower level of capital.Assuming diminishing returns,if both countries increase their capital by 100 units and other factors that determine output are unchanged,then

If Country A produces 6,000 units of goods and services using 600 hours of labor,and if Country B produces 5,000 units of goods and services using 450 units of labor,then productivity is higher in Country B than in Country A.

Suppose there are constant returns to scale.Now suppose that over time a country doubles its workers,its natural resources,its physical capital,and its human capital,but its technology is unchanged.Which of the following would double?

Other things the same,a country that increases its saving rate increases

You are told that Country A experienced growth of real GDP per person of 4 percent per year throughout the 1900s.In view of other countries' experience,you would have to characterize Country A's growth as

Scenario 25-1.An economy's production form takes the form Y = AF(L,K,H,N). -Refer to Scenario 25-1.If the production function has the constant-returns-to-scale property,then it is possible that the specific form of the production function is

In the long run,a higher saving rate

Which of the following is a determinant of productivity?

As capital per worker rises,output per worker rises.However,the increase in output per worker from an addition to capital is smaller,the larger is the existing amount of capital per worker.

Economist Michael Kremer found that world growth rates fell as population increased.

Last year real GDP per person in the imaginary nation of Olympus was 4,500.The year before it was 4,250.By about what percentage did Olympian real GDP per person grow during the period?

The behavior of market prices over time indicates that natural resources

Country A has a population of 1,000,of whom 700 worked an average of 8 hours a day and had a productivity of 2.5.Country B has a population of 800,of whom 560 worked 8 hours a day and had productivity of 3.0.The country with the higher real GDP was

Suppose that an American opens and operates a candy factory in Finland.This is an example of

National defense and knowledge are generally considered to be

Greater scarcity of a natural resource is indicated

For a given year,productivity in a particular country is most closely matched with that country's

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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 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 Trade-Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters