Question 1

Over the period 1900-2006,which of the following countries experienced the highest average annual growth rate of real GDP per person?

Accepted Answer

A)  Indonesia 
B)  India 
C)  Pakistan 
D)  Brazil 
A)  Indonesia 
B)  India 
C)  Pakistan 
D)  Brazil

Question 2

Which of the following is a correct way to measure productivity?

Accepted Answer

A)  Divide the number of hours worked by the quantity of output. 
B)  Divide the quantity of output by the number of hours worked. 
C)  Divide the quantity of output by the quantity of physical capital. 
D)  Divide the change in the quantity of output by the change in the number of hours worked. 
A)  Divide the number of hours worked by the quantity of output. 
B)  Divide the quantity of output by the number of hours worked. 
C)  Divide the quantity of output by the quantity of physical capital. 
D)  Divide the change in the quantity of output by the change in the number of hours worked.

Question 3

The average income in a rich country,such as the United States or Japan,is more than

Accepted Answer

A)  3 times,but less than 5 times,the average income in a poor country,such as Indonesia or Nigeria. 
B)  5 times,but less than 10 times,the average income in a poor country,such as Indonesia or Nigeria. 
C)  10 times,but less than 20 times,the average income in a poor country,such as Indonesia or Nigeria. 
D)  more than 20 times the average income in a poor country,such as Indonesia or Nigeria. 
A)  3 times,but less than 5 times,the average income in a poor country,such as Indonesia or Nigeria. 
B)  5 times,but less than 10 times,the average income in a poor country,such as Indonesia or Nigeria. 
C)  10 times,but less than 20 times,the average income in a poor country,such as Indonesia or Nigeria. 
D)  more than 20 times the average income in a poor country,such as Indonesia or Nigeria.

Question 4

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)  5 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
B)  10 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
C)  5 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger. 
D)  10 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger. 
A)  5 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
B)  10 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller. 
C)  5 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger. 
D)  10 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger.

Question 5

Other things the same,an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Question 6

You and your friend work together for 4 hours to produce a total of 12 futons.What is productivity?

Accepted Answer

A)  12 futons 
B)  24 futons 
C)  3 futons per hour of labor 
D)  1.5 futons per hour of labor 
A)  12 futons 
B)  24 futons 
C)  3 futons per hour of labor 
D)  1.5 futons per hour of labor

Question 7

Using the notation and production function in the text,Y/L is

Accepted Answer

A)  productivity. 
B)  output. 
C)  the availability of natural resources. 
D)  the amount of human capital. 
A)  productivity. 
B)  output. 
C)  the availability of natural resources. 
D)  the amount of human capital.

Question 8

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Accepted Answer

A)  its output would stay the same and so would its productivity. 
B)  its output and productivity would increase,but less than double. 
C)  its output and productivity would increase by more than double. 
D)  None of the above is correct. 
A)  its output would stay the same and so would its productivity. 
B)  its output and productivity would increase,but less than double. 
C)  its output and productivity would increase by more than double. 
D)  None of the above is correct.

Question 9

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 10

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Accepted Answer

A)  India 
B)  Mexico 
C)  Nigeria 
D)  Singapore 
A)  India 
B)  Mexico 
C)  Nigeria 
D)  Singapore

Question 11

Figure 25-1.On the horizontal axis,K/L represents capital (K)per worker (L).On the
vertical axis,Y/L represents output (Y)per worker (L).  
-Refer to Figure 25-1.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Accepted Answer

A)  In the long run,a higher saving rate leads to a higher growth rate of productivity. 
B)  In the long run,a higher saving rate leads to a higher growth rate of income. 
C)  Returns to capital become increasingly smaller as the amount of capital per worker increases. 
D)  All of the above are correct. 
A)  In the long run,a higher saving rate leads to a higher growth rate of productivity. 
B)  In the long run,a higher saving rate leads to a higher growth rate of income. 
C)  Returns to capital become increasingly smaller as the amount of capital per worker increases. 
D)  All of the above are correct.

Question 12

Economists generally believe that inward-oriented policies are more likely to foster growth than outward oriented policies.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over the last 100 or so years?

Accepted Answer

A)  Germany and Japan 
B)  Indonesia and the United Kingdom 
C)  the United States and Japan 
D)  Mexico and Pakistan 
A)  Germany and Japan 
B)  Indonesia and the United Kingdom 
C)  the United States and Japan 
D)  Mexico and Pakistan

Question 14

Over the period 1960-1991,

Accepted Answer

A)  South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B)  the United States 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 the United States even though it had a similar ratio of investment to GDP. 
D)  the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP. 
A)  South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP. 
B)  the United States 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 the United States even though it had a similar ratio of investment to GDP. 
D)  the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP.

Question 15

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment,poor countries tend to grow at a faster rate than rich countries.

Accepted Answer

A) True 
 B)False

Question 16

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

Accepted Answer

A)  the owner's knowledge of how to prepare vegetarian entrees 
B)  the money in the owner's account at the bank from which she borrowed money 
C)  the tables and chairs in the restaurant 
D)  the land the restaurant was built on 
A)  the owner's knowledge of how to prepare vegetarian entrees 
B)  the money in the owner's account at the bank from which she borrowed money 
C)  the tables and chairs in the restaurant 
D)  the land the restaurant was built on

Question 17

The catch-up effect can help explain

Accepted Answer

A)  the spectacular economic growth experienced by South Korea over the years 1960 to 1990. 
B)  the spectacular economic growth experienced by the United States over the years 1960 to 1990. 
C)  why the diminishing-returns property is no longer taken seriously by economists. 
D)  why the World Bank is more inclined to encourage the flow of capital to advanced economies rather than to developing economies. 
A)  the spectacular economic growth experienced by South Korea over the years 1960 to 1990. 
B)  the spectacular economic growth experienced by the United States over the years 1960 to 1990. 
C)  why the diminishing-returns property is no longer taken seriously by economists. 
D)  why the World Bank is more inclined to encourage the flow of capital to advanced economies rather than to developing economies.

Question 18

Over the period 1870-2006,the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Accepted Answer

A) True 
 B)False

Question 19

Investment in human capital has opportunity costs,but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 20

Patents turn new ideas into

Accepted Answer

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

Exam 25: Production and Growth

Over the period 1900-2006,which of the following countries experienced the highest average annual growth rate of real GDP per person?

Which of the following is a correct way to measure productivity?

The average income in a rich country,such as the United States or Japan,is more than

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Other things the same,an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

You and your friend work together for 4 hours to produce a total of 12 futons.What is productivity?

Using the notation and production function in the text,Y/L is

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Two countries with the same saving rates must have the same growth rate of real GDP per person.

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Figure 25-1.On the horizontal axis,K/L represents capital (K)per worker (L).On the vertical axis,Y/L represents output (Y)per worker (L). -Refer to Figure 25-1.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Economists generally believe that inward-oriented policies are more likely to foster growth than outward oriented policies.

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over the last 100 or so years?

Over the period 1960-1991,

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment,poor countries tend to grow at a faster rate than rich countries.

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

The catch-up effect can help explain

Over the period 1870-2006,the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Investment in human capital has opportunity costs,but investment in physical capital does not.

Patents turn new ideas into

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

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