Question 1

Over the last century, U.S. real GDP per person grew at a rate of about

Accepted Answer

A)  2 percent per year, so that it is now 2 times as high as it was a century ago. 
B)  2 percent per year, so that it is now 8 times as high as it was a century ago. 
C)  4 percent per year, so that it is now 2 times as high as it was a century ago. 
D)  4 percent per year, so that it is now 8 times as high as it was a century ago. 
A)  2 percent per year, so that it is now 2 times as high as it was a century ago. 
B)  2 percent per year, so that it is now 8 times as high as it was a century ago. 
C)  4 percent per year, so that it is now 2 times as high as it was a century ago. 
D)  4 percent per year, so that it is now 8 times as high as it was a century ago.

Question 2

Why do we refer to physical capital as a produced factor of production?

Accepted Answer

Physical capital originates as

Question 3

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Accepted Answer

A)  Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
A)  Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
B)  Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. 
C)  Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. 
D)  Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.

Question 4

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Accepted Answer

A)  have no impact on the growth rate of real GDP per person. 
B)  decrease the growth of real GDP per person for a few years. 
C)  increase the growth of real GDP per person for several decades. 
D)  permanently increase the growth rate of real GDP per person. 
A)  have no impact on the growth rate of real GDP per person. 
B)  decrease the growth of real GDP per person for a few years. 
C)  increase the growth of real GDP per person for several decades. 
D)  permanently increase the growth rate of real GDP per person.

Question 5

Which of the following is an example of a produced factor of production?

Accepted Answer

A)  corn that is harvested from a field in Iowa 
B)  workers who are hired at a coal mine in West Virginia 
C)  skills that teachers in Texas acquire through continuing-education classes 
D)  All of the above are correct. 
A)  corn that is harvested from a field in Iowa 
B)  workers who are hired at a coal mine in West Virginia 
C)  skills that teachers in Texas acquire through continuing-education classes 
D)  All of the above are correct.

Question 6

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Accepted Answer

In the long run, a higher saving rate le

Question 7

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)  10 percent 
B)  14 percent 
C)  17 percent 
D)  21 percent 
A)  10 percent 
B)  14 percent 
C)  17 percent 
D)  21 percent

Question 8

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Accepted Answer

A)  The poor country has outward-oriented trade policies. 
B)  The poor country allows foreign direct investment. 
C)  The poor country has poorly developed property rights. 
D)  All of the above are correct. 
A)  The poor country has outward-oriented trade policies. 
B)  The poor country allows foreign direct investment. 
C)  The poor country has poorly developed property rights. 
D)  All of the above are correct.

Question 9

In an economy where net exports are zero, if saving rises in some period, then in that period

Accepted Answer

A)  consumption and investment fall. 
B)  consumption falls and investment rises. 
C)  consumption rises and investment falls. 
D)  consumption rises and investment falls 
A)  consumption and investment fall. 
B)  consumption falls and investment rises. 
C)  consumption rises and investment falls. 
D)  consumption rises and investment falls

Question 10

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is correct?

Accepted Answer

A)  In 1870, real income per person was higher in the United States than in any other country at that time. 
B)  Over about the last 100 years India experienced significantly higher growth of real income per person than did the United States. 
C)  Over about the last 100 years the United States experienced significantly higher growth of real income per person than did Japan. 
D)  None of the above are correct. 
A)  In 1870, real income per person was higher in the United States than in any other country at that time. 
B)  Over about the last 100 years India experienced significantly higher growth of real income per person than did the United States. 
C)  Over about the last 100 years the United States experienced significantly higher growth of real income per person than did Japan. 
D)  None of the above are correct.

Question 12

What word do we use to refer to the amount of goods and services produced for each hour of a worker's time?

Accepted Answer

The word i

Question 13

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Accepted Answer

A)  public good. 
B)  societal good. 
C)  private good. 
D)  normal good. 
A)  public good. 
B)  societal good. 
C)  private good. 
D)  normal good.

Question 14

Suppose Turkey increases its saving rate. In the long run

Accepted Answer

A)  the growth rates of productivity and real GDP per person increase. 
B)  productivity and real GDP per person increase. 
C)  the growth rate of productivity increases, and real GDP per person increases. 
D)  productivity increases, and the growth rate of real GDP per person increases. 
A)  the growth rates of productivity and real GDP per person increase. 
B)  productivity and real GDP per person increase. 
C)  the growth rate of productivity increases, and real GDP per person increases. 
D)  productivity increases, and the growth rate of real GDP per person increases.

Question 15

The traditional view of the production process is that capital is subject to

Accepted Answer

A)  constant returns. 
B)  increasing returns. 
C)  diminishing returns. 
D)  diminishing returns for low levels of capital, and increasing returns for high levels of capital. 
A)  constant returns. 
B)  increasing returns. 
C)  diminishing returns. 
D)  diminishing returns for low levels of capital, and increasing returns for high levels of capital.

Question 16

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

Accepted Answer

Inward­oriented policies are i

Question 17

What do we mean when we say that some technological knowledge is not proprietary?

Accepted Answer

Technological knowledge is not

Question 18

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 level of productivity. 
B)  In the long run, a higher saving rate leads to a higher level of income. 
C)  In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income. 
D)  All of the above are correct. 
A)  In the long run, a higher saving rate leads to a higher level of productivity. 
B)  In the long run, a higher saving rate leads to a higher level of income. 
C)  In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income. 
D)  All of the above are correct.

Question 19

In some countries it is time consuming and costly to establish ownership of property. Reforms to reduce these costs would likely

Accepted Answer

A)  have no affect on either real GDP nor productivity 
B)  raise real GDP and productivity. 
C)  raise real GDP but not productivity. 
D)  raise productivity but not real GDP. 
A)  have no affect on either real GDP nor productivity 
B)  raise real GDP and productivity. 
C)  raise real GDP but not productivity. 
D)  raise productivity but not real GDP.

Question 20

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A)  both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B)  both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C)  both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D)  both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia. 
A)  both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia. 
B)  both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia. 
C)  both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia. 
D)  both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.

Over the last century, U.S. real GDP per person grew at a rate of about

Why do we refer to physical capital as a produced factor of production?

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Which of the following is an example of a produced factor of production?

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

In an economy where net exports are zero, if saving rises in some period, then in that period

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Which of the following statements is correct?

What word do we use to refer to the amount of goods and services produced for each hour of a worker's time?

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Suppose Turkey increases its saving rate. In the long run

The traditional view of the production process is that capital is subject to

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

What do we mean when we say that some technological knowledge is not proprietary?

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?

In some countries it is time consuming and costly to establish ownership of property. Reforms to reduce these costs would likely

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

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

The Basic Tools of Finance

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

Six Debates Over Macroeconomic Policy

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Exam 7: Production and Growth

Over the last century, U.S. real GDP per person grew at a rate of about

Why do we refer to physical capital as a produced factor of production?

If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Which of the following is an example of a produced factor of production?

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

In an economy where net exports are zero, if saving rises in some period, then in that period

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Which of the following statements is correct?

What word do we use to refer to the amount of goods and services produced for each hour of a worker's time?

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Suppose Turkey increases its saving rate. In the long run

The traditional view of the production process is that capital is subject to

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

What do we mean when we say that some technological knowledge is not proprietary?

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?

In some countries it is time consuming and costly to establish ownership of property. Reforms to reduce these costs would likely

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

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

The Basic Tools of Finance

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

Six Debates Over Macroeconomic Policy

Filters