Question 1

An increase in the saving rate would, other things the same,

Accepted Answer

A)  increase growth more for a poor country than for a rich country, and raise growth permanently. 
B)  increase growth more for a poor country than for a rich country, but raise growth temporarily. 
C)  increase growth more for a rich country than for a poor country, and raise growth permanently. 
D)  increase growth more for a rich country than for a poor country, but raise growth temporarily. 
A)  increase growth more for a poor country than for a rich country, and raise growth permanently. 
B)  increase growth more for a poor country than for a rich country, but raise growth temporarily. 
C)  increase growth more for a rich country than for a poor country, and raise growth permanently. 
D)  increase growth more for a rich country than for a poor country, but raise growth temporarily.

Question 2

Which of the following is an example of a nonrenewable resource?

Accepted Answer

A)  corn 
B)  oil 
C)  livestock 
D)  All of the above are correct. 
A)  corn 
B)  oil 
C)  livestock 
D)  All of the above are correct.

Question 3

Other things equal, relatively poor countries tend to grow

Accepted Answer

A)  slower than relatively rich countries; this is called the poverty trap. 
B)  slower than relatively rich countries; this is called the fall-behind effect. 
C)  faster than relatively rich countries; this is called the catch-up effect. 
D)  faster than relatively rich countries; this is called the constant-returns-to-scale effect. 
A)  slower than relatively rich countries; this is called the poverty trap. 
B)  slower than relatively rich countries; this is called the fall-behind effect. 
C)  faster than relatively rich countries; this is called the catch-up effect. 
D)  faster than relatively rich countries; this is called the constant-returns-to-scale effect.

Question 4

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 5

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N).
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it can be rewritten as

Accepted Answer

A)  Y/L = AF1, K/L, H/L, N/L) 
B)  Y/L = AFL, 1, H/L, N/L) 
C)  Y/L = AFL, K/L, 1, N/L) 
D)  Y/L = AFL, K/L, H/L, 1) 
A)  Y/L = AF1, K/L, H/L, N/L) 
B)  Y/L = AFL, 1, H/L, N/L) 
C)  Y/L = AFL, K/L, 1, N/L) 
D)  Y/L = AFL, K/L, H/L, 1)

Question 6

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not correct?

Accepted Answer

A)  Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. 
B)  With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. 
C)  The ranking of countries by average income changes substantially over time. 
D)  In some countries real income per person has changed very little over many years. 
A)  Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. 
B)  With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. 
C)  The ranking of countries by average income changes substantially over time. 
D)  In some countries real income per person has changed very little over many years.

Question 8

Which of the following would, by itself, reveal the most about a country's standard of living?

Accepted Answer

A)  its level of capital 
B)  the number of hours worked 
C)  its availability of natural resources 
D)  its productivity 
A)  its level of capital 
B)  the number of hours worked 
C)  its availability of natural resources 
D)  its productivity

Question 9

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society

Accepted Answer

A)  conserve resources for future generations. 
B)  sacrifice consumption goods and services now in order to enjoy more consumption in the future. 
C)  recycle resources so that future generations can produce goods and services with the accumulated capital. 
D)  None of the above is correct. 
A)  conserve resources for future generations. 
B)  sacrifice consumption goods and services now in order to enjoy more consumption in the future. 
C)  recycle resources so that future generations can produce goods and services with the accumulated capital. 
D)  None of the above is correct.

Question 10

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 11

If a production function has constant returns to scale, then if all inputs double so does production.

Accepted Answer

A) True 
 B)False

Question 12

Outward-oriented policies

Accepted Answer

A)  allow countries to take advantage of gains from trade. 
B)  have generally led to high growth for the countries that pursued them. 
C)  receive widespread support from economists. 
D)  All of the above are correct. 
A)  allow countries to take advantage of gains from trade. 
B)  have generally led to high growth for the countries that pursued them. 
C)  receive widespread support from economists. 
D)  All of the above are correct.

Question 13

If a Japanese company opens a new factory in South Korea, it makes

Accepted Answer

A)  foreign direct investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
B)  foreign direct investment. The factory will make a bigger impact on South Korea's GNP than on its GDP. 
C)  foreign portfolio investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
D)  foreign portfolio investment. The factory will make a bigger impact on South Korea's GNP than on its GDP. 
A)  foreign direct investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
B)  foreign direct investment. The factory will make a bigger impact on South Korea's GNP than on its GDP. 
C)  foreign portfolio investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
D)  foreign portfolio investment. The factory will make a bigger impact on South Korea's GNP than on its GDP.

Question 14

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Accepted Answer

A)  8 
B)  12 
C)  16 
D)  None of the above is correct. 
A)  8 
B)  12 
C)  16 
D)  None of the above is correct.

Question 15

In the past there have been violent protests against the World Bank and the World Trade Organization. The protesters argued that these institutions promote free trade and also encourage corporations in rich countries to invest in poor countries. The protesters contended that these practices make rich countries richer and poor countries poorer. An economist would

Accepted Answer

A)  disagree with the protesters because these practices will help make both rich and poor countries richer. 
B)  disagree with the protesters about free trade, but would agree with the protesters about corporate investment. 
C)  disagree with the protesters about corporate investment, but would agree with the protesters about free trade. 
D)  agree with the protesters. 
A)  disagree with the protesters because these practices will help make both rich and poor countries richer. 
B)  disagree with the protesters about free trade, but would agree with the protesters about corporate investment. 
C)  disagree with the protesters about corporate investment, but would agree with the protesters about free trade. 
D)  agree with the protesters.

Question 16

Suppose a country increases trade restrictions. This country would be pursing an

Accepted Answer

A)  inward policy, which most economists believe has beneficial effects on the economy. 
B)  inward policy, which most economists believe has adverse effects on the economy. 
C)  outward policy, which most economists believe has beneficial effects on the economy. 
D)  outward policy, which most economists believe has adverse effects on the economy. 
A)  inward policy, which most economists believe has beneficial effects on the economy. 
B)  inward policy, which most economists believe has adverse effects on the economy. 
C)  outward policy, which most economists believe has beneficial effects on the economy. 
D)  outward policy, which most economists believe has adverse effects on the economy.

Question 17

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Accepted Answer

A) True 
 B)False

Question 18

Over the period 1900-2010, which of the following countries experienced the highest average annual growth rate of real GDP per person?

Accepted Answer

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

Question 19

According to research by Robert Fogel, people in Britain grew taller because of

Accepted Answer

A)  genetics. However this increase in height had no effect on productivity. 
B)  genetics. This increase in height is associated with higher productivity. 
C)  higher caloric intake. However, this increase in height had no effect on productivity. 
D)  higher caloric intake. This increase in height is associated with higher productivity. 
A)  genetics. However this increase in height had no effect on productivity. 
B)  genetics. This increase in height is associated with higher productivity. 
C)  higher caloric intake. However, this increase in height had no effect on productivity. 
D)  higher caloric intake. This increase in height is associated with higher productivity.

Question 20

Country A and country B are the same except country A currently has more 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.

An increase in the saving rate would, other things the same,

Which of the following is an example of a nonrenewable resource?

Other things equal, relatively poor countries tend to grow

Greater scarcity of a natural resource is indicated

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N). -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it can be rewritten as

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Which of the following is not correct?

Which of the following would, by itself, reveal the most about a country's standard of living?

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society

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

If a production function has constant returns to scale, then if all inputs double so does production.

Outward-oriented policies

If a Japanese company opens a new factory in South Korea, it makes

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Suppose a country increases trade restrictions. This country would be pursing an

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Over the period 1900-2010, which of the following countries experienced the highest average annual growth rate of real GDP per person?

According to research by Robert Fogel, people in Britain grew taller because of

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

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

An increase in the saving rate would, other things the same,

Which of the following is an example of a nonrenewable resource?

Other things equal, relatively poor countries tend to grow

Greater scarcity of a natural resource is indicated

Scenario 25-1. An economy's production form takes the form Y = AFL, K, H, N). -Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it can be rewritten as

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Which of the following is not correct?

Which of the following would, by itself, reveal the most about a country's standard of living?

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. It requires that society

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

If a production function has constant returns to scale, then if all inputs double so does production.

Outward-oriented policies

If a Japanese company opens a new factory in South Korea, it makes

A barber shop produces 192 haircuts a day. Each barber in the shop works 8 hours per day and produces the same number of haircuts per hour. If the shop's productivity is 2 haircuts per hour of labor, then how many barbers does the shop employ?

Suppose a country increases trade restrictions. This country would be pursing an

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India.

Over the period 1900-2010, which of the following countries experienced the highest average annual growth rate of real GDP per person?

According to research by Robert Fogel, people in Britain grew taller because of

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

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