Question 1

Government corruption

Accepted Answer

A)  impedes the coordinating power of markets and discourages investment. 
B)  impedes the coordinating power of markets but does not discourage investment. 
C)  does not impede the coordinating power of markets, but does discourage investment. 
D)  can neither impede the coordinating power of markets nor discourage investment. 
A)  impedes the coordinating power of markets and discourages investment. 
B)  impedes the coordinating power of markets but does not discourage investment. 
C)  does not impede the coordinating power of markets, but does discourage investment. 
D)  can neither impede the coordinating power of markets nor discourage investment.

Question 2

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Accepted Answer

A)  raise productivity. Other things the same, this increase will be larger in a poor country. 
B)  raise productivity. Other things the same, this increase will be larger in a rich country. 
C)  reduce productivity. Other things the same, this decrease will be larger in a poor country. 
D)  reduce productivity. Other things the same, this decrease will be larger in a rich country. 
A)  raise productivity. Other things the same, this increase will be larger in a poor country. 
B)  raise productivity. Other things the same, this increase will be larger in a rich country. 
C)  reduce productivity. Other things the same, this decrease will be larger in a poor country. 
D)  reduce productivity. Other things the same, this decrease will be larger in a rich country.

Question 3

Rapid population growth

Accepted Answer

A)  was hailed by Thomas Robert Malthus as the key to future economic growth. 
B)  tends to lead to higher levels of educational attainment. 
C)  is the main reason that less developed nations are poor. 
D)  may depress economic prosperity by reducing the amount of capital which each worker has to work with. 
A)  was hailed by Thomas Robert Malthus as the key to future economic growth. 
B)  tends to lead to higher levels of educational attainment. 
C)  is the main reason that less developed nations are poor. 
D)  may depress economic prosperity by reducing the amount of capital which each worker has to work with.

Question 4

Explain the distinction between technological knowledge and human capital.

Accepted Answer

Technological knowledge refers

Question 5

In 2010, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2011 the population was 6,200 and real GDP of 128,960. Over the year in question, real GDP per person in Mainland grew by

Accepted Answer

A)  2 percent, which is high compared to average U.S. growth over the last one-hundred years. 
B)  2 percent, which is about the same as average U.S. growth over the last one-hundred years. 
C)  4 percent, which is high compared to average U.S. growth over the last one-hundred years. 
D)  4 percent, which is about the same as average U.S. growth over the last one-hundred years. 
A)  2 percent, which is high compared to average U.S. growth over the last one-hundred years. 
B)  2 percent, which is about the same as average U.S. growth over the last one-hundred years. 
C)  4 percent, which is high compared to average U.S. growth over the last one-hundred years. 
D)  4 percent, which is about the same as average U.S. growth over the last one-hundred years.

Question 6

Which of the following statements is correct?

Accepted Answer

A)  In the late 1800s, real GDP per person was higher in the United Kingdom than in the United States. 
B)  In 2010, real GDP per person was higher in the United Kingdom than in the United States. 
C)  The average annual growth rate of real GDP was higher in the United Kingdom than in the United States between the late 1800s and 2010. 
D)  All of the above are correct. 
A)  In the late 1800s, real GDP per person was higher in the United Kingdom than in the United States. 
B)  In 2010, real GDP per person was higher in the United Kingdom than in the United States. 
C)  The average annual growth rate of real GDP was higher in the United Kingdom than in the United States between the late 1800s and 2010. 
D)  All of the above are correct.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Because of , an increase in the saving rate leads to higher growth of income and productivity only for a while.

Accepted Answer

The answer of Because of , an increase in the...

Question 9

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

Accepted Answer

A)  For a shoe factory: leather, hand tools, the managers' knowledge of shoe making. 
B)  For a steel mill: the blast furnaces, iron ore, the workers. 
C)  For an airline: oil used to make jet fuel, the pilots' knowledge of flying, jets. 
D)  None of the above is correct. 
A)  For a shoe factory: leather, hand tools, the managers' knowledge of shoe making. 
B)  For a steel mill: the blast furnaces, iron ore, the workers. 
C)  For an airline: oil used to make jet fuel, the pilots' knowledge of flying, jets. 
D)  None of the above is correct.

Question 10

A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in how many generations?

Accepted Answer

A)  one 
B)  two 
C)  three 
D)  four 
A)  one 
B)  two 
C)  three 
D)  four

Question 11

Janet is a farmer. Which of the following are included in her human capital?

Accepted Answer

A)  her tractor and what she's learned from experience 
B)  her tractor but not what she's learned from experience 
C)  what she's learned from experience but not her tractor 
D)  neither her tractor nor what she's learned from experience 
A)  her tractor and what she's learned from experience 
B)  her tractor but not what she's learned from experience 
C)  what she's learned from experience but not her tractor 
D)  neither her tractor nor what she's learned from experience

Question 12

Which of the following measures how the level of well-being in a country has changed over time?

Accepted Answer

A)  level of nominal GDP per person. 
B)  growth rate of nominal GDP. 
C)  growth rate of real GDP. 
D)  growth rate of real GDP per person. 
A)  level of nominal GDP per person. 
B)  growth rate of nominal GDP. 
C)  growth rate of real GDP. 
D)  growth rate of real GDP per person.

Question 13

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

Accepted Answer

A)  a plant in which automobiles are assembled 
B)  skills that people accumulate in high school and college 
C)  skills that people accumulate through experience in the workplace 
D)  All of the above are correct. 
A)  a plant in which automobiles are assembled 
B)  skills that people accumulate in high school and college 
C)  skills that people accumulate through experience in the workplace 
D)  All of the above are correct.

Question 14

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 15

In the production function   , which symbol reflects the state of technology?

Accepted Answer

A)  A 
B)  K 
C)  H 
D)  N 
A)  A 
B)  K 
C)  H 
D)  N

Question 16

All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?

Accepted Answer

A)  Productivity will definitely fall. 
B)  Productivity will definitely be unchanged. 
C)  Productivity will definitely rise. 
D)  None of the above are necessarily correct. 
A)  Productivity will definitely fall. 
B)  Productivity will definitely be unchanged. 
C)  Productivity will definitely rise. 
D)  None of the above are necessarily correct.

Question 17

Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?

Accepted Answer

The explanation is based on the concept

Question 18

Figure 25-1  
-Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

Accepted Answer

Yes, the bowed-out concave) na

Question 19

One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,

Accepted Answer

A)  people's nominal incomes were, on average, much lower than they are today. 
B)  personal fortunes were not accurately measured. 
C)  many of the goods and services that we now take for granted were not available. 
D)  international trade had not yet begun to flourish. 
A)  people's nominal incomes were, on average, much lower than they are today. 
B)  personal fortunes were not accurately measured. 
C)  many of the goods and services that we now take for granted were not available. 
D)  international trade had not yet begun to flourish.

Question 20

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

Accepted Answer

A) True 
 B)False

Exam 12: Production and Growth

Government corruption

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Rapid population growth

Explain the distinction between technological knowledge and human capital.

In 2010, the imaginary nation of Mainland had a population of 6,000 and real GDP of 120,000. In 2011 the population was 6,200 and real GDP of 128,960. Over the year in question, real GDP per person in Mainland grew by

Which of the following statements is correct?

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

Because of , an increase in the saving rate leads to higher growth of income and productivity only for a while.

Which of the following lists contains, in this order, natural resources, physical capital, and human capital?

A country experiencing a growth rate of 12% per year can go from being one of the poorest to one of the richest in how many generations?

Janet is a farmer. Which of the following are included in her human capital?

Which of the following measures how the level of well-being in a country has changed over time?

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

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

In the production function , which symbol reflects the state of technology?

All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?

Figure 25-1 -Refer to Figure 21-1. "When the amount of capital per worker increases by one unit, a poor country experiences a greater benefit than does a rich country." Does the figure illustrate this notion? Briefly explain.

One can argue that the average American today is "richer" than the richest American 100 years ago, given that 100 years ago,

If a country has a higher level of productivity than another, then it also has a higher level of real GDP.

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

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

Six Debates Over Macroeconomic Policy

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