Question 1

Which of the following nations experienced average rates of economic growth of a bit under 2% over the last 100 years or so?

Accepted Answer

A)  Mexico 
B)  Brazil 
C)  the United States 
D)  All of the above are correct. 
A)  Mexico 
B)  Brazil 
C)  the United States 
D)  All of the above are correct.

Question 2

If a country's saving rate declined, then other things the same, in the long run the country would have

Accepted Answer

A)  lower productivity, but not lower real GDP per person. 
B)  lower productivity and lower real GDP per person. 
C)  lower real GDP per person, but not lower productivity 
D)  neither lower productivity nor lower real GDP per person. 
A)  lower productivity, but not lower real GDP per person. 
B)  lower productivity and lower real GDP per person. 
C)  lower real GDP per person, but not lower productivity 
D)  neither lower productivity nor lower real GDP per person.

Question 3

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 4

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

Accepted Answer

A)  less than inflation, so it became less scarce. 
B)  less than inflation, so it became more scarce. 
C)  more than inflation, so it became more scarce. 
D)  more than inflation, so it became less scarce. 
A)  less than inflation, so it became less scarce. 
B)  less than inflation, so it became more scarce. 
C)  more than inflation, so it became more scarce. 
D)  more than inflation, so it became less scarce.

Question 5

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

Accepted Answer

A)  and physical capital per worker will increase. 
B)  and physical capital per worker will decrease. 
C)  will increase but physical capital per worker will decrease. 
D)  will decrease but physical capital per worker will increase. 
A)  and physical capital per worker will increase. 
B)  and physical capital per worker will decrease. 
C)  will increase but physical capital per worker will decrease. 
D)  will decrease but physical capital per worker will increase.

Question 6

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Accepted Answer

A) True 
 B)False

Question 7

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Accepted Answer

A)  represents the traditional view of the production process. 
B)  is an assertion that capital is subject to diminishing returns. 
C)  is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant. 
D)  All of the above are correct. 
A)  represents the traditional view of the production process. 
B)  is an assertion that capital is subject to diminishing returns. 
C)  is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant. 
D)  All of the above are correct.

Question 8

In the United States over the past century, real GDP per person has grown by about
percent per year.

Accepted Answer

2 or, more

Question 9

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Accepted Answer

A)  Upland has higher productivity and higher real GDP per person than Lowland. 
B)  Upland has higher productivity but lower real GDP per person than Lowland. 
C)  Upland has lower productivity but higher real GDP per person than Lowland. 
D)  Upland has lower productivity and lower real GDP per person than Lowland. 
A)  Upland has higher productivity and higher real GDP per person than Lowland. 
B)  Upland has higher productivity but lower real GDP per person than Lowland. 
C)  Upland has lower productivity but higher real GDP per person than Lowland. 
D)  Upland has lower productivity and lower real GDP per person than Lowland.

Question 10

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

Accepted Answer

A)  the United Kingdom 
B)  Mexico 
C)  Argentina 
D)  China 
A)  the United Kingdom 
B)  Mexico 
C)  Argentina 
D)  China

Question 11

The behavior of market prices over time indicates that natural resources are

Accepted Answer

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

Question 12

Which of the following statements is correct?

Accepted Answer

A)  By definition, all natural resources are nonrenewable. 
B)  Market prices give us reason to believe that natural resources are a limit to economic growth. 
C)  An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy. 
D)  Differences in natural resources can explain some of the differences in standards of living around the world. 
A)  By definition, all natural resources are nonrenewable. 
B)  Market prices give us reason to believe that natural resources are a limit to economic growth. 
C)  An economy must be blessed with ample quantities of natural resources if it is to be a highly productive economy. 
D)  Differences in natural resources can explain some of the differences in standards of living around the world.

Question 13

Productivity is the

Accepted Answer

A)  key determinant of living standards, and growth in productivity is the key determinant of growth in living standards. 
B)  key determinant of living standards, but growth in productivity is not the key determinant of growth in living standards. 
C)  not the key determinant of living standards, but growth in productivity is the key determinant of growth in living standards. 
D)  not the key determinant of living standards, and growth in productivity is not the key determinant of growth in living standards. 
A)  key determinant of living standards, and growth in productivity is the key determinant of growth in living standards. 
B)  key determinant of living standards, but growth in productivity is not the key determinant of growth in living standards. 
C)  not the key determinant of living standards, but growth in productivity is the key determinant of growth in living standards. 
D)  not the key determinant of living standards, and growth in productivity is not the key determinant of growth in living standards.

Question 14

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 15

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

Accepted Answer

A)  around four times a country with less than 20 percent of the population living near the coast. 
B)  around ten times a country with less than 20 percent of the population living near the coast. 
C)  around twenty times a country with less than 20 percent of the population living near the coast. 
D)  around fifty times a country with less than 20 percent of the population living near the coast. 
A)  around four times a country with less than 20 percent of the population living near the coast. 
B)  around ten times a country with less than 20 percent of the population living near the coast. 
C)  around twenty times a country with less than 20 percent of the population living near the coast. 
D)  around fifty times a country with less than 20 percent of the population living near the coast.

Question 16

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

Accepted Answer

A)  productivity. 
B)  population. 
C)  preferences. 
D)  prices. 
A)  productivity. 
B)  population. 
C)  preferences. 
D)  prices.

Question 17

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 level of real GDP per person. 
B)  immediately and permanently decrease the level of real GDP per person. 
C)  immediately and permanently increase the level of real GDP person. 
D)  gradually raise the level of real GDP per person. 
A)  have no impact on the level of real GDP per person. 
B)  immediately and permanently decrease the level of real GDP per person. 
C)  immediately and permanently increase the level of real GDP person. 
D)  gradually raise the level of real GDP per person.

Question 18

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity

Question 19

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Accepted Answer

A) True 
 B)False

Question 20

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

Accepted Answer

The level of that na

Exam 12: Production and Growth

Which of the following nations experienced average rates of economic growth of a bit under 2% over the last 100 years or so?

If a country's saving rate declined, then other things the same, in the long run the country would have

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

Suppose over the last year that the price of iron ore increased from $1,200 a ton to $1,275 a ton. Over the same time a measure of the overall price level increased from 150 to 156. The price of iron ore increased by

If the best educated and most skilled persons leave a country, then in the short term this country's human capital per worker

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

In the United States over the past century, real GDP per person has grown by about percent per year.

Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500.

Among the following countries, which one has the highest level of real GDP per person but the lowest growth rate of real GDP per person over a very long period of time?

The behavior of market prices over time indicates that natural resources are

Which of the following statements is correct?

Productivity is the

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

Countries with more than 80 percent of their population living within 100 kilometers of a coast will have an average GDP per person that is

The one variable that stands out as the most significant explanation of large variations in living standards around the world is

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

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

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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