Question 1

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Accepted Answer

A)  pursues inward-oriented policies. 
B)  has natural seaports. 
C)  minimizes the role of the courts in its economy. 
D)  enacts policies to encourage consumption and discourage saving. 
A)  pursues inward-oriented policies. 
B)  has natural seaports. 
C)  minimizes the role of the courts in its economy. 
D)  enacts policies to encourage consumption and discourage saving.

Question 2

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

Accepted Answer

Inward­oriented policies are i

Question 3

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Accepted Answer

A)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital. 
A)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. 
B)  both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital. 
C)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. 
D)  both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.

Question 4

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Accepted Answer

A)  exceptionally high. 
B)  moderately high. 
C)  moderately low. 
D)  exceptionally low. 
A)  exceptionally high. 
B)  moderately high. 
C)  moderately low. 
D)  exceptionally low.

Question 5

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 6

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct. 
A)  fish 
B)  soybeans 
C)  wood 
D)  All of the above are correct.

Question 7

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Accepted Answer

A) True 
 B)False

Question 8

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

Accepted Answer

A)  productivity and output both rise. 
B)  productivity rises and output falls. 
C)  productivity falls and output rises. 
D)  productivity and output fall. 
A)  productivity and output both rise. 
B)  productivity rises and output falls. 
C)  productivity falls and output rises. 
D)  productivity and output fall.

Question 9

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 10

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Accepted Answer

A)  some of the income from the factory accrues to people who do not live in Algeria. 
B)  gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad. 
C)  all of the income from the factory is included in Algeria's GDP. 
D)  All of the above are correct. 
A)  some of the income from the factory accrues to people who do not live in Algeria. 
B)  gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad. 
C)  all of the income from the factory is included in Algeria's GDP. 
D)  All of the above are correct.

Question 11

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 12

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 13

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)  education 
B)  research and development 
C)  nutrition 
D)  trade restrictions 
A)  education 
B)  research and development 
C)  nutrition 
D)  trade restrictions

Question 14

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Accepted Answer

A)  1.5 percent per year. 
B)  2.0 percent per year. 
C)  2.5 percent per year. 
D)  3.0 percent per year. 
A)  1.5 percent per year. 
B)  2.0 percent per year. 
C)  2.5 percent per year. 
D)  3.0 percent per year.

Question 15

A certain production process requires only two types of inputs - capital and labor. In 2006, 100 units of labor and 50 units of capital were employed, and 100 units of output were produced. In 2013, 112 units of labor and 56 units of capital were employed. If the production process displays constant returns to scale, then how many units of output were produced in 2013?

Accepted Answer

A)  100 
B)  112 
C)  124 
D)  144 
A)  100 
B)  112 
C)  124 
D)  144

Question 16

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Accepted Answer

A)  160 
B)  56 
C)  8 
D)  None of the above is correct. 
A)  160 
B)  56 
C)  8 
D)  None of the above is correct.

Question 17

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Accepted Answer

A)  reduce real GDP per person and productivity. 
B)  reduce real GDP per person but not productivity. 
C)  reduce productivity but not real GDP per person. 
D)  None of the above is correct. 
A)  reduce real GDP per person and productivity. 
B)  reduce real GDP per person but not productivity. 
C)  reduce productivity but not real GDP per person. 
D)  None of the above is correct.

Question 18

The population growth rate tends to be higher in developed countries than in developing countries.

Accepted Answer

A) True 
 B)False

Question 19

If a country's saving rate increases, then in the long run

Accepted Answer

A)  productivity is higher but real GDP per person is not higher. 
B)  real GDP per person is higher but productivity is not higher. 
C)  productivity and real GDP per person are both higher. 
D)  neither productivity nor real GDP per person is higher. 
A)  productivity is higher but real GDP per person is not higher. 
B)  real GDP per person is higher but productivity is not higher. 
C)  productivity and real GDP per person are both higher. 
D)  neither productivity nor real GDP per person is higher.

Question 20

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Accepted Answer

The standard of living is a measure of h

Exam 12: Production and Growth

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

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

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

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

Which of the following is an example of a renewable natural resource?

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

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

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Both the standard of living and the growth of real GDP per person vary widely across countries.

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

The population growth rate tends to be higher in developed countries than in developing countries.

If a country's saving rate increases, then in the long run

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

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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