Question 1

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)  both the demand for the resource and the supply of the resource have increased 
B)  both the demand for the resource and the supply of the resource have decreased 
C)  demand for the resource is unchanged and the supply of the resource has increased 
D)  the demand for the resource has decreased and the supply of the resource is unchanged 
A)  both the demand for the resource and the supply of the resource have increased 
B)  both the demand for the resource and the supply of the resource have decreased 
C)  demand for the resource is unchanged and the supply of the resource has increased 
D)  the demand for the resource has decreased and the supply of the resource is unchanged

Question 2

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 3

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 4

Investment in human capital has opportunity costs, but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 5

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in

Accepted Answer

A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment. 
A)  foreign portfolio investment. 
B)  indirect domestic investment. 
C)  foreign direct investment. 
D)  foreign indirect investment.

Question 6

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Accepted Answer

A)  Canada and China 
B)  China and India 
C)  Germany and India 
D)  Germany and Pakistan 
A)  Canada and China 
B)  China and India 
C)  Germany and India 
D)  Germany and Pakistan

Question 7

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Accepted Answer

A)  the production process cannot be enhanced by technological advances. 
B)  no mathematical representation of the relevant production function can be formulated. 
C)  the relevant production function has the limits-to-growth property. 
D)  the relevant production function has the constant-returns-to-scale property. 
A)  the production process cannot be enhanced by technological advances. 
B)  no mathematical representation of the relevant production function can be formulated. 
C)  the relevant production function has the limits-to-growth property. 
D)  the relevant production function has the constant-returns-to-scale property.

Question 8

What are the long-run effects on productivity and income of an increase in the saving rate?

Accepted Answer

In the long run, a higher savi

Question 9

Average income has been stagnant for many years in

Accepted Answer

A)  Western European counties. 
B)  some Asian countries like South Korea and Singapore. 
C)  some Sub-Saharan African countries. 
D)  All of the above are correct. 
A)  Western European counties. 
B)  some Asian countries like South Korea and Singapore. 
C)  some Sub-Saharan African countries. 
D)  All of the above are correct.

Question 10

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N).
-Refer to Scenario 25-1. In the production function, which of the following represents technology?

Accepted Answer

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

Question 11

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

Accepted Answer

A)  both technological knowledge that is a public good and education 
B)  technological knowledge that is a public good, but not education 
C)  education, but not technological knowledge that is a public good 
D)  neither education, nor technological knowledge that is a public good 
A)  both technological knowledge that is a public good and education 
B)  technological knowledge that is a public good, but not education 
C)  education, but not technological knowledge that is a public good 
D)  neither education, nor technological knowledge that is a public good

Question 12

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 13

What is the distinction between foreign direct investment and foreign portfolio investment?

Accepted Answer

A capital investment that is owned and o

Question 14

All else equal, which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)  a change from inward-oriented policies to outward-oriented policies 
B)  an increase in investment in human capital 
C)  strengthening of property rights. 
D)  All of the above are correct. 
A)  a change from inward-oriented policies to outward-oriented policies 
B)  an increase in investment in human capital 
C)  strengthening of property rights. 
D)  All of the above are correct.

Question 15

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Accepted Answer

A)  private goods and increasing the incentive to engage in research. 
B)  private goods but decreasing the incentive to engage in research. 
C)  public goods and increasing the incentive to engage in research. 
D)  public goods but decreasing the incentive to engage in research. 
A)  private goods and increasing the incentive to engage in research. 
B)  private goods but decreasing the incentive to engage in research. 
C)  public goods and increasing the incentive to engage in research. 
D)  public goods but decreasing the incentive to engage in research.

Question 16

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 17

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

Accepted Answer

A)  and real GDP per person rise. 
B)  rises but real GDP per person falls. 
C)  falls and real GDP per person rises. 
D)  and real GDP per person fall. 
A)  and real GDP per person rise. 
B)  rises but real GDP per person falls. 
C)  falls and real GDP per person rises. 
D)  and real GDP per person fall.

Question 18

Patents turn new ideas into

Accepted Answer

A)  public goods, and increase the incentive to engage in research. 
B)  public goods, but decrease the incentive to engage in research. 
C)  private goods, and increase the incentive to engage in research. 
D)  private goods, but decrease the incentive to engage in research. 
A)  public goods, and increase the incentive to engage in research. 
B)  public goods, but decrease the incentive to engage in research. 
C)  private goods, and increase the incentive to engage in research. 
D)  private goods, but decrease the incentive to engage in research.

Question 19

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment will

Accepted Answer

A)  increase U.S. GNP more than it increases U.S. GDP. 
B)  increase U.S. GDP more than it increases U.S. GNP. 
C)  have no affect on U.S. GNP, but will increase U.S. GDP. 
D)  have no affect on U.S. GNP or GDP. 
A)  increase U.S. GNP more than it increases U.S. GDP. 
B)  increase U.S. GDP more than it increases U.S. GNP. 
C)  have no affect on U.S. GNP, but will increase U.S. GDP. 
D)  have no affect on U.S. GNP or GDP.

Question 20

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

Exam 25: Production and Growth

In which of the following cases can we be certain that a natural resource has become scarcer?

Suppose Turkey increases its saving rate. In the long run

Government corruption

Investment in human capital has opportunity costs, but investment in physical capital does not.

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

What are the long-run effects on productivity and income of an increase in the saving rate?

Average income has been stagnant for many years in

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N). -Refer to Scenario 25-1. In the production function, which of the following represents technology?

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

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

What is the distinction between foreign direct investment and foreign portfolio investment?

All else equal, which of the following would tend to cause real GDP per person to rise?

Inventors often obtain patents on new products and processes, thereby turning new ideas into

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

If over a short time there is an increase in the number of people retired and a decrease in the number of people working, then productivity

Patents turn new ideas into

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment will

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?

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

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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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