Question 1

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of
__________.

Accepted Answer

The answer of The level of real GDP is a...

Question 2

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.

Question 3

Mexico is

Accepted Answer

A)  a poor country, and over the past century its rate of economic growth has been higher than that of the United States. 
B)  a poor country, and over the past century its rate of economic growth has been lower than that of the United States. 
C)  a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. 
D)  a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.

Question 4

In some East Asian countries, average income, as measured by real GDP per person, has recently grown at an average annual rate that implies output will double about every

Accepted Answer

A)  10 years. 
B)  15 years. 
C)  20 years. 
D)  25 years.

Question 5

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

Accepted Answer

A)  tin 
B)  petroleum 
C)  gold 
D)  All of the above are correct.

Question 6

If your company opens and operates a branch in a foreign country, your company engages in foreign direct investment.

Accepted Answer

A) True 
 B)False

Question 7

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.

Question 8

According to studies using international data, an increase in the saving rate

Accepted Answer

A)  does not increase the growth rate of output. 
B)  increases the growth rate of output for a few years. 
C)  increases the growth rate of output for about a decade. 
D)  increases the growth rate of output for several decades.

Question 9

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Accepted Answer

The answer of In addition to investment in physical and...

Question 10

Which of the following is an example of physical capital?

Accepted Answer

A)  the available knowledge on how to make semiconductors 
B)  a taxi­cab driver's knowledge of the fastest routes to take 
C)  bulldozers, backhoes and other construction equipment 
D)  All of the above are correct.

Question 11

Suppose over the last five years that the price of recycled aluminum increased from $800 a ton to $900 a ton. Over the same time a measure of the overall price level increased from 120 to 138. The real price of recycled aluminum

Accepted Answer

A)  increased, so it became scarcer 
B)  increased, so it became less scarce 
C)  decreased, so it became scarcer 
D)  decreased, so it became less scarce

Question 12

Which of the following is consistent with the catch-up effect?

Accepted Answer

A)  The United States had a higher growth rate before 1900 than after. 
B)  After World War II the United States had lower growth rates than war-ravaged European countries. 
C)  Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. 
D)  All of the above are correct.

Question 13

Other things the same, an increase in population growth

Accepted Answer

A)  increases capital per worker. Further, there is some evidence that a higher population growth rate may increase the pace of technological progress. 
B)  increases capital per worker. However, there is some evidence that a higher population growth rate may decrease the pace of technological progress. 
C)  decreases capital per worker. Further, there is some evidence that a higher population growth rate may decrease the pace of technological progress. 
D)  decreases capital per worker. However, there is some evidence that a higher population growth rate may increase the pace of technological progress.

Question 14

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

Accepted Answer

A)  both the first and the second 
B)  the first but not the second 
C)  the second but not the first 
D)  neither the first nor the second

Question 15

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 500,000. In 2011 it had a population of 5,100 and real GDP of 520,200. During 2011 real GDP per person in Bovina 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.

Question 16

Which of the following statements is correct?

Accepted Answer

A)  Human capital per worker is a determinant of productivity. 
B)  A nation cannot be highly productive in producing goods and services without abundant quantities of natural resources. 
C)  Human capital and technological knowledge are the same thing. 
D)  All technological knowledge is proprietary.

Question 17

Consider the production function Y = 4FL,K,H,N). Suppose F10,8,6,5)= 100 and F30,24,18,15)=300. Does the production function have the property of constant returns to scale? Why or why not?

Accepted Answer

The answer of Consider the production function Y = 4FL,K,H,N)....

Question 18

Which country has had a higher growth rate than the US over about the last 120 years?

Accepted Answer

A)  Argentina 
B)  Germany 
C)  the United Kingdom 
D)  None of the above is correct.

Question 19

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 20

In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by

Accepted Answer