Question 1

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 productivityE) A) and C)
F) None of the above

Question 2

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Accepted Answer

A) True 
 B)False

Question 3

Human capital is the

Accepted Answer

A)   knowledge and skills that workers acquire through education, training, and experience.
B)   stock of equipment and structures that is used to produce goods and services.
C)   total number of hours worked in an economy.
D)   same thing as technological knowledge.E) C) and D)
F) None of the above

Question 4

Proprietary technology is technology

Accepted Answer

A)   that the government prohibits firms from using.
B)   conserves natural resources.
C)   that is useful while other types of technology are outdated.
D)   that is known or controlled only by the company that discovered it.E) All of the above
F) None of the above

Question 5

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.E) A) and D)
F) A) and C)

Question 6

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 7

When a society decides to increase its quantity of physical capital, the society

Accepted Answer

A)   can avoid the usual need to face trade-offs.
B)   is apparently not very concerned about its rate of economic growth in the future.
C)   is in effect deciding to consume fewer goods and services in the present.
D)   is in effect deciding to save less of its current income in the present.E) B) and C)
F) All of the above

Question 8

Which of the following is an example of physical capital?

Accepted Answer

A)   the strength of workers
B)   on the job training
C)   financial assets like cash and bonds
D)   the equipment in a factoryE) None of the above
F) B) and C)

Question 9

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Accepted Answer

In the long run, a higher saving rate le...

Question 10

"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 an unconventional view of the production process.
B)   is an assertion that capital is subject to increasing 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.E) C) and D)
F) A) and D)

Question 11

Figure 25-1 
-Refer to Figure 21-1. In what way is the figure relevant to the catch-up effect?

Accepted Answer

The catch-up effect is observed when a r...

Question 12

Suppose that an American company opens and operates a restaurant in Ireland. This is an example of

Accepted Answer

A)   foreign direct investment. American saving is used to finance Irish investment.
B)   foreign direct investment. American saving is used to finance American investment.
C)   foreign portfolio investment. American saving is used to finance Irish investment.
D)   foreign portfolio investment. American saving is used to finance American investment.E) A) and B)
F) None of the above

Question 13

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Accepted Answer

A)   stay the same.
B)   increase by exactly 50 percent.
C)   increase by exactly 100 percent.
D)   increase, but not necessarily by either 50 percent or 100 percent.E) B) and C)
F) None of the above

Question 14

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.E) A) and B)
F) A) and C)

Question 15

Figure 25-1.
On the horizontal axis, K/L represents capital K)  per worker L) . On the vertical axis, Y/L represents output Y)  per worker L) . 
-Refer to Figure 25-1. Choose a point anywhere on the curve and call it point A. If the economy is at point A in 2011, then it will definitely remain at point A in 2012 if, between 2011 and 2012,

Accepted Answer

A)   the quantity of physical capital remains constant; the number of workers doubles; and human capital, natural resources, and technology all double as well.
B)   the quantity of physical capital doubles; human capital, natural resources, and technology all double as well; and the number of workers remains constant.
C)   the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology all double as well.
D)   the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology remain constant.E) A) and D)
F) B) and D)

Question 16

Which of the following is a correct way to measure productivity?

Accepted Answer

A)   Divide the number of hours worked by the quantity of output.
B)   Divide the quantity of output by the number of hours worked.
C)   Determine how much output is produced in a given time.
D)   Determine how much time it takes to produce a unit of output.E) B) and D)
F) B) and C)

Question 17

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Accepted Answer

A)   the level of saving per person is 5.000 in Country A and 7,500 in Country B.
B)   the level of saving per person is 3,000 in Country A and 6,000 in Country B.
C)   Both of the above are correct.
D)   None of the above are correct.E) None of the above
F) A) and D)

Question 18

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Accepted Answer

A)   private goods rather than public goods. This gives people more incentive to engage in research.
B)   private goods rather than public goods. This gives people less incentive to engage in research.
C)   public goods rather than private goods. This gives people more incentive to engage in research.
D)   public goods rather than private goods. This gives people more incentive to engage in private research.E) None of the above
F) A) and C)

Question 19

The average income in a rich country

Accepted Answer

A)   is about 5 times that in a poor country. Further, people in rich countries have longer life expectancy.
B)   is about 5 times that in a poor country. However, people in rich countries have about the same life expectancy as those in poor countries.
C)   is more than ten times that in a poor country. Further, people in rich countries have longer life expectancy.
D)   is more than ten times that in poor country. However, people in rich countries have about the same life expectancy as those in poor countries.E) None of the above
F) B) and C)

Question 20

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Accepted Answer

A)   lend support to the invisible hand by maintaining property rights and political stability.
B)   limit foreign investment to industries that don't already exist in the country.
C)   impose trade restrictions to protect the interests of domestic producers and consumers.
D)   subsidize key industries.E) B) and C)
F) A) and C)

Exam 17: Production and Growth

When a society decides to increase its quantity of physical capital, the society

Correct Answer
verified

An economy's production function has the constantreturnstoscale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Correct Answer
verified

"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

Correct Answer
verified

Rapid population growth

Correct Answer
verified

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Correct Answer
verified

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Correct Answer
verified

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Correct Answer
verified

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

Correct Answer
verified

Suppose that an American company opens and operates a restaurant in Ireland. This is an example of

Correct Answer
verified

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Correct Answer
verified

Which of the following is an example of physical capital?

Correct Answer
verified

The average income in a rich country

Correct Answer
verified

Human capital is the

Correct Answer
verified

Correct Answer
verified

Figure 25-1 -Refer to Figure 21-1. In what way is the figure relevant to the catch-up effect?

Correct Answer
verified
The catch-up effect is observed when a r...
View Answer

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

Correct Answer
verified

Proprietary technology is technology

Correct Answer
verified

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct Answer
verified

Which of the following is a correct way to measure productivity?

Correct Answer
verified

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Correct Answer
verified
In the long run, a higher saving rate le...
View Answer

Exam 17: Production and Growth

When a society decides to increase its quantity of physical capital, the society

Correct AnswerverifiedShow Answer

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Correct AnswerverifiedShow Answer

"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

Correct AnswerverifiedShow Answer

Rapid population growth

Correct AnswerverifiedShow Answer

If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.

Correct AnswerverifiedShow Answer

Electronics firms may be able to get patents on their ideas. Doing so makes their ideas

Correct AnswerverifiedShow Answer

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose that an American company opens and operates a restaurant in Ireland. This is an example of

Correct AnswerverifiedShow Answer

Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000. All else constant, Country A will eventually have a higher standard of living than Country B if

Correct AnswerverifiedShow Answer

Which of the following is an example of physical capital?

Correct AnswerverifiedShow Answer

The average income in a rich country

Correct AnswerverifiedShow Answer

Human capital is the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 25-1 -Refer to Figure 21-1. In what way is the figure relevant to the catch-up effect?

Correct AnswerverifiedThe catch-up effect is observed when a r...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Proprietary technology is technology

Correct AnswerverifiedShow Answer

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct AnswerverifiedShow Answer

Which of the following is a correct way to measure productivity?

Correct AnswerverifiedShow Answer

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Correct AnswerverifiedIn the long run, a higher saving rate le...View AnswerShow Answer

Correct Answer
verified

An economy's production function has the constantreturnstoscale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The catch-up effect is observed when a r...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In the long run, a higher saving rate le...
View Answer