Question 1

Countries like South Korea and Singapore have shown tremendous growth rates in recent years because

Accepted Answer

A)   of diminishing returns.
B)   of the catch-up effect.
C)   of lower levels of domestic investment in recent years.
D)   they have limited international trade.E) B) and D)
F) None of the above

Question 2

What is the difference between human capital and technology?

Accepted Answer

Technology is society's understanding of...

Question 3

Human capital refers to human-made capital such as tools and machinery, as opposed to natural capital such as rivers and timber.

Accepted Answer

A) True 
 B)False

Question 4

Our standard of living is most closely related to

Accepted Answer

A)   how hard we work.
B)   our supply of capital, because everything of value is produced by machinery.
C)   our productivity, because our income is equal to what we produce.
D)   our supply of natural resources, because they limit production.E) B) and D)
F) A) and D)

Question 5

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

Most economists believe that poor nation...

Question 6

Which of the following describes an increase in technological knowledge? A farmer:

Accepted Answer

A)   sends his child to agricultural college and the child returns to work on the farm.
B)   hires another day labourer.
C)   buys another tractor.
D)   discovers that it is better to plant in the spring rather than in the autumn.E) None of the above
F) A) and B)

Question 7

Once a country is wealthy,

Accepted Answer

A)   it no longer needs any human capital.
B)   capital becomes more productive due to the "catch-up effect."
C)   none of these answers
D)   it may be harder for it to grow quickly because of the diminishing returns to capital.
E)   it is nearly impossible for it to become relatively poorer.F) A) and E)
G) A) and C)

Question 8

If a production function exhibits constant returns to scale, then doubling all of the inputs doubles output.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements regarding the impact of population growth on productivity is true?

Accepted Answer

A)   There is no evidence, yet, that rapid population growth stretches natural resources to the point that it limits growth in productivity.
B)   all of these answers
C)   Rapid population growth may dilute the capital stock, lowering productivity.
D)   Rapid population growth may promote technological progress, increasing productivity.E) A) and B)
F) A) and C)

Question 10

If 10 farmers generate €500,000 in real GDP, the output per worker would be

Accepted Answer

A)   €2,000
B)   €5,000
C)   €50,000
D)   €500,000E) A) and B)
F) C) and D)

Question 11

If the capital stock increases faster than employment, then we would expect

Accepted Answer

A)   both output and labour productivity to rise.
B)   output to rise but labour productivity to fall.
C)   both output and labour productivity to fall.
D)   output to fall but labour productivity to rise.E) A) and D)
F) None of the above

Question 12

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Accepted Answer

A production function is a mathematical ...

Question 13

When a nation has very little GDP per capita,

Accepted Answer

A)   it is doomed to being relatively poor forever.
B)   none of these answers
C)   an increase in capital will likely have little impact on output.
D)   it has the potential to grow relatively quickly due to the "catch-up-effect."
E)   it must be a small nation.F) A) and D)
G) B) and D)

Question 14

Thomas Malthus's predictions turned out to be wrong due to

Accepted Answer

A)   technological advances such as those during the Industrial Revolution.
B)   smaller populations now than in the time of Malthus.
C)   the effects of brain-drain.
D)   unlimited natural resources.E) B) and D)
F) None of the above

Question 15

Which of the following government policies is least likely to increase growth in Africa?

Accepted Answer

A)   increase expenditures on public education
B)   eliminate civil war
C)   All of these answers would increase growth.
D)   reduce restrictions on foreign capital investment
E)   increase restrictions on the importing of European tractors and electronicsF) A) and B)
G) C) and E)

Question 16

Which of the following expenditures to enhance productivity is most likely to convey a positive externality?

Accepted Answer

A)   Megabank buys a new computer.
B)   Nathalie pays her university tuition fees.
C)   Exxon leases a new oil field.
D)   General Motors buys a new drill press.E) All of the above
F) A) and B)

Question 17

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

Accepted Answer

In addition to investment in physical an...

Question 18

An increase in the rate of saving and investment permanently increases a country's rate of growth.

Accepted Answer

A) True 
 B)False

Question 19

If, in some European country, real GDP/person in 2011 is €18,073 and real GDP/person in 2012 is €18,635, what is the growth rate of real output per person over this period?

Accepted Answer

A)   2.0 per cent
B)   3.1 per cent
C)   18.0 per cent
D)   18.6 percent
E)   5.62 per centF) B) and E)
G) A) and E)

Question 20

Labour productivity, measuring the output per worker,

Accepted Answer

A)   increases with increases in technology.
B)   decreases with increases in technology.
C)   increases with increases in capital stock.
D)   is impossible to measure since so many workers are involved in the service sector.E) All of the above
F) A) and C)

Exam 22: Production and Growth

If, in some European country, real GDP/person in 2011 is €18,073 and real GDP/person in 2012 is €18,635, what is the growth rate of real output per person over this period?

Correct AnswerverifiedShow Answer

When a nation has very little GDP per capita,

Correct AnswerverifiedShow Answer

If a production function exhibits constant returns to scale, then doubling all of the inputs doubles output.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedIn addition to investment in physical an...View AnswerShow Answer

Countries like South Korea and Singapore have shown tremendous growth rates in recent years because

Correct AnswerverifiedShow Answer

If the capital stock increases faster than employment, then we would expect

Correct AnswerverifiedShow Answer

Which of the following government policies is least likely to increase growth in Africa?

Correct AnswerverifiedShow Answer

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Correct AnswerverifiedA production function is a mathematical ...View AnswerShow Answer

Once a country is wealthy,

Correct AnswerverifiedShow Answer

Thomas Malthus's predictions turned out to be wrong due to

Correct AnswerverifiedShow Answer

Labour productivity, measuring the output per worker,

Correct AnswerverifiedShow Answer

How do outward-oriented policies affect a nation's productivity?

Correct AnswerverifiedMost economists believe that poor nation...View AnswerShow Answer

Human capital refers to human-made capital such as tools and machinery, as opposed to natural capital such as rivers and timber.

Correct AnswerverifiedShow Answer

An increase in the rate of saving and investment permanently increases a country's rate of growth.

Correct AnswerverifiedShow Answer

Our standard of living is most closely related to

Correct AnswerverifiedShow Answer

What is the difference between human capital and technology?

Correct AnswerverifiedTechnology is society's understanding of...View AnswerShow Answer

Which of the following describes an increase in technological knowledge? A farmer:

Correct AnswerverifiedShow Answer

If 10 farmers generate €500,000 in real GDP, the output per worker would be

Correct AnswerverifiedShow Answer

Which of the following statements regarding the impact of population growth on productivity is true?

Correct AnswerverifiedShow Answer

Which of the following expenditures to enhance productivity is most likely to convey a positive externality?

Correct AnswerverifiedShow Answer

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In addition to investment in physical an...
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Correct Answer
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A production function is a mathematical ...
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Most economists believe that poor nation...
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Technology is society's understanding of...
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