Question 1

Inward-oriented policies

Accepted Answer

A)  include imposing tariffs and other trade restrictions.
B)  have generally increased productivity and growth in the countries that pursued them.
C)  promote the production of goods and services that the country produces most efficiently.
D)  All of the above are correct.E) A) and C)
F) B) and C)

Question 2

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 3

Which of the following can be measured by the level of real GDP per person?

Accepted Answer

A)  productivity and the standard of living
B)  productivity but not the standard of living
C)  the standard of living but not productivy
D)  neither the standard of living nor productivityE) None of the above
F) B) and D)

Question 4

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units.This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units.This country's productivity was

Accepted Answer

A)  higher this year than last year.A possible source of this change in productivity is a change in the size of the capital stock.
B)  higher this year than last year.A change in the size of the capital stock does not affect productivity.
C)  lower this year than last year.A possible source of this change in productivity is a change in the size of the capital stock.
D)  lower this year than last year.A change in the size of the capital stock does not affect productivity.E) None of the above
F) All of the above

Question 5

Real GDP per person in rich countries,such as Germany,is sometimes more than 10 times that of poor countries like India.

Accepted Answer

A) True 
 B)False

Question 6

Suppose that a country increased its saving rate.In the long run it would have

Accepted Answer

A)  higher productivity,and another unit of capital would increase output by more than before.
B)  higher productivity,but another unit of capital would increase output by less than before.
C)  lower productivity,and another unit of capital would increase output by more than before.
D)  lower productivity,but another unit of capital would increase output by less than before.E) None of the above
F) A) and B)

Question 7

Which of the following statements is true?

Accepted Answer

A)  Natural resources per worker influence productivity only when those natural resources are renewable.
B)  The prices of most natural resources are stable or falling relative to other prices.
C)  Technology requires greater use of natural resources.
D)  The terms human capital and technological knowledge are used interchangeably.E) C) and D)
F) A) and B)

Question 8

The catch-up effect refers to the idea that poor countries,despite their best efforts,are not likely ever to experience the economic growth rates of wealthier countries.

Accepted Answer

A) True 
 B)False

Question 9

Suppose that real GDP grew more in Country A than in Country B last year.

Accepted Answer

A)  Country A must have a higher standard of living than country B.
B)  Country A's productivity must have grown faster than country B's.
C)  Both of the above are correct.
D)  None of the above are correct.E) A) and B)
F) B) and C)

Question 10

The average citizen of India in 2008 had

Accepted Answer

A)  less real income than the typical resident of Canda in 1870.
B)  less real income than the typical resident of the United Kingdom in 1870.
C)  higher real income than a resident of Japan in 2008.
D)  higher real income than a resident of China in 2008.E) All of the above
F) A) and B)

Question 11

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.E) A) and B)
F) None of the above

Question 12

Which of the following is correct?

Accepted Answer

A)  Although levels of real GDP per person vary substantially from country to country,the growth rate of real GDP per person is similar across countries.
B)  Productivity is not closely linked to government policies.
C)  The level of real GDP per person is a good gauge of economic prosperity,and the growth rate of real GDP per person is a good gauge of economic progress.
D)  Productivity may be measured by the growth rate of real GDP per person.E) B) and C)
F) A) and D)

Question 13

Which of the following is correct?

Accepted Answer

A)  Countries with the highest growth rates over the last 100 years are the ones that had the highest level of real GDP 100 years ago.
B)  Most countries have had little fluctuation around their average growth rates during the past 100 years.
C)  The ranking of countries by income changes substantially over time.
D)  Over the last 100 years,Japan had the highest real GDP growth rate,and now has the highest real GDP per person.E) C) and D)
F) A) and D)

Question 14

Foreign saving is used for domestic investment when foreigners engage in

Accepted Answer

A)  foreign direct investment.
B)  foreign portfolio investment.
C)  either foreign direct investment or foreign portfolio investment.
D)  None of the above is correct.E) B) and C)
F) A) and D)

Question 15

If companies from foreign countries build and operate factories in China,then China's productivity

Accepted Answer

A)  and the wages of Chinese workers increase.
B)  increases but the wages of Chinese workers decrease.
C)  decreases but the wages of Chinese workers increase.
D)  and the wages of Chinese workers decrease.E) C) and D)
F) None of the above

Question 16

Other things the same,when an economy increases its saving rate

Accepted Answer

A)  consumption and production rise now.
B)  consumption rises now and production rises later
C)  consumption falls now and production rises later.
D)  consumption falls now and production falls later.E) A) and C)
F) None of the above

Question 17

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Accepted Answer

A) True 
 B)False

Question 18

Industrial machinery is an example of

Accepted Answer

A)  a factor of production that in the past was an output from the production process.
B)  technological knowledge.
C)  a production function.
D)  an item which always has the property called constant returns to scale.E) None of the above
F) A) and B)

Question 19

Petroleum is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 20

"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 the traditional view of the production process.
B)  is an assertion that capital is subject to diminishing 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) A) and B)
F) None of the above

Exam 25: Production and Growth

Suppose that a country increased its saving rate.In the long run it would have

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Suppose that real GDP grew more in Country A than in Country B last year.

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Inward-oriented policies

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Which of the following is correct?

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The catch-up effect refers to the idea that poor countries,despite their best efforts,are not likely ever to experience the economic growth rates of wealthier countries.

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Which of the following statements is true?

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The average citizen of India in 2008 had

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Which of the following is correct?

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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.

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Real GDP per person in rich countries,such as Germany,is sometimes more than 10 times that of poor countries like India.

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Petroleum is an example of a nonrenewable resource.

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International data on real GDP per person gives us a sense of how standards of living vary across countries.

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Other things the same,when an economy increases its saving rate

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If companies from foreign countries build and operate factories in China,then China's productivity

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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

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Industrial machinery is an example of

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Which of the following can be measured by the level of real GDP per person?

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Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units.This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units.This country's productivity was

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

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Foreign saving is used for domestic investment when foreigners engage in

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