Question 1

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

Question 2

Which of the following is not correct?

Accepted Answer

A)   China allows only one child per family and couples that violate this rule are subject to substantial fines.
B)   In developed countries, population growth is consistently about 3 percent per year; in developing countries it is consistently about 5 percent per year.
C)   Educational attainment tends to be lowest in countries with the highest population growth.
D)   Economists generally believe that a country that decreases a high population growth rate can increase its economic growth rate.E) A) and B)
F) A) and C)

Question 3

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

Accepted Answer

This public policy aims to inc...

Question 4

Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will

Accepted Answer

A)   increase Italian GDP more than it increases Italian GNP.
B)   increase Italian GNP more than it increases Italian GDP.
C)   have no affect on Italian GNP, but will increase Italian GDP.
D)   have no affect on either Italian GDP or GNP.E) A) and B)
F) A) and C)

Question 5

In 1870, the richest country in the world was

Accepted Answer

A)   Germany.
B)   Japan
C)   the United Kingdom.
D)   the United States.E) A) and D)
F) A) and C)

Question 6

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Accepted Answer

A)   as the economy moves toward the long run and in the long run.
B)   as the economy moves toward the long run, but not in the long run.
C)   in the long run, but not as the economy moves toward the long run.
D)   neither as the economy moves toward the long run, nor in the long run.E) B) and C)
F) A) and B)

Question 7

In the equation for the production function H/L represents

Accepted Answer

A)   natural resources per worker.
B)   human capital per worker.
C)   output per worker.
D)   physical capital per worker.E) A) and B)
F) None of the above

Question 8

In the long run, a higher saving rate

Accepted Answer

A)   cannot increase the capital stock.
B)   increases the growth rate of income.
C)   increases the growth rate of productivity.
D)   None of the above is correct.E) All of the above
F) B) and D)

Question 9

Studies have found that there is a relationship between height and productivity. Briefly explain.

Accepted Answer

Studies show that taller worke...

Question 10

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that

Accepted Answer

A)   Sue's productivity is higher than Mary's.
B)   Mary's productivity is higher than Sue's.
C)   Sue's income per hour will be higher than Mary's.
D)   Sue's income per day will be higher than Mary's.E) A) and B)
F) All of the above

Question 11

Which of the following are human capital and physical capital, respectively?

Accepted Answer

A)   for an accounting firm: the accountants' knowledge of tax laws and computer software
B)   for a grocery store: grocery carts and shelving
C)   for a school: chalkboard and desks
D)   for a library: the building and the reference librarians' knowledge of the InternetE) B) and C)
F) A) and C)

Question 12

Suppose that over the last year the price of copper increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Accepted Answer

A)   less than inflation, and this means it became relatively less scarce.
B)   less than inflation, and this means it became scarcer.
C)   more than inflation, and this means it became scarcer.
D)   more than inflation, but this doesn't necessarily mean that it become scarcer.E) B) and D)
F) None of the above

Question 13

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 14

When a country imposes tariffs, intending to protect domestic firms from foreign competition, it is pursuing_______-oriented policies.

Accepted Answer

The answer of When a country imposes tariffs, intending to...

Question 15

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) C) and D)
F) A) and D)

Question 16

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Accepted Answer

A)   fall to less than one-half of its former value.
B)   fall, but it would still be greater than one-half of its former value.
C)   stay the same.
D)   rise but less than double.E) All of the above
F) C) and D)

Question 17

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Accepted Answer

A)   A relatively simple way to increase growth rates permanently is to increase a country's saving rate.
B)   Growth is generally inhibited rather than promoted by policies like protective tariffs.
C)   Well-established property rights that are enforced by fair and efficient courts are important to economic growth.
D)   Countries with few domestic natural resources still have opportunities for economic growth.E) None of the above
F) A) and B)

Question 18

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

Accepted Answer

A)   diminishing returns to capital so the poor country grows slower.
B)   increasing returns to capital so the poor country grows slower.
C)   diminishing returns to capital so the poor country grows faster.
D)   increasing returns to capital so the poor country grows faster.E) A) and C)
F) B) and C)

Question 19

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

Accepted Answer

Real GDP per person in 1993 wa...

Question 20

In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a

Accepted Answer

A)   public good.
B)   societal good.
C)   private good.
D)   normal good.E) B) and C)
F) None of the above

Exam 7: Production and Growth

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

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Suppose that over the last year the price of copper increased from $1.70 a pound to $1.79 per pound. Over the same time a measure of the overall price level increased from 300 to 309. The price of copper increased by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the long run, a higher saving rate

Correct AnswerverifiedShow Answer

In the equation for the production function H/L represents

Correct AnswerverifiedShow Answer

Each day Sue works 8 hours and produces 7 units of goods and services. Mary works 10 hours each day and produces 10 units of goods and services. It follows that

Correct AnswerverifiedShow Answer

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

Correct AnswerverifiedThis public policy aims to inc...View AnswerShow Answer

In 1870, the richest country in the world was

Correct AnswerverifiedShow Answer

On the basis of theory and empirical evidence, economists have reached several conclusions about economic growth. Which of the following is not one of these conclusions?

Correct AnswerverifiedShow Answer

If the number of workers in an economy doubled, all other inputs stayed the same, and there were constant returns to scale, productivity would

Correct AnswerverifiedShow Answer

Other things the same, if a country raises its saving rate, when is productivity growth higher?

Correct AnswerverifiedShow Answer

Which of the following are human capital and physical capital, respectively?

Correct AnswerverifiedShow Answer

Government corruption

Correct AnswerverifiedShow Answer

Suppose a U.S. automaker builds and operates a new factory in Italy. Future production from such an investment will

Correct AnswerverifiedShow Answer

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.

Correct AnswerverifiedReal GDP per person in 1993 wa...View AnswerShow Answer

When a country imposes tariffs, intending to protect domestic firms from foreign competition, it is pursuing_______-oriented policies.

Correct AnswerverifiedShow Answer

Studies have found that there is a relationship between height and productivity. Briefly explain.

Correct AnswerverifiedStudies show that taller worke...View AnswerShow Answer

Two countries are the same, except one is poorer. Assuming the traditional assumption about the production function is made there are

Correct AnswerverifiedShow Answer

In medieval Europe an important technological advance was the use of the padded horse collar for plowing. Once this idea was thought of, other people used it. This illustrates that knowledge is generally a

Correct AnswerverifiedShow Answer

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In addition to investment in physical an...
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This public policy aims to inc...
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Real GDP per person in 1993 wa...
View Answer

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Studies show that taller worke...
View Answer

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