Question 1

The long-run effects of an increase in the saving rate include

Accepted Answer

A)  a higher level of productivity.
B)  a higher growth rate of productivity.
C)  a higher growth rate of income.
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 2

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Accepted Answer

A)  raise productivity. Other things the same, this increase will be larger in a poor country.
B)  raise productivity. Other things the same, this increase will be larger in a rich country.
C)  reduce productivity. Other things the same, this decrease will be larger in a poor country.
D)  reduce productivity. Other things the same, this decrease will be larger in a rich country.E) A) and B)
F) C) and D)

Question 3

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Accepted Answer

A)  1.6 percent
B)  2.5 percent
C)  3.7 percent
D)  6 percentE) A) and C)
F) A) and B)

Question 4

When Americans invest in Russia, the income of Russians (that is, Russian GNP) rises by more than production in Russia (that is, Russian GDP).

Accepted Answer

A) True 
 B)False

Question 5

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A)  These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
B)  These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.
C)  These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia.
D)  These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.E) B) and C)
F) A) and B)

Question 6

Which of the following is considered human capital? Knowledge acquired from

Accepted Answer

A)  early childhood education programs
B)  job training
C)  on-the-job experience
D)  All of the above are correct.E) A) and B)
F) None of the above

Question 7

Which of the following is an example of a produced factor of production?

Accepted Answer

A)  a plant in which automobiles are assembled
B)  skills that people accumulate in high school and college
C)  skills that people accumulate through experience in the workplace
D)  All of the above are correct.E) A) and D)
F) A) and B)

Question 8

Countries that have lower levels of real GDP per person than the United States

Accepted Answer

A)  tend to have growth rates that are higher than that of the United States.
B)  tend to have growth rates that are about the same as that of the United States.
C)  tend to have growth rates that are lower than that of the United States.
D)  in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States.E) None of the above
F) C) and D)

Question 9

Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house's exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan's __________ exceeds that of Calvin.

Accepted Answer

The answer of Susan and Calvin paint houses. Susan consistently...

Question 10

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Accepted Answer

Pakistan's growth rate (1.20 p...

Question 11

Suppose a country reduces restrictions on how many hours people can work. If reducing these restrictions increase the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

Accepted Answer

A)  productivity and output both rise.
B)  productivity rises and output falls.
C)  productivity falls and output rises.
D)  productivity and output fall.E) A) and B)
F) B) and C)

Question 12

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. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Accepted Answer

A)  In the long run, a higher saving rate leads to a higher level of productivity.
B)  In the long run, a higher saving rate leads to a higher level of income.
C)  In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income.
D)  All of the above are correct.E) B) and C)
F) All of the above

Question 13

Over the period 1870-2014, the United States experienced an average annual growth rate of real GDP per person of about 1.8 percent per year.

Accepted Answer

A) True 
 B)False

Question 14

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Accepted Answer

The standard of living is a measure of h...

Question 15

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) All of the above

Question 16

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Accepted Answer

A)  foreign portfolio investment.
B)  indirect domestic investment.
C)  foreign direct investment.
D)  foreign indirect investment.E) A) and B)
F) All of the above

Question 17

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Accepted Answer

A)  8
B)  10
C)  80
D)  120E) None of the above
F) B) and C)

Question 18

Over the past century in the United States, real GDP per person has grown, on average, by about

Accepted Answer

A)  1 percent per year.
B)  2 percent per year.
C)  3 percent per year.
D)  5 percent per year.E) A) and B)
F) All of the above

Question 19

Which of the following statements is correct?

Accepted Answer

A)  In an economy-wide sense, property rights are an important prerequisite for the price system to work.
B)  Property rights give people the ability to exercise authority over the resources they own.
C)  Based on the available evidence, the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living.
D)  All of the above are correct.E) A) and B)
F) B) and C)

Question 20

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)  2 percent.
B)  5 percent.
C)  10 percent.
D)  15 percent.E) A) and B)
F) B) and D)

Exam 25: Production and Growth

Countries that have lower levels of real GDP per person than the United States

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Which of the following statements is correct?

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Which of the following is an example of a produced factor of production?

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When Americans invest in Russia, the income of Russians (that is, Russian GNP) rises by more than production in Russia (that is, Russian GDP).

Correct AnswerverifiedShow Answer

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and the standard of living mean. Make a list of things that determine labor productivity.

Correct AnswerverifiedThe standard of living is a measure of h...View AnswerShow Answer

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. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Correct AnswerverifiedShow Answer

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Correct AnswerverifiedShow Answer

Over the past century in the United States, real GDP per person has grown, on average, by about

Correct AnswerverifiedShow Answer

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Correct AnswerverifiedPakistan's growth rate (1.20 p...View AnswerShow Answer

The long-run effects of an increase in the saving rate include

Correct AnswerverifiedShow Answer

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Correct AnswerverifiedShow Answer

Over the period 1870-2014, the United States experienced an average annual growth rate of real GDP per person of about 1.8 percent per year.

Correct AnswerverifiedShow Answer

Suppose a country reduces restrictions on how many hours people can work. If reducing these restrictions increase the total number of hours worked in the economy, but all other factors that determine output are held fixed, then

Correct AnswerverifiedShow Answer

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

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The average income in a rich country

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Which of the following is considered human capital? Knowledge acquired from

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In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Correct AnswerverifiedShow Answer

Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house's exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan's __________ exceeds that of Calvin.

Correct AnswerverifiedShow Answer

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Correct AnswerverifiedShow Answer

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Correct AnswerverifiedShow Answer

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The standard of living is a measure of h...
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Pakistan's growth rate (1.20 p...
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