Question 1

Productivity

Accepted Answer

A)   is nearly the same across countries,and so provides no help explaining differences in the standard of living across countries.
B)   explains very little of the differences in the standard of living across countries.
C)   explains some,but not most of the differences in the standard of living across countries.
D)   explains most of the differences in the standard of living across countries.E) B) and C)
F) A) and D)

Question 2

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is consistent with the catch-up effect?

Accepted Answer

A)   The United States had a higher growth rate before 1900 than after.
B)   After World War II the United States had lower growth rates than war-ravaged European countries.
C)   Although the United States has a relatively high level of output per person,its growth rate is rather modest compared to some countries.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 4

Which of the following is a good gauge of economic progress?

Accepted Answer

A)   the level of real GDP per person,but not the growth rate of real GDP per person
B)   the level of real GDP per person and the growth rate of real GDP per person
C)   the growth rate of real GDP per person,but not the level of real GDP per person
D)   neither the level nor the growth rate of real GDP per personE) A) and B)
F) All of the above

Question 5

The traditional view of the production process is that capital is subject to

Accepted Answer

A)   constant returns.
B)   increasing returns.
C)   diminishing returns.
D)   diminishing returns for low levels of capital,and increasing returns for high levels of capital.E) A) and B)
F) A) and C)

Question 6

Which of the following is true?

Accepted Answer

A)   Kremer argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Malthus argued that increasing population would outstrip agricultural production.
B)   Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Malthus argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living.
C)   Malthus argued that with greater population,society would generate more ideas so that growth of real GDP per person could continue.Kremer argued that increasing population would outstrip agricultural production.
D)   Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline.Kremer argued that increases in technology would allow increased output growth so that even with population growth,society would enjoy a higher standard of living.E) B) and C)
F) All of the above

Question 7

In the country of Suchnott,the price of silver increased from $30 per ounce to $32 per ounce during a time when the overall price level increased by 5 percent.During this period,the real price of silver

Accepted Answer

A)   increased.
B)   decreased.
C)   stayed the same.
D)   might have increased,decreased or stayed the same; more information is needed to be sure.E) A) and B)
F) A) and C)

Question 8

According to studies using international data,an increase in the saving rate

Accepted Answer

A)   does not increase the growth rate of output.
B)   increases the growth rate of output for a few years.
C)   increases the growth rate of output for about a decade.
D)   increases the growth rate of output for several decades.E) None of the above
F) A) and D)

Question 9

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 10

During the past century the average growth rate of U.S.real GDP per person implies that it doubled,on average,about every

Accepted Answer

A)   100 years.
B)   70 years.
C)   35 years.
D)   25 years.E) A) and B)
F) B) and C)

Question 11

Suppose a person receives an education in her home country.Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Accepted Answer

A)   externalities and brain drain
B)   externalities but not brain drain
C)   brain drain but not externalities
D)   neither externalities nor brain drainE) B) and D)
F) A) and B)

Question 12

Which of the following countries achieved higher economic growth,in part by mandating a reduction in population growth?

Accepted Answer

A)   Great Britain
B)   China
C)   Australia
D)   FranceE) None of the above
F) All of the above

Question 13

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) A) and B)
F) B) and C)

Question 14

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) B) and C)
F) A) and B)

Question 15

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

Accepted Answer

Once someone comes up with an idea it is...

Question 16

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth.The first is to increase barriers to trade.The second is to restrict foreign portfolio investment.Which of these policies would most economist think would promote growth?

Accepted Answer

A)   both the first and the second
B)   the first but not the second
C)   the second but not the first
D)   neither the first nor the secondE) A) and C)
F) B) and C)

Question 17

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs.The growth that arises from capital accumulation is not a free lunch.It requires that society

Accepted Answer

A)   conserve resources for future generations.
B)   sacrifice consumption goods and services now in order to enjoy more consumption in the future.
C)   recycle resources so that future generations can produce goods and services with the accumulated capital.
D)   None of the above is correct.E) All of the above
F) B) and C)

Question 18

Nathan owns a coffee kiosk.All of his employees work 8 hours per day.In 2009,he employed 5 people who produced a total of 900 cups of coffee each day.In 2010,he hired a sixth employee and production increased to 1188 cups of coffee each day.In Nathan's kiosk,productivity

Accepted Answer

A)   decreased by 2 percent.
B)   increased by 9 percent.
C)   increased by 10 percent.
D)   increased by 1.11 percent.E) C) and D)
F) None of the above

Question 19

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

Question 20

Countries that pursued outward-oriented policies in the 20th century

Accepted Answer

A)   experienced lower rates of economic growth than did countries that pursued inward-oriented policies.
B)   experienced higher levels of political instability than did countries that pursued inward-oriented policies.
C)   include Singapore,South Korea,and Taiwan.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Exam 17: Production and Growth

According to studies using international data,an increase in the saving rate

Correct AnswerverifiedShow Answer

The traditional view of the production process is that capital is subject to

Correct AnswerverifiedShow Answer

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct AnswerverifiedShow Answer

Which of the following is consistent with the catch-up effect?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

Correct AnswerverifiedOnce someone comes up with an idea it is...View AnswerShow Answer

Which of the following is a good gauge of economic progress?

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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

Nathan owns a coffee kiosk.All of his employees work 8 hours per day.In 2009,he employed 5 people who produced a total of 900 cups of coffee each day.In 2010,he hired a sixth employee and production increased to 1188 cups of coffee each day.In Nathan's kiosk,productivity

Correct AnswerverifiedShow Answer

During the past century the average growth rate of U.S.real GDP per person implies that it doubled,on average,about every

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose a person receives an education in her home country.Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Correct AnswerverifiedShow Answer

In the long run,a higher saving rate

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Countries that pursued outward-oriented policies in the 20th century

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Which of the following is true?

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Productivity

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In the country of Suchnott,the price of silver increased from $30 per ounce to $32 per ounce during a time when the overall price level increased by 5 percent.During this period,the real price of silver

Correct AnswerverifiedShow Answer

One of the Ten Principles of Economics in Chapter 1 is that people face tradeoffs.The growth that arises from capital accumulation is not a free lunch.It requires that society

Correct AnswerverifiedShow Answer

Which of the following countries achieved higher economic growth,in part by mandating a reduction in population growth?

Correct AnswerverifiedShow Answer

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth.The first is to increase barriers to trade.The second is to restrict foreign portfolio investment.Which of these policies would most economist think would promote growth?

Correct AnswerverifiedShow Answer

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Once someone comes up with an idea it is...
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