Question 1

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 2

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) None of the above
F) A) and C)

Question 3

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Accepted Answer

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

Question 4

In recent decades, economic growth has been much more rapid in South Korea than in the United States. What is the likely explanation for this fact?

Accepted Answer

The likely explanati...

Question 5

If a country's saving rate increases, then in the long run

Accepted Answer

A)   productivity is higher but real GDP per person is not higher.
B)   real GDP per person is higher but productivity is not higher.
C)   productivity and real GDP per person are both higher.
D)   neither productivity nor real GDP per person is higher.E) A) and C)
F) All of the above

Question 6

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Accepted Answer

A)   in the short run, but not in the long run.
B)   in the long run, but not in the short run.
C)   in both the short run and the long run.
D)   in neither the short run nor the long run.E) B) and D)
F) B) and C)

Question 7

The average income in a rich country, such as the United States or Japan, is more than

Accepted Answer

A)   3 times, but less than 5 times, the average income in a poor country, such as Indonesia or Nigeria.
B)   5 times, but less than 10 times, the average income in a poor country, such as Indonesia or Nigeria.
C)   10 times, but less than 20 times, the average income in a poor country, such as Indonesia or Nigeria.
D)   more than 20 times the average income in a poor country, such as Indonesia or Nigeria.E) A) and B)
F) B) and D)

Question 8

What are the long-run effects on productivity and income of an increase in the saving rate?

Accepted Answer

In the long run, a higher savi...

Question 9

If an American-based firm opens and operates a factory in China, then it is engaging in

Accepted Answer

A)   foreign portfolio investment.
B)   foreign financial investment.
C)   foreign direct investment.
D)   indirect foreign investment.E) B) and D)
F) B) and C)

Question 10

If a country were to increase its saving rate, then in the long run it would also increase its

Accepted Answer

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

Question 11

Like physical capital, human capital is a produced factor of production.

Accepted Answer

A) True 
 B)False

Question 12

How would an economist typically assess the extent of economic progress in a nation?

Accepted Answer

An economist typical...

Question 13

Which of the following is not correct?

Accepted Answer

A)   Countries that have had higher output growth per person have typically done so without higher productivity growth.
B)   A country's standard of living and its productivity are closely related.
C)   Productivity refers to output produced per hour of work.
D)   Increases in productivity can be used to increase output or leisure.E) B) and C)
F) A) and D)

Question 14

An increase in the saving rate permanently increases the growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 15

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

Question 16

If a country increases its saving rate, which of the following permanently grow at a higher rate?

Accepted Answer

A)   productivity and real GDP per person
B)   productivity but not real GDP per person
C)   real GDP per person but not productivity
D)   neither real GDP per person nor productivityE) B) and C)
F) C) and D)

Question 17

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) All of the above

Question 18

Which of the following correctly ranks the three countries, from highest to lowest, for percentage of high-school age children in school?

Accepted Answer

A)   United Kingdom, Mali, Mexico.
B)   Mexico, Mali, United Kingdom.
C)   United Kingdom, Mexico, Mali.
D)   Mali, Mexico, United Kingdom.E) C) and D)
F) B) and C)

Question 19

Real Foods produced 400,000 cans of diced tomatoes last year and 460,000 cans of diced tomatoes this year. It employed the same number of labor hours each year. Real Foods' productivity

Accepted Answer

A)   decreased 13%.
B)   was unchanged.
C)   increased 13%.
D)   increased 15%.E) None of the above
F) B) and C)

Question 20

Consider the production function Y=2FL,K,H,N). Suppose F12,10,9,7)=100 and F24,20,18,14)=180. Does the production function have the property of constant returns to scale? Why or why not?

Accepted Answer

No, the production function does not hav...

Exam 17: Production and Growth

What are the long-run effects on productivity and income of an increase in the saving rate?

Correct AnswerverifiedIn the long run, a higher savi...View AnswerShow Answer

The average income in a rich country, such as the United States or Japan, is more than

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

How would an economist typically assess the extent of economic progress in a nation?

Correct AnswerverifiedAn economist typical...View AnswerShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Correct AnswerverifiedShow Answer

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Correct AnswerverifiedShow Answer

Consider the production function Y=2FL,K,H,N). Suppose F12,10,9,7)=100 and F24,20,18,14)=180. Does the production function have the property of constant returns to scale? Why or why not?

Correct AnswerverifiedNo, the production function does not hav...View AnswerShow Answer

In recent decades, economic growth has been much more rapid in South Korea than in the United States. What is the likely explanation for this fact?

Correct AnswerverifiedThe likely explanati...View AnswerShow Answer

Which of the following correctly ranks the three countries, from highest to lowest, for percentage of high-school age children in school?

Correct AnswerverifiedShow Answer

If a country increases its saving rate, which of the following permanently grow at a higher rate?

Correct AnswerverifiedShow Answer

An increase in the saving rate permanently increases the growth rate of real GDP per person.

Correct AnswerverifiedShow Answer

Like physical capital, human capital is a produced factor of production.

Correct AnswerverifiedShow Answer

In the 19th century John Deere took out a patent on a newly designed plow that incorporated steel to make plowing faster. Many farmers bought plows from his company and he made millions. This example shows that patents turn an idea into a

Correct AnswerverifiedShow Answer

If a country's saving rate increases, then in the long run

Correct AnswerverifiedShow Answer

If an American-based firm opens and operates a factory in China, then it is engaging in

Correct AnswerverifiedShow Answer

If a country were to increase its saving rate, then in the long run it would also increase its

Correct AnswerverifiedShow Answer

Real Foods produced 400,000 cans of diced tomatoes last year and 460,000 cans of diced tomatoes this year. It employed the same number of labor hours each year. Real Foods' productivity

Correct AnswerverifiedShow Answer

Correct Answer
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In the long run, a higher savi...
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An economist typical...
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Correct Answer
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No, the production function does not hav...
View Answer

Correct Answer
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The likely explanati...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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