Question 1

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were 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 2

All else equal, which of the following would tend to cause real GDP per person to rise?

Accepted Answer

A)   a change from inward-oriented policies to outward-oriented policies
B)   an increase in investment in human capital
C)   strengthening of property rights.
D)   All of the above are correct.E) A) and B)
F) A) and D)

Question 3

What is the distinction between foreign direct investment and foreign portfolio investment?

Accepted Answer

A capital investment that is owned and o...

Question 4

Average income has been stagnant for many years in

Accepted Answer

A)   Western European counties.
B)   some Asian countries like South Korea and Singapore.
C)   some Sub-Saharan African countries.
D)   All of the above are correct.E) All of the above
F) C) and D)

Question 5

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Accepted Answer

A)   private goods and increasing the incentive to engage in research.
B)   private goods but decreasing the incentive to engage in research.
C)   public goods and increasing the incentive to engage in research.
D)   public goods but decreasing the incentive to engage in research.E) A) and D)
F) A) and C)

Question 6

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N) .
-Refer to Scenario 25-1. In the production function, which of the following represents technology?

Accepted Answer

A)   A
B)   K
C)   H
D)   NE) A) and C)
F) B) and C)

Question 7

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 D)
F) B) and D)

Question 8

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Accepted Answer

A)   have no impact on the growth rate of real GDP per person.
B)   decrease the growth of real GDP per person for a few years.
C)   increase the growth of real GDP per person for several decades.
D)   permanently increase the growth rate of real GDP per person.E) C) and D)
F) None of the above

Question 9

Janet is a farmer. Which of the following are included in her human capital?

Accepted Answer

A)   her tractor and what she's learned from experience
B)   her tractor but not what she's learned from experience
C)   what she's learned from experience but not her tractor
D)   neither her tractor nor what she's learned from experienceE) A) and B)
F) A) and C)

Question 10

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)   10 percent
B)   14 percent
C)   17 percent
D)   21 percentE) B) and C)
F) C) and D)

Question 11

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 12

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

Question 13

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Accepted Answer

A)   Canada and China
B)   China and India
C)   Germany and India
D)   Germany and PakistanE) All of the above
F) C) and D)

Question 14

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Accepted Answer

A)   the production process cannot be enhanced by technological advances.
B)   no mathematical representation of the relevant production function can be formulated.
C)   the relevant production function has the limits-to-growth property.
D)   the relevant production function has the constant-returns-to-scale property.E) C) and D)
F) All of the above

Question 15

Patents turn new ideas into

Accepted Answer

A)   public goods, and increase the incentive to engage in research.
B)   public goods, but decrease the incentive to engage in research.
C)   private goods, and increase the incentive to engage in research.
D)   private goods, but decrease the incentive to engage in research.E) A) and D)
F) B) and C)

Question 16

Investment in human capital has opportunity costs, but investment in physical capital does not.

Accepted Answer

A) True 
 B)False

Question 17

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment will

Accepted Answer

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

Question 18

Which of the following provide benefits to society at large and not just to the person(s)  who pursues it?

Accepted Answer

A)   both technological knowledge that is a public good and education
B)   technological knowledge that is a public good, but not education
C)   education, but not technological knowledge that is a public good
D)   neither education, nor technological knowledge that is a public goodE) A) and B)
F) B) and C)

Question 19

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)   both the demand for the resource and the supply of the resource have increased
B)   both the demand for the resource and the supply of the resource have decreased
C)   demand for the resource is unchanged and the supply of the resource has increased
D)   the demand for the resource has decreased and the supply of the resource is unchangedE) A) and C)
F) A) and D)

Question 20

Suppose Turkey increases its saving rate. In the long run

Accepted Answer

A)   the growth rates of productivity and real GDP per person increase.
B)   productivity and real GDP per person increase.
C)   the growth rate of productivity increases, and real GDP per person increases.
D)   productivity increases, and the growth rate of real GDP per person increases.E) B) and C)
F) A) and B)

Exam 25: Production and Growth

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Correct AnswerverifiedShow Answer

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Correct AnswerverifiedShow Answer

All else equal, which of the following would tend to cause real GDP per person to rise?

Correct AnswerverifiedShow Answer

Average income has been stagnant for many years in

Correct AnswerverifiedShow Answer

Inventors often obtain patents on new products and processes, thereby turning new ideas into

Correct AnswerverifiedShow Answer

Investment in human capital has opportunity costs, but investment in physical capital does not.

Correct AnswerverifiedShow Answer

In which of the following cases can we be certain that a natural resource has become scarcer?

Correct AnswerverifiedShow Answer

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment will

Correct AnswerverifiedShow Answer

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

Correct AnswerverifiedShow Answer

Government corruption

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

What is the distinction between foreign direct investment and foreign portfolio investment?

Correct AnswerverifiedA capital investment that is owned and o...View AnswerShow Answer

Janet is a farmer. Which of the following are included in her human capital?

Correct AnswerverifiedShow Answer

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

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in

Correct AnswerverifiedShow Answer

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely

Correct AnswerverifiedShow Answer

Patents turn new ideas into

Correct AnswerverifiedShow Answer

Suppose Turkey increases its saving rate. In the long run

Correct AnswerverifiedShow Answer

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N) . -Refer to Scenario 25-1. In the production function, which of the following represents technology?

Correct AnswerverifiedShow Answer

Which of these countries' growth rates of real GDP per person have exceeded the United States' growth rate of real GDP per person over the last century?

Correct AnswerverifiedShow Answer

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A capital investment that is owned and o...
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In the long run, a higher savi...
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