Question 1

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

Accepted Answer

A) True 
 B)False

Question 2

In what sense is it likely that geography has an effect on a country's rate of economic growth?

Accepted Answer

Countries with natural seaport...

Question 3

Although growth rates across countries vary some, rankings of countries by income remain pretty much the same over time.

Accepted Answer

A) True 
 B)False

Question 4

​Income rises after a charity gives poor families free livestock. The harvest that year was also particularly bountiful. The charity should take full credit for the observed increase in the standard of living.

Accepted Answer

A) True 
 B)False

Question 5

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 6

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Accepted Answer

A) True 
 B)False

Question 7

Why does a nation's standard of living depend on property rights?

Accepted Answer

Property rights are an important prerequ...

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

Accepted Answer

When an economy initially has a small am...

Question 10

Country Y has a population of 1,600, of whom 400 work 6 hours a day to make 119,000 final goods. Country Z has a population of 2,500, of whom 2,000 work 4 hours a day to make 654,500 final goods.

Accepted Answer

A)  Country Y has higher productivity and higher real GDP per person than country Z.
B)  Country Y has lower productivity but higher real GDP per person than country Z.
C)  Country Y has higher productivity but lower real GDP per person than country Z.
D)  Country Y has lower productivity and lower real GDP per person than country Z.E) B) and C)
F) None of the above

Question 11

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

Accepted Answer

A)  diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
B)  diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.
C)  increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.
D)  increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries.E) None of the above
F) B) and D)

Question 12

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Question 13

Last year real GDP per person in the imaginary nation of Davisland was $4,310. The year before it was $4,200. By about what percentage did real GDP per person grow during the period?

Accepted Answer

A)  11 percent
B)  0.03 percent
C)  3 percent
D)  1 percentE) None of the above
F) C) and D)

Question 14

One variable responsible for most significant explanation of variations in living standards around the world is

Accepted Answer

A)  productivity.
B)  population.
C)  preferences.
D)  prices.E) B) and D)
F) A) and B)

Question 15

In the United States in 2014 real GDP per person was about $56,000, while in some poor countries real GDP per person was less than $5,000.

Accepted Answer

A) True 
 B)False

Question 16

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Accepted Answer

A) True 
 B)False

Question 17

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Accepted Answer

Both physical capita...

Question 18

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Accepted Answer

A) True 
 B)False

Question 19

List the four determinants of an economy's productivity.

Accepted Answer

The four determinants are phys...

Question 20

Last year real GDP in the imaginary nation of Nylon was 435.0 billion and the population was 2.6 million. The year before, real GDP was 380.0 billion and the population was 2.3 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)  14.5 percent
B)  0.01 percent
C)  1.01 percent
D)  1.3 percentE) A) and B)
F) A) and C)

Exam 25: Production and Growth

​Income rises after a charity gives poor families free livestock. The harvest that year was also particularly bountiful. The charity should take full credit for the observed increase in the standard of living.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Although growth rates across countries vary some, rankings of countries by income remain pretty much the same over time.

Correct AnswerverifiedShow Answer

One variable responsible for most significant explanation of variations in living standards around the world is

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

List the four determinants of an economy's productivity.

Correct AnswerverifiedThe four determinants are phys...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

Correct AnswerverifiedShow Answer

Last year real GDP per person in the imaginary nation of Davisland was $4,310. The year before it was $4,200. By about what percentage did real GDP per person grow during the period?

Correct AnswerverifiedShow Answer

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Correct AnswerverifiedShow Answer

Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies.

Correct AnswerverifiedShow Answer

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Correct AnswerverifiedShow Answer

In the United States in 2014 real GDP per person was about $56,000, while in some poor countries real GDP per person was less than $5,000.

Correct AnswerverifiedShow Answer

Country Y has a population of 1,600, of whom 400 work 6 hours a day to make 119,000 final goods. Country Z has a population of 2,500, of whom 2,000 work 4 hours a day to make 654,500 final goods.

Correct AnswerverifiedShow Answer

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Correct AnswerverifiedShow Answer

Is physical capital a produced factor of production? Is human capital a produced factor of production?

Correct AnswerverifiedBoth physical capita...View AnswerShow Answer

In what sense is it likely that geography has an effect on a country's rate of economic growth?

Correct AnswerverifiedCountries with natural seaport...View AnswerShow Answer

Last year real GDP in the imaginary nation of Nylon was 435.0 billion and the population was 2.6 million. The year before, real GDP was 380.0 billion and the population was 2.3 million. What was the growth rate of real GDP per person during the year?

Correct AnswerverifiedShow Answer

How does the phenomenon of diminishing returns to capital explain the catch-up effect?

Correct AnswerverifiedWhen an economy initially has a small am...View AnswerShow Answer

Why does a nation's standard of living depend on property rights?

Correct AnswerverifiedProperty rights are an important prerequ...View AnswerShow Answer

Income rises after a charity gives poor families free livestock. The harvest that year was also particularly bountiful. The charity should take full credit for the observed increase in the standard of living.

Correct Answer
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Correct Answer
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Correct Answer
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The four determinants are phys...
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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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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Both physical capita...
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Correct Answer
verified
Countries with natural seaport...
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Correct Answer
verified

Correct Answer
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When an economy initially has a small am...
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Correct Answer
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Property rights are an important prerequ...
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