Question 1

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Accepted Answer

A)   both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital.
B)   both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital.
C)   both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital.
D)   both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.E) A) and B)
F) C) and D)

Question 2

An increase in the saving rate would, other things the same,

Accepted Answer

A)   increase growth more for a poor country than for a rich country, and raise growth permanently.
B)   increase growth more for a poor country than for a rich country, but raise growth temporarily.
C)   increase growth more for a rich country than for a poor country, and raise growth permanently.
D)   increase growth more for a rich country than for a poor country, but raise growth temporarily.E) B) and D)
F) None of the above

Question 3

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Accepted Answer

A)   reduce real GDP per person and productivity.
B)   reduce real GDP per person but not productivity.
C)   reduce productivity but not real GDP per person.
D)   None of the above is correct.E) A) and C)
F) A) and D)

Question 4

A certain production process requires only two types of inputs - capital and labor. In 2006, 100 units of labor and 50 units of capital were employed, and 100 units of output were produced. In 2013, 112 units of labor and 56 units of capital were employed. If the production process displays constant returns to scale, then how many units of output were produced in 2013?

Accepted Answer

A)   100
B)   112
C)   124
D)   144E) A) and C)
F) B) and C)

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

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Accepted Answer

A)   pursues inward-oriented policies.
B)   has natural seaports.
C)   minimizes the role of the courts in its economy.
D)   enacts policies to encourage consumption and discourage saving.E) A) and B)
F) All of the above

Question 7

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Accepted Answer

A)   some of the income from the factory accrues to people who do not live in Algeria.
B)   gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad.
C)   all of the income from the factory is included in Algeria's GDP.
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an example of a renewable natural resource?

Accepted Answer

A)   fish
B)   soybeans
C)   wood
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 11

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

Accepted Answer

Inward­oriented policies are i...

Question 12

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 13

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)   education
B)   research and development
C)   nutrition
D)   trade restrictionsE) B) and C)
F) A) and D)

Question 14

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

Question 15

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Accepted Answer

A)   exceptionally high.
B)   moderately high.
C)   moderately low.
D)   exceptionally low.E) None of the above
F) B) and D)

Question 16

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Accepted Answer

A)   160
B)   56
C)   8
D)   None of the above is correct.E) A) and C)
F) None of the above

Question 17

The population growth rate tends to be higher in developed countries than in developing countries.

Accepted Answer

A) True 
 B)False

Question 18

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Accepted Answer

A)   1.5 percent per year.
B)   2.0 percent per year.
C)   2.5 percent per year.
D)   3.0 percent per year.E) A) and C)
F) C) and D)

Question 19

Which of the following is an example of a nonrenewable resource?

Accepted Answer

A)   corn
B)   oil
C)   livestock
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 20

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce 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) C) and D)
F) B) and D)

Exam 12: Production and Growth

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Correct Answer
verified

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

Correct Answer
verified
Inwardoriented policies are i...
View Answer

Which of the following is an example of a nonrenewable resource?

Correct Answer
verified

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Correct Answer
verified

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

Correct Answer
verified

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

Correct Answer
verified

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct Answer
verified

An increase in the saving rate would, other things the same,

Correct Answer
verified

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 Answer
verified
The standard of living is a measure of h...
View Answer

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct Answer
verified

Which of the following is an example of a renewable natural resource?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The population growth rate tends to be higher in developed countries than in developing countries.

Correct Answer
verified

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Correct Answer
verified

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Correct Answer
verified

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Correct Answer
verified

Exam 12: Production and Growth

Greg's Ice Cream produces 1120 gallons of ice cream per day. Each employed works seven hours and has productivity of 20 gallons an hour. How many employees does Greg's employ?

Correct AnswerverifiedShow Answer

Country A experienced a growth rate of real GDP per person of 2.5 percent per year throughout the 1900's. In view of other countries' experiences during this time country A's growth was

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

Correct AnswerverifiedInward­oriented policies are i...View AnswerShow Answer

Which of the following is an example of a nonrenewable resource?

Correct AnswerverifiedShow Answer

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. In the long run

Correct AnswerverifiedShow Answer

Other things equal, the likelihood that a country will experience a relatively-high level of income is greater if the country

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

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct AnswerverifiedShow Answer

An increase in the saving rate would, other things the same,

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

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct AnswerverifiedShow Answer

Which of the following is an example of a renewable natural resource?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The population growth rate tends to be higher in developed countries than in developing countries.

Correct AnswerverifiedShow Answer

The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because

Correct AnswerverifiedShow Answer

Countries that grew the fastest over the last 100 or so years had average growth rates of real income per person of about

Correct AnswerverifiedShow Answer

If Country A produces 7,000 units of goods and services using 700 hours of labor, and if Country B produces 5,500 units of goods and services using 500 units of labor, then productivity is lower in Country A than in Country B.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
Inwardoriented policies are i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The standard of living is a measure of h...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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