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

Which of the following are human capital and physical capital, respectively?

Accepted Answer

A)   for an accounting firm: the accountants' knowledge of tax laws and computer software
B)   for a grocery store: grocery carts and shelving
C)   for a school: chalkboard and desks
D)   for a library: the building and the reference librarians' knowledge of the InternetE) C) and D)
F) A) and B)

Question 3

Evidence shows that other things the same, poor countries grow

Accepted Answer

A)   faster than rich countries. However, no country that was poor in 1870 is now rich.
B)   faster than rich countries. In fact, some countries that were poor in 1870 are now rich.
C)   slower than rich countries. In fact, no country that was poor in 1870 is now rich.
D)   slower than rich countries. However, some countries that were poor in 1870 are now rich.E) None of the above
F) All of the above

Question 4

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)   12 percent
B)   10 percent
C)   4 percent
D)   2 percentE) A) and C)
F) A) and B)

Question 5

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

Accepted Answer

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

Question 6

Which of the following statements is true?

Accepted Answer

A)   Natural resources per worker influence productivity only when those natural resources are renewable.
B)   The prices of most natural resources are stable or falling relative to other prices.
C)   Technology requires greater use of natural resources.
D)   The terms human capital and technological knowledge are used interchangeably.E) A) and B)
F) A) and C)

Question 7

Which of the following is physical capital?

Accepted Answer

A)   the strength of workers
B)   the knowledge of workers
C)   financial assets like cash and bonds
D)   the equipment in a factoryE) All of the above
F) None of the above

Question 8

Which of the following is human capital?

Accepted Answer

A)   textbooks
B)   hand held power tools
C)   understanding how to repair cars
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 9

In 2009, Angel Foods produced 300,000 bags of tortilla chips, employing 12,000 hours of labor. In 2010, Angel Foods produced 325,000 bags of tortilla chips, employing 13,000 hours of labor. Angel Food's productivity

Accepted Answer

A)   decreased by 2.1 percent.
B)   was unchanged.
C)   increased by 1.3 percent.
D)   increased by 2.3 percent.E) B) and D)
F) None of the above

Question 10

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Accepted Answer

A) True 
 B)False

Question 11

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods.

Accepted Answer

A)   Workland has higher productivity and higher real GDP per person than Laborland.
B)   Workland has higher productivity but lower real GDP per person than Laborland.
C)   Workland has lower productivity but higher real GDP per person than Laborland.
D)   Workland has lower productivity and lower real GDP per person than Laborland.E) All of the above
F) A) and B)

Question 12

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company's productivity?

Accepted Answer

A)   1/8 cabinet per hour
B)   8 hours per cabinet
C)   40 cabinets
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 13

Suppose that an American opens and operates a candy factory in Finland. This is an example of

Accepted Answer

A)   foreign direct investment. American saving is used to finance Finish investment.
B)   foreign direct investment. American saving is used to finance American investment.
C)   foreign portfolio investment. American saving is used to finance Finish investment.
D)   foreign portfolio investment. American saving is used to finance American investment.E) A) and B)
F) B) and C)

Question 14

Foreign saving is used for domestic investment when foreigners engage in

Accepted Answer

A)   foreign direct investment.
B)   foreign portfolio investment.
C)   either foreign direct investment or foreign portfolio investment.
D)   None of the above is correct.E) A) and D)
F) None of the above

Question 15

Which of the following is a part of your economics professor's human capital?

Accepted Answer

A)   the things she learned at some prestigious university
B)   her copy of Mankiw's text
C)   her chalk holder
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 16

Suppose that a country increased its saving rate. In the long run it would have

Accepted Answer

A)   higher productivity, and another unit of capital would increase output by more than before.
B)   higher productivity, but another unit of capital would increase output by less than before.
C)   lower productivity, and another unit of capital would increase output by more than before.
D)   lower productivity, but another unit of capital would increase output by less than before.E) A) and D)
F) A) and C)

Question 17

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

Question 18

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

Accepted Answer

A)   the increase in output was greater for this year than last year.
B)   the increase in output was greater last year than this year.
C)   the increase in output is the same in both years.
D)   None of the above is necessarily correct.E) B) and C)
F) C) and D)

Question 19

When a society decides to increase its quantity of physical capital, the society

Accepted Answer

A)   can avoid the usual need to face trade-offs.
B)   is apparently not very concerned about its rate of economic growth in the future.
C)   is in effect deciding to consume fewer goods and services in the present.
D)   is in effect deciding to save less of its current income in the present.E) All of the above
F) B) and C)

Question 20

Which of the following will increase a country's real GDP per person?

Accepted Answer

A)   imposing restrictions on foreign trade and foreign investment
B)   imposing restrictions on foreign trade and reducing restrictions on foreign investment
C)   reducing restrictions on foreign trade and imposing restrictions on foreign investment
D)   reducing restrictions on foreign trade and foreign investmentE) B) and C)
F) C) and D)

Exam 7: Production and Growth

When a society decides to increase its quantity of physical capital, the society

Correct AnswerverifiedShow Answer

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing, the standard of living in these poor countries would likely rise.

Correct AnswerverifiedShow Answer

Which of the following will increase a country's real GDP per person?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company's productivity?

Correct AnswerverifiedShow Answer

Foreign saving is used for domestic investment when foreigners engage in

Correct AnswerverifiedShow Answer

Which of the following is a part of your economics professor's human capital?

Correct AnswerverifiedShow Answer

Suppose that an American opens and operates a candy factory in Finland. This is an example of

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year,

Correct AnswerverifiedShow Answer

Suppose that a country increased its saving rate. In the long run it would have

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is physical capital?

Correct AnswerverifiedShow Answer

Evidence shows that other things the same, poor countries grow

Correct AnswerverifiedShow Answer

In 2009, Angel Foods produced 300,000 bags of tortilla chips, employing 12,000 hours of labor. In 2010, Angel Foods produced 325,000 bags of tortilla chips, employing 13,000 hours of labor. Angel Food's productivity

Correct AnswerverifiedShow Answer

Which of the following are human capital and physical capital, respectively?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year?

Correct AnswerverifiedShow Answer

Workland has a population of 10,000, of whom 7,000 work 8 hours a day to produce a total of 224,000 final goods. Laborland has a population of 5,000, of whom 4,000 work 12 hours a day to produce a total of 120,000 final goods.

Correct AnswerverifiedShow Answer

Which of the following is human capital?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified