Question 1

Using the notation and production function in the text,Y/L is

Accepted Answer

A)   productivity.
B)   output.
C)   the availability of natural resources.
D)   the amount of human capital.E) All of the above
F) None of the above

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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) All of the above
F) A) and B)

Question 4

Over the period 1870-2006,the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Over the period 1960-1991,

Accepted Answer

A)   South Korea had a higher growth rate than the United States because it had a higher ratio of investment to GDP.
B)   the United States had a higher growth rate than South Korea because it had a higher ratio of investment to GDP.
C)   South Korea had a higher growth rate than the United States even though it had a similar ratio of investment to GDP.
D)   the United States had a higher growth rate than South Korea even though it had a similar ratio of investment to real GDP.E) A) and B)
F) C) and D)

Question 7

Which of the following is a correct way to measure productivity?

Accepted Answer

A)   Divide the number of hours worked by the quantity of output.
B)   Divide the quantity of output by the number of hours worked.
C)   Divide the quantity of output by the quantity of physical capital.
D)   Divide the change in the quantity of output by the change in the number of hours worked.E) None of the above
F) B) and C)

Question 8

You and your friend work together for 4 hours to produce a total of 12 futons.What is productivity?

Accepted Answer

A)   12 futons
B)   24 futons
C)   3 futons per hour of labor
D)   1.5 futons per hour of laborE) B) and D)
F) A) and D)

Question 9

Figure 25-1.On the horizontal axis,K/L represents capital (K) per worker (L) .On the
vertical axis,Y/L represents output (Y) per worker (L) . 
-Refer to Figure 25-1.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Accepted Answer

A)   In the long run,a higher saving rate leads to a higher growth rate of productivity.
B)   In the long run,a higher saving rate leads to a higher growth rate of income.
C)   Returns to capital become increasingly smaller as the amount of capital per worker increases.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 10

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)   5 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller.
B)   10 percent.In less developed countries the gap between the wages of educated and uneducated workers is smaller.
C)   5 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger.
D)   10 percent.In less developed countries the gap between the wages of educated and uneducated workers is larger.E) A) and B)
F) B) and D)

Question 11

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 12

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment,poor countries tend to grow at a faster rate than rich countries.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over the last 100 or so years?

Accepted Answer

A)   Germany and Japan
B)   Indonesia and the United Kingdom
C)   the United States and Japan
D)   Mexico and PakistanE) A) and D)
F) C) and D)

Question 14

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

Accepted Answer

A)   the owner's knowledge of how to prepare vegetarian entrees
B)   the money in the owner's account at the bank from which she borrowed money
C)   the tables and chairs in the restaurant
D)   the land the restaurant was built onE) B) and C)
F) A) and B)

Question 15

Over the period 1900-2006,which of the following countries experienced the highest average annual growth rate of real GDP per person?

Accepted Answer

A)   Indonesia
B)   India
C)   Pakistan
D)   BrazilE) B) and C)
F) A) and B)

Question 16

Other things the same,an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Accepted Answer

A) True 
 B)False

Question 17

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Accepted Answer

A)   its output would stay the same and so would its productivity.
B)   its output and productivity would increase,but less than double.
C)   its output and productivity would increase by more than double.
D)   None of the above is correct.E) B) and D)
F) All of the above

Question 18

The catch-up effect can help explain

Accepted Answer

A)   the spectacular economic growth experienced by South Korea over the years 1960 to 1990.
B)   the spectacular economic growth experienced by the United States over the years 1960 to 1990.
C)   why the diminishing-returns property is no longer taken seriously by economists.
D)   why the World Bank is more inclined to encourage the flow of capital to advanced economies rather than to developing economies.E) A) and D)
F) B) and C)

Question 19

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 D)
F) A) and C)

Question 20

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Accepted Answer

A)   India
B)   Mexico
C)   Nigeria
D)   SingaporeE) A) and B)
F) B) and D)

Exam 25: Production and Growth

Which of the following pairs of countries experienced approximately the same rate of growth of real income per person over the last 100 or so years?

Correct AnswerverifiedShow Answer

Which of the following is a correct way to measure productivity?

Correct AnswerverifiedShow Answer

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Correct AnswerverifiedShow Answer

Over the period 1960-1991,

Correct AnswerverifiedShow Answer

Patents turn new ideas into

Correct AnswerverifiedShow Answer

You and your friend work together for 4 hours to produce a total of 12 futons.What is productivity?

Correct AnswerverifiedShow Answer

Figure 25-1.On the horizontal axis,K/L represents capital (K) per worker (L) .On the vertical axis,Y/L represents output (Y) per worker (L) . -Refer to Figure 25-1.The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

Correct AnswerverifiedShow Answer

Over the period 1900-2006,which of the following countries experienced the highest average annual growth rate of real GDP per person?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Correct AnswerverifiedShow Answer

Using the notation and production function in the text,Y/L is

Correct AnswerverifiedShow Answer

The catch-up effect can help explain

Correct AnswerverifiedShow Answer

The Peapod Restaurant uses all of the following to produce vegetarian meals.Which of them is an example of physical capital?

Correct AnswerverifiedShow Answer

Over the period 1870-2006,the United States experienced an average annual growth rate of real GDP per person of about 4 percent per year.

Correct AnswerverifiedShow Answer

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment,poor countries tend to grow at a faster rate than rich countries.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If an economy with constant returns to scale were to double its physical capital stock,its available natural resources,and its human capital,but leave the size of the labor force the same,

Correct AnswerverifiedShow Answer

Other things the same,an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Correct AnswerverifiedShow Answer

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