Question 1

As measured by real GDP per person, approximately how much higher is average income in Canada today than it was a century ago?

Accepted Answer

A)  8 times higher 
B)  10 times higher 
C)  12 times higher 
D)  14 times higher 
A)  8 times higher 
B)  10 times higher 
C)  12 times higher 
D)  14 times higher A

Question 2

Which statement illustrates an implication of investment from abroad?

Accepted Answer

A)  Foreign investment makes poor countries poorer. 
B)  Foreign investment promotes economic growth. 
C)  Foreign investment makes rich countries poorer. 
D)  Foreign investment is only beneficial to investors. 
A)  Foreign investment makes poor countries poorer. 
B)  Foreign investment promotes economic growth. 
C)  Foreign investment makes rich countries poorer. 
D)  Foreign investment is only beneficial to investors. B

Question 3

A leading environmental group recently published a report contending that humans are running a "resource deficit" because we are using natural resources faster than they can be regenerated. The group claims that this means that economic growth will eventually stop, and will even be reversed. How would an economist respond to this report?

Accepted Answer

A)  An economist would agree with the report, and would point to rising natural resource prices as evidence. 
B)  An economist would agree with the report, but wouldn't think it was important because emerging markets are likely to discover additional natural resources. 
C)  An economist would disagree with the report, in part because it ignores the mitigating effects of technological change. 
D)  An economist would disagree with the report because labour and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down. 
A)  An economist would agree with the report, and would point to rising natural resource prices as evidence. 
B)  An economist would agree with the report, but wouldn't think it was important because emerging markets are likely to discover additional natural resources. 
C)  An economist would disagree with the report, in part because it ignores the mitigating effects of technological change. 
D)  An economist would disagree with the report because labour and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down. C

Question 4

In 2014, Freedonia had a population of 2700 and real GDP of about $1,080,000. In 2013, it had a population of 2500 and real GDP of about $1,000,000. What was the approximate growth rate of real GDP per person in Freedonia between 2013 and 2014?

Accepted Answer

A)  0 percent 
B)  2.5 percent 
C)  5 percent 
D)  7.5 percent 
A)  0 percent 
B)  2.5 percent 
C)  5 percent 
D)  7.5 percent

Question 5

What type of investment has foreigners buying shares in domestic companies?

Accepted Answer

A)  foreign direct investment 
B)  foreign portfolio investment 
C)  foreign capital investment 
D)  foreign indirect investment 
A)  foreign direct investment 
B)  foreign portfolio investment 
C)  foreign capital investment 
D)  foreign indirect investment

Question 6

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 7

Based on historical data on the prices of natural resources, which statement best describes how natural resources limit economic growth?

Accepted Answer

A)  Prices have been increasing, which shows that natural resources become scarcer and this impedes growth. 
B)  Prices of natural resources have been fluctuating, which shows that there is no correlation between growth and natural resources. 
C)  Prices of natural resources have been decreasing in constant dollars, which shows that natural resources are not scarcer than they were in the past, thus economic growth is not limited by natural resources. 
D)  Prices do not show whether resources limit growth because the natural resources that economies use are not the same today as those in the past. 
A)  Prices have been increasing, which shows that natural resources become scarcer and this impedes growth. 
B)  Prices of natural resources have been fluctuating, which shows that there is no correlation between growth and natural resources. 
C)  Prices of natural resources have been decreasing in constant dollars, which shows that natural resources are not scarcer than they were in the past, thus economic growth is not limited by natural resources. 
D)  Prices do not show whether resources limit growth because the natural resources that economies use are not the same today as those in the past.

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

Senator Noitall says that in order to help poor countries develop, Canada should (1) prevent Canadian corporations from investing in poor countries because they take profits that the poor countries should have; (2) not import goods from poor countries that use child labour; (3) work to promote political stability in poor countries; and (4) reduce poor countries' reliance on market forces in their economies. Which of these ideas is likely to help poor countries grow?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 10

In approximately how many years will real GDP per person in Canada double, given its average growth rate during the past century?

Accepted Answer

A)  25 years 
B)  35 years 
C)  50 years 
D)  80 years 
A)  25 years 
B)  35 years 
C)  50 years 
D)  80 years

Question 11

From 1966 to 1973, at what rate did Canadian productivity grow?

Accepted Answer

A)  1.3 percent 
B)  1.8 percent 
C)  2.3 percent 
D)  2.5 percent 
A)  1.3 percent 
B)  1.8 percent 
C)  2.3 percent 
D)  2.5 percent

Question 12

If your Canadian-based firm opens and operates a new long board factory in Costa Rica, what type of investment is your firm engaging in?

Accepted Answer

A)  foreign portfolio investment 
B)  foreign financial investment 
C)  foreign direct investment 
D)  foreign capital investment 
A)  foreign portfolio investment 
B)  foreign financial investment 
C)  foreign direct investment 
D)  foreign capital investment

Question 13

Use the data below to find the growth of income per person (over the entire period, not an annual basis) between the two years listed.
Year Real GDP Population
1990 $5,915,600 million 240 million
2015 $10,243,800 million 295 million

Accepted Answer

Income per person in 1990 was

Question 14

What does diminishing returns to capital imply?

Accepted Answer

A)  Capital produces fewer goods as it ages. 
B)  The value of new technology decreases over time. 
C)  Increases in the capital stock eventually decrease output. 
D)  Increases in the capital stock increase output by ever smaller amounts. 
A)  Capital produces fewer goods as it ages. 
B)  The value of new technology decreases over time. 
C)  Increases in the capital stock eventually decrease output. 
D)  Increases in the capital stock increase output by ever smaller amounts.

Question 15

Tom works 6 hours a day and Jerry works 8 hours. Tom can produce 6 baskets of goods while Jerry can produce 7 baskets. What can we conclude?

Accepted Answer

A)  Tom's productivity is greater than Jerry's. 
B)  Tom's and Jerry's productivities are equal because they both work one day. 
C)  Tom's and Jerry's productivities cannot be compared. 
D)  Tom's productivity is lower than Jerry's. 
A)  Tom's productivity is greater than Jerry's. 
B)  Tom's and Jerry's productivities are equal because they both work one day. 
C)  Tom's and Jerry's productivities cannot be compared. 
D)  Tom's productivity is lower than Jerry's.

Question 16

What would we expect to happen with prices or quantities of natural resources if they were becoming scarcer?

Accepted Answer

A)  We would expect prices to be rising relative to other prices, as they have been. 
B)  We would expect prices to be rising relative to other prices, but this has not occurred. 
C)  We would expect known quantities to be increasing, as they have been. 
D)  We would expect known quantities to be falling, but this has not occurred. 
A)  We would expect prices to be rising relative to other prices, as they have been. 
B)  We would expect prices to be rising relative to other prices, but this has not occurred. 
C)  We would expect known quantities to be increasing, as they have been. 
D)  We would expect known quantities to be falling, but this has not occurred.

Question 17

Which country had the lowest growth rate over the period 1870 and 2010?

Accepted Answer

A)  United Kingdom 
B)  Germany 
C)  Canada 
D)  United States 
A)  United Kingdom 
B)  Germany 
C)  Canada 
D)  United States

Question 18

Which statement best explains the falling inflation-adjusted prices of most of the natural resources?

Accepted Answer

A)  Most are renewable; therefore, the supply of natural resources is increasing. 
B)  Our ability to conserve natural resources is increasing faster than their depletion. 
C)  The demand for natural resources is diminishing due to the discovery of new substitutes. 
D)  New deposits of natural resources have been discovered in emerging markets. 
A)  Most are renewable; therefore, the supply of natural resources is increasing. 
B)  Our ability to conserve natural resources is increasing faster than their depletion. 
C)  The demand for natural resources is diminishing due to the discovery of new substitutes. 
D)  New deposits of natural resources have been discovered in emerging markets.

Question 19

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

Accepted Answer

A)  Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C)  Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
A)  Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
B)  Kremer argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Malthus argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living. 
C)  Malthus argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Kremer argued that increasing population would outstrip agricultural production and economies will eventually decline irreversibly. 
D)  Malthus argued that increases in population would reduce the amount of human and physical capital per worker so that eventually the standard of living would decline. Kremer argued that increases in technology would allow increased output growth so that even with population growth, society would enjoy a higher standard of living.

Question 20

A country without a lot of domestic natural resources can have a high standard of living.

Accepted Answer

A) True 
 B)False

As measured by real GDP per person, approximately how much higher is average income in Canada today than it was a century ago?

Which statement illustrates an implication of investment from abroad?

In 2014, Freedonia had a population of 2700 and real GDP of about $1,080,000. In 2013, it had a population of 2500 and real GDP of about $1,000,000. What was the approximate growth rate of real GDP per person in Freedonia between 2013 and 2014?

What type of investment has foreigners buying shares in domestic companies?

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Based on historical data on the prices of natural resources, which statement best describes how natural resources limit economic growth?

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

In approximately how many years will real GDP per person in Canada double, given its average growth rate during the past century?

From 1966 to 1973, at what rate did Canadian productivity grow?

If your Canadian-based firm opens and operates a new long board factory in Costa Rica, what type of investment is your firm engaging in?

Use the data below to find the growth of income per person (over the entire period, not an annual basis) between the two years listed. Year Real GDP Population 1990 $5,915,600 million 240 million 2015 $10,243,800 million 295 million

What does diminishing returns to capital imply?

Tom works 6 hours a day and Jerry works 8 hours. Tom can produce 6 baskets of goods while Jerry can produce 7 baskets. What can we conclude?

What would we expect to happen with prices or quantities of natural resources if they were becoming scarcer?

Which country had the lowest growth rate over the period 1870 and 2010?

Which statement best explains the falling inflation-adjusted prices of most of the natural resources?

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

A country without a lot of domestic natural resources can have a high standard of living.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters

Exam 7: Production and Growth

As measured by real GDP per person, approximately how much higher is average income in Canada today than it was a century ago?

Which statement illustrates an implication of investment from abroad?

In 2014, Freedonia had a population of 2700 and real GDP of about $1,080,000. In 2013, it had a population of 2500 and real GDP of about $1,000,000. What was the approximate growth rate of real GDP per person in Freedonia between 2013 and 2014?

What type of investment has foreigners buying shares in domestic companies?

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Based on historical data on the prices of natural resources, which statement best describes how natural resources limit economic growth?

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

In approximately how many years will real GDP per person in Canada double, given its average growth rate during the past century?

From 1966 to 1973, at what rate did Canadian productivity grow?

If your Canadian-based firm opens and operates a new long board factory in Costa Rica, what type of investment is your firm engaging in?

Use the data below to find the growth of income per person (over the entire period, not an annual basis) between the two years listed. Year Real GDP Population 1990 $5,915,600 million 240 million 2015 $10,243,800 million 295 million

What does diminishing returns to capital imply?

Tom works 6 hours a day and Jerry works 8 hours. Tom can produce 6 baskets of goods while Jerry can produce 7 baskets. What can we conclude?

What would we expect to happen with prices or quantities of natural resources if they were becoming scarcer?

Which country had the lowest growth rate over the period 1870 and 2010?

Which statement best explains the falling inflation-adjusted prices of most of the natural resources?

What is the key difference between Thomas Malthus and Michael Kremer's theories about population growth?

A country without a lot of domestic natural resources can have a high standard of living.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters