Exam 7: Production and Growth

Investment in both human and physical capital has opportunity costs.

Drug companies can usually obtain patents on new drugs. Which goods do patents turn new ideas into?

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Using the production function and notation in the text, what does K/L measure?

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity. Which statement best explains this hypothesis?

Which country benefitted a lot from the catch-up effect in the last half of the twentieth century?

How does income in developing countries like Pakistan and Bangladesh compare with that in Japan and Canada?

Suppose a country were to increase its saving rate. In the long run, what would also increase?

The economic development minister of a country has a list of things she thinks may explain her country's low growth of real GDP per person relative to other countries. She asks you to pick the one you think most likely explains her country's low growth. What contributes to low growth?

According to economic historian Robert Fogel, what proportion of the British population in 1780 was so malnourished that they could not perform manual labour?

In the 1800s, Europeans purchased stock in Canadian companies, which used the funds to build railroads and factories. What type of investments did the Europeans make?

Over the past century in Canada, by how much has average income grown as measured by real GDP per person?

Which statement best explains economists' understanding of the facts concerning the relationship between natural resources and economic growth?

Recently there have been violent protests against the World Bank and the World Trade Organization. The protesters argue that these institutions promote free trade and also encourage corporations in rich countries to invest in poor countries. The protesters contend that these practices make rich countries richer and poor countries poorer. How would economists feel about these protesters' views?

The productivity slowdown in 1973 appears to be primarily the result of a decrease in the capital to labour ratio.

In 2014, real GDP in Latania was $750 billion and the population was 3 million. In 2015, real GDP was $990 billion and the population was 3.3 million. What was the approximate growth rate of real GDP per person?

Cedar Valley Furniture uses 10 workers working 8 hours to produce 160 rocking chairs. What is the productivity of these workers?

Productivity can be found as number of hours worked divided by output.

Real GDP per person is $25,000 in Aquilonia, $20,000 in Nemedia, $15,000 in Shem, and $10,000 in Zexa. Saving per person is $2000 in all three countries. Other things equal, what would we expect?

Other things the same, countries with low income are likely to increase their income more by adding another unit of capital than are countries that have high income.