Question 1

Which of the following is considered human capital? Knowledge acquired from

Accepted Answer

A) early childhood education programs 
B) job training 
C) on-the-job experience 
D) All of the above are correct.

Question 2

Last year real GDP per person in the imaginary nation of Olympus was 4,250. The year before it was 4,100. By about what percentage did Olympian real GDP per person grow during the period?

Accepted Answer

A) 1.6 percent 
B) 2.5 percent 
C) 3.7 percent 
D) 6 percent

Question 3

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 answer of Why is productivity related to the standard...

Question 4

Countries that have lower levels of real GDP per person than the United States

Accepted Answer

A) tend to have growth rates that are higher than that of the United States. 
B) tend to have growth rates that are about the same as that of the United States. 
C) tend to have growth rates that are lower than that of the United States. 
D) in some cases have growth rates that are higher than that of the United States and in other cases lower than that of the United States.

Question 5

When Americans invest in Russia, the income of Russians (that is, Russian GNP) rises by more than production in Russia (that is, Russian GDP).

Accepted Answer

A) True 
 B)False

Question 6

Suppose a country reduces restrictions on how many hours people can work. If reducing these restrictions increase 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.

Question 7

Over the period 1870-2014, the United States experienced an average annual growth rate of real GDP per person of about 1.8 percent per year.

Accepted Answer

A) True 
 B)False

Question 8

The president of Suldinia, a developing country, proposes that his country needs to help domestic firms by reducing trade restrictions.

Accepted Answer

A) These are outward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
B) These are outward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia. 
C) These are inward-oriented policies and most economists believe they would have beneficial effects on growth in Suldinia. 
D) These are inward-oriented policies and most economists believe they would have adverse effects on growth in Suldinia.

Question 9

The long-run effects of an increase in the saving rate include

Accepted Answer

A) a higher level of productivity. 
B) a higher growth rate of productivity. 
C) a higher growth rate of income. 
D) All of the above are correct.

Question 10

The average income in a rich country

Accepted Answer

A) is about 5 times that in a poor country. Further, people in rich countries have longer life expectancy. 
B) is about 5 times that in a poor country. However, people in rich countries have about the same life expectancy as those in poor countries. 
C) is more than ten times that in a poor country. Further, people in rich countries have longer life expectancy. 
D) is more than ten times that in poor country. However, people in rich countries have about the same life expectancy as those in poor countries.

Question 11

Over the past century in the United States, real GDP per person has grown, on average, by about

Accepted Answer

A) 1 percent per year. 
B) 2 percent per year. 
C) 3 percent per year. 
D) 5 percent per year.

Question 12

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 level of productivity. 
B) In the long run, a higher saving rate leads to a higher level of income. 
C) In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income. 
D) All of the above are correct.

Question 13

Susan and Calvin paint houses. Susan consistently paints about 400 square feet of a house's exterior per hour, while Calvin consistently paints about 300 square feet per hour. Susan's __________ exceeds that of Calvin.

Accepted Answer

The answer of Susan and Calvin paint houses. Susan consistently...

Question 14

Which of the following statements is correct?

Accepted Answer

A) In an economy-wide sense, property rights are an important prerequisite for the price system to work. 
B) Property rights give people the ability to exercise authority over the resources they own. 
C) Based on the available evidence, the existence of well-established and well-enforced property rights appears to be associated with an enhanced standard of living. 
D) All of the above are correct.

Question 15

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

Accepted Answer

A) 2 percent. 
B) 5 percent. 
C) 10 percent. 
D) 15 percent.

Question 16

Which of the following is an example of a produced factor of production?

Accepted Answer

A) a plant in which automobiles are assembled 
B) skills that people accumulate in high school and college 
C) skills that people accumulate through experience in the workplace 
D) All of the above are correct.

Question 17

Because of its effect on the amount of capital per worker, in the short term an increase in the working population is likely to

Accepted Answer

A) raise productivity. Other things the same, this increase will be larger in a poor country. 
B) raise productivity. Other things the same, this increase will be larger in a rich country. 
C) reduce productivity. Other things the same, this decrease will be larger in a poor country. 
D) reduce productivity. Other things the same, this decrease will be larger in a rich country.

Question 18

Consider the nations of Brazil, Mexico, and Pakistan. Over the past century, which of these three nations has experienced, by far, slower economic growth than the other two nations?

Accepted Answer

The answer of Consider the nations of Brazil, Mexico, and...

Question 19

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Accepted Answer

A) foreign portfolio investment. 
B) indirect domestic investment. 
C) foreign direct investment. 
D) foreign indirect investment.

Question 20

Miller's Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy's productivity is 12 gallons of milk per hour of labor, then how many milkers does the shop employ?

Accepted Answer

A) 8 
B) 10 
C) 80 
D) 120

Exam 25: Production and Growth