Question 1

As of 2014, using real GDP per person as a measure, we would classify

Accepted Answer

A) the United States and Mexico as advanced economies and Bangladesh as a middle-income country. 
B) Canada as an advanced economy, Mexico as a middle-income country, and Pakistan as a poor country. 
C) Japan and India as advanced economies and Mexico as a poor country. 
D) Japan as an advanced economy, the United Kingdom as a middle-income country, and Argentina as a poor country.

Question 2

Which of the following statements is correct? In 2014,

Accepted Answer

A) real income per person in the U.S. was about 4 times that in China. 
B) real income per person in China was more than 2 times that in India. 
C) the typical resident of India had less real income than the typical resident of England in 1870. 
D) All of the above are correct.

Question 3

A country's human capital increases

Accepted Answer

A) if its workers become better educated or healthier. 
B) only if its workers become better educated. 
C) only if its workers become healthier. 
D) None of the above is correct.

Question 4

"When workers acquire tools, they become more productive." This statement reflects the general fact that __________ is a determinant of productivity.

Accepted Answer

The answer of "When workers acquire tools, they become more...

Question 5

Does a country have to be blessed with large quantities of natural resources in order to enjoy a high standard of living? Briefly explain.

Accepted Answer

The answer of Does a country have to be blessed...

Question 6

Suppose that real GDP grew more in Country A than in Country B last year.

Accepted Answer

A) Country A must have a higher standard of living than country B. 
B) Country A's productivity must have grown faster than country B's. 
C) Both of the above are correct. 
D) None of the above are correct.

Question 7

Country A and country B are the same except country A currently has more capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then

Accepted Answer

A) output in country A increases by more than in country B. 
B) output in country A increases by the same amount as in country B. 
C) output in country A increases by less than in country B. 
D) None of the above is necessarily correct.

Question 8

Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N).
-Refer to Scenario 25-1. If the production function has the constant-returns-to-scale property, then it is possible that the specific form of the production function is

Accepted Answer

A) Y = 4L + 2K + 3H + N 
B) Y = (L + K + H + N)/4 
C) Y =2  
D) Y = 4

Question 9

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Accepted Answer

A) Ethiopia 
B) the United States 
C) Canada 
D) South Korea

Question 10

Which of the following is not an example of physical capital?

Accepted Answer

A) a new factory building 
B) a delivery van 
C) the knowledge of workers 
D) the office chair in a lawyer's office

Question 11

Which of the following measures how the level of well-being in a country has changed over time?

Accepted Answer

A) level of nominal GDP per person. 
B) growth rate of nominal GDP. 
C) growth rate of real GDP. 
D) growth rate of real GDP per person.

Question 12

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Accepted Answer

A) Output will rise by more than it did when the previous unit was added. 
B) Output will rise but by less than it did when the previous unit was added. 
C) Output will fall by more than it did when the previous unit was added. 
D) Output will fall but by less then it did when the previous unit was added.

Question 13

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of __________.

Accepted Answer

The answer of The level of real GDP is a...

Question 14

You and your friend work together for 4 hours to produce a total of 8 bookcases. What is productivity?

Accepted Answer

A) 16 bookcases 
B) 8 bookcases 
C) 2 bookcases per hour 
D) 1 bookcase per hour

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Average income in some East Asian countries, as measured by real GDP per person, has recently grown at an average annual rate that implies income will double about every

Accepted Answer

A) 10 years. 
B) 15 years. 
C) 20 years. 
D) 25 years.

Question 17

Which of the following statements is correct?

Accepted Answer

A) In the late 1800s, real GDP per person was higher in the United Kingdom than in the United States. 
B) In 2014, real GDP per person was higher in the United Kingdom than in the United States. 
C) The average annual growth rate of real GDP was higher in the United Kingdom than in the United States between the late 1800s and 2014. 
D) All of the above are correct.

Question 18

Other things the same, an increase in population growth

Accepted Answer

A) increases capital per worker. Further, there is some evidence that a higher population growth rate may increase the pace of technological progress. 
B) increases capital per worker. However, there is some evidence that a higher population growth rate may decrease the pace of technological progress. 
C) decreases capital per worker. Further, there is some evidence that a higher population growth rate may decrease the pace of technological progress. 
D) decreases capital per worker. However, there is some evidence that a higher population growth rate may increase the pace of technological progress.

Question 19

Suppose that a new government is elected in Eurnesia. The new government takes steps toward improving the court system and reducing government corruption. The citizens of Eurnesia find these efforts credible and outsiders believe these changes will be effective and long lasting. These changes will probably

Accepted Answer

A) raise real GDP per person and productivity in Eurnesia. 
B) raise real GDP per person but not productivity in Eurnesia. 
C) raise productivity but not real GDP per person in Eurnesia. 
D) raise neither productivity nor real GDP per person in Eurnesia.

Question 20

If a Japanese company opens a new factory in South Korea, it makes

Accepted Answer

A) foreign direct investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
B) foreign direct investment. The factory will make a bigger impact on South Korea's GNP than on its GDP. 
C) foreign portfolio investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. 
D) foreign portfolio investment. The factory will make a bigger impact on South Korea's GNP than on its GDP.

Exam 25: Production and Growth