Question 1

If a country increases its saving rate, which of the following permanently grow at a higher rate?

Accepted Answer

A)   productivity and real GDP per person
B)   productivity but not real GDP per person
C)   real GDP per person but not productivity
D)   neither real GDP per person nor productivityE) A) and B)
F) B) and D)

Question 2

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Accepted Answer

A) True 
 B)False

Question 3

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Accepted Answer

A)   proprietary knowledge.
B)   technological knowledge.
C)   human capital.
D)   physical capital.E) B) and C)
F) All of the above

Question 4

Which of the following is a determinant of productivity?

Accepted Answer

A)   human capital per worker
B)   physical capital per worker
C)   natural resources per worker
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 5

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Accepted Answer

A)   physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce.
B)   physical capital. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.
C)   technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas less scarce.
D)   technological knowledge. If Amy's discovery leads to lower natural gas prices, it has made natural gas scarcer.E) C) and D)
F) A) and C)

Question 6

An increase in capital will increase real GDP per person

Accepted Answer

A)   more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment.
B)   more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.
C)   less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment.
D)   less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment.E) A) and B)
F) All of the above

Question 7

Table 25-1.
Athens and Troy both produce only ribs and baked potatoes. 
-Refer to Table 25-1. Which of the following is correct?

Accepted Answer

A)   Both real GDP and real GDP per person are higher in Athens than Troy.
B)   Real GDP is higher in Athens while real GDP per person is higher in Troy
C)   Real GDP is higher in Troy while real GDP per person is higher in Athens.
D)   Both real GDP and real GDP per person are higher in Troy than Athens.E) All of the above
F) None of the above

Question 8

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

A) True 
 B)False

Question 9

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 500,000. In 2011 it had a population of 5,100 and real GDP of 520,200. During 2011 real GDP per person in Bovina grew by

Accepted Answer

A)   2 percent, which is high compared to average U.S. growth over the last one-hundred years.
B)   2 percent, which is about the same as average U.S. growth over the last one-hundred years.
C)   4 percent, which is high compared to average U.S. growth over the last one-hundred years.
D)   4 percent, which is about the same as average U.S. growth over the last one-hundred years.E) B) and D)
F) B) and C)

Question 10

Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20 hours a week and produces 12 bird houses. Which of the following is correct?

Accepted Answer

A)   Adam's production and productivity are higher than Doug's.
B)   Adam's production is higher than Doug's, but Doug's productivity is higher than Adam's.
C)   Doug's production is higher than Adam's, but Adam's productivity is higher than Doug's.
D)   Doug's production and productivity are higher than Adam's.E) A) and B)
F) A) and C)

Question 11

The short-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.E) C) and D)
F) B) and C)

Question 12

In the long run, a higher saving rate

Accepted Answer

A)   cannot increase the capital stock.
B)   means that people must consume less in the future.
C)   increases the level of productivity.
D)   None of the above is correct.E) C) and D)
F) None of the above

Question 13

Which of the following statements is correct?

Accepted Answer

A)   Human capital per worker is a determinant of productivity.
B)   A nation cannot be highly productive in producing goods and services without abundant quantities of natural resources.
C)   Human capital and technological knowledge are the same thing.
D)   All technological knowledge is proprietary.E) B) and D)
F) A) and D)

Question 14

Which of the following is correct?

Accepted Answer

A)   Countries with the highest growth rates over the last 120 years are the ones that had the highest level of real GDP 120 years ago.
B)   Most countries have had little fluctuation around their average growth rates during the past 120 years.
C)   The ranking of countries by income changes little over time.
D)   Even though Japan had a higher growth rate of real GDP per person than the U.S. over the last 120 years, it's level of real GDP per person is less than that of the U.S.E) B) and C)
F) A) and B)

Question 15

The equipment and structures available to produce goods and services are called

Accepted Answer

A)   physical capital.
B)   human capital.
C)   the production function.
D)   technology.E) None of the above
F) All of the above

Question 16

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

A) True 
 B)False

Question 17

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 officeE) A) and C)
F) A) and B)

Question 18

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

Accepted Answer

physical c...

Question 19

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Accepted Answer

A)   represents the traditional view of the production process.
B)   is an assertion that capital is subject to diminishing returns.
C)   is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 20

Which of the following is an observation made by economist Michael Kremer?

Accepted Answer

A)   World growth rates increased as the population increased.
B)   Technological progress allows for increasing population because of advances in agriculture.
C)   World population is growing so rapidly that soon it will outstrip natural resources and our standard of living will decline.
D)   All of the above are observations made by Kremer.E) A) and C)
F) A) and D)

Exam 25: Production and Growth

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an observation made by economist Michael Kremer?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer.

Correct AnswerverifiedShow Answer

An increase in capital will increase real GDP per person

Correct AnswerverifiedShow Answer

The equipment and structures available to produce goods and services are called

Correct AnswerverifiedShow Answer

Table 25-1. Athens and Troy both produce only ribs and baked potatoes. -Refer to Table 25-1. Which of the following is correct?

Correct AnswerverifiedShow Answer

In the long run, a higher saving rate

Correct AnswerverifiedShow Answer

If a country increases its saving rate, which of the following permanently grow at a higher rate?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Adam and Doug both build birdhouses. Adam works 30 hours a week and produces 15 bird houses. Doug works 20 hours a week and produces 12 bird houses. Which of the following is correct?

Correct AnswerverifiedShow Answer

Countries with high population growth rates tend to have lower levels of educational attainment.

Correct AnswerverifiedShow Answer

Economist Michael Kremer found that world growth rates fell as population increased.

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedphysical c...View AnswerShow Answer

"When workers already have a large quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity only slightly." This statement

Correct AnswerverifiedShow Answer

Amy discovers a way to produce water heaters so they are less expensive and use less natural gas. Amy's discovery is

Correct AnswerverifiedShow Answer

Which of the following is a determinant of productivity?

Correct AnswerverifiedShow Answer

Perry accumulated a lot of mathematical skills while in high school, college, and graduate school. Economists include these skills as part of Perry's

Correct AnswerverifiedShow Answer

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 500,000. In 2011 it had a population of 5,100 and real GDP of 520,200. During 2011 real GDP per person in Bovina grew by

Correct AnswerverifiedShow Answer

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physical c...
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