Question 1

In order to promote growth in living standards, policymakers must

Accepted Answer

A)  protect property rights and maintain political stability.
B)  minimize accumulation of factors of production.
C)  rise taxes to increase government revenue.
D)  promote bureaucracy.E) A) and D)
F) B) and C)

Question 2

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Accepted Answer

A) True 
 B)False

Question 3

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Accepted Answer

A) True 
 B)False

Question 4

Because of __________, an increase in the saving rate leads to higher growth of income and productivity only for a while.

Accepted Answer

The answer of Because of __________, an increase in the...

Question 5

Carlos learns how to cook from his mother. This is an example of

Accepted Answer

A)  human capital, but not technological knowledge.
B)  technological knowledge, but not human capital.
C)  both human capital and technological knowledge.
D)  neither human capital nor technological knowledge.E) None of the above
F) B) and C)

Question 6

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 standard of living is a measure of h...

Question 7

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Accepted Answer

In addition to investment in physical an...

Question 8

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)  Education
B)  Research and development
C)  Nutrition
D)  Trade restrictionsE) B) and C)
F) A) and D)

Question 9

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Accepted Answer

A) True 
 B)False

Question 10

Productivity is the amount of goods and services

Accepted Answer

A)  an economy produces.It is not linked to a nation's economic policies.
B)  an economy produces.It is linked to a nation's economic policies.
C)  produced for each hour of a worker's time.It is not linked to a nation's economic policies.
D)  produced for each hour of a worker's time.It is linked to a nation's economic policies.E) A) and B)
F) A) and C)

Question 11

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 12

Suppose a country increases trade restrictions. This country would be pursing

Accepted Answer

A)  an inward-oriented policy, which most economists believe has beneficial effects on the economy.
B)  an inward-oriented, which most economists believe has adverse effects on the economy.
C)  an outward-oriented policy, which most economists believe has beneficial effects on the economy.
D)  an outward-oriented policy, which most economists believe has adverse effects on the economy.E) B) and D)
F) B) and C)

Question 13

In determining living standards, productivity plays a key role for

Accepted Answer

A)  individuals, but not for nations.
B)  nations, but not for individuals.
C)  both nations and individuals.
D)  neither nations nor individuals.E) A) and C)
F) All of the above

Question 14

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Accepted Answer

In the long run, a higher saving rate le...

Question 15

Which of the following can be measured by the level of real GDP per person?

Accepted Answer

A)  Productivity and the standard of living
B)  Productivity but not the standard of living
C)  The standard of living but not productivity
D)  Neither the standard of living nor productivityE) C) and D)
F) B) and C)

Question 16

Figure 25-1 
-Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Accepted Answer

A)  increasing returns to capital.
B)  increasing returns to labor.
C)  diminishing returns to capital.
D)  diminishing returns to labor.E) A) and D)
F) B) and C)

Question 17

An understanding of the best ways to produce goods and services is called

Accepted Answer

A)  human capital.
B)  physical capital.
C)  technology.
D)  productivity.E) A) and C)
F) B) and C)

Question 18

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Accepted Answer

A)  foreign portfolio investment.
B)  foreign financial investment.
C)  foreign direct investment.
D)  indirect foreign investment.E) B) and D)
F) A) and D)

Question 19

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

Accepted Answer

The United Kingdom's growth ra...

Question 20

Country A had a population of 2,000, of whom 500 worked an average of 8 hours a day and had a productivity of 31. Country B had a population of 3,000, of whom 2,100 worked 6 hours a day and had productivity of 20.

Accepted Answer

A)  Country A had the higher level of real GDP and real GDP per person.
B)  Country A had the higher level of real GDP and Country B had the higher level of real GDP per person.
C)  Country B had the higher level of real GDP and Country A had the higher level of real GDP per person.
D)  Country B had the higher level of real GDP and real GDP per person.E) A) and B)
F) B) and D)

Exam 25: Production and Growth

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

Correct AnswerverifiedShow Answer

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct AnswerverifiedShow Answer

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment, poor countries tend to grow at a faster rate than rich countries.

Correct AnswerverifiedShow Answer

An understanding of the best ways to produce goods and services is called

Correct AnswerverifiedShow Answer

If an American-based firm opens and operates a new clothing factory in Honduras, then it is engaging in

Correct AnswerverifiedShow Answer

Carlos learns how to cook from his mother. This is an example of

Correct AnswerverifiedShow Answer

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Correct AnswerverifiedIn addition to investment in physical an...View AnswerShow Answer

Because of __________, an increase in the saving rate leads to higher growth of income and productivity only for a while.

Correct AnswerverifiedShow Answer

Consider the nations of Canada, the United Kingdom, and the United States. Since 1870, which of these nations has progressed, in an economic sense, more slowly than the other two nations?

Correct AnswerverifiedThe United Kingdom's growth ra...View AnswerShow Answer

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.

Correct AnswerverifiedThe standard of living is a measure of h...View AnswerShow Answer

The people of Country X save 10 percent of their income, and the people of Country Y save 25 percent of their income. If these respective saving rates persist forever, will one country or the other enjoy a higher rate of income growth forever? Explain.

Correct AnswerverifiedIn the long run, a higher saving rate le...View AnswerShow Answer

Which of the following can be measured by the level of real GDP per person?

Correct AnswerverifiedShow Answer

Suppose a country increases trade restrictions. This country would be pursing

Correct AnswerverifiedShow Answer

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Correct AnswerverifiedShow Answer

Productivity is the amount of goods and services

Correct AnswerverifiedShow Answer

In determining living standards, productivity plays a key role for

Correct AnswerverifiedShow Answer

Country A had a population of 2,000, of whom 500 worked an average of 8 hours a day and had a productivity of 31. Country B had a population of 3,000, of whom 2,100 worked 6 hours a day and had productivity of 20.

Correct AnswerverifiedShow Answer

Figure 25-1 -Refer to Figure 25-1. The curve becomes flatter as the amount of capital per worker increases because of

Correct AnswerverifiedShow Answer

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

Correct AnswerverifiedShow Answer

In order to promote growth in living standards, policymakers must

Correct AnswerverifiedShow Answer

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In addition to investment in physical an...
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The United Kingdom's growth ra...
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The standard of living is a measure of h...
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In the long run, a higher saving rate le...
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