Question 1

The catch-up effect says that countries with low income can grow faster than countries with higher income.
However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

Accepted Answer

The argument that poor countries will te...

Question 2

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Accepted Answer

A)   housing
B)   healthcare
C)   life expectancy
D)   All of the above.E) A) and B)
F) A) and C)

Question 3

"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 an unconventional view of the production process.
B)   is an assertion that capital is subject to increasing 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) A) and B)
F) A) and C)

Question 4

Which of the following best illustrates the human capital of a survivor stranded on an island?

Accepted Answer

A)   the fishing poles she has produced
B)   the invention of a better fishing lure
C)   the fresh fruit and fish on and around the island
D)   her previous training in a survival courseE) A) and B)
F) B) and D)

Question 5

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) None of the above
F) A) and B)

Question 6

Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?

Accepted Answer

The explanation is based on the concept ...

Question 7

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 hourE) A) and B)
F) All of the above

Question 8

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)   both the demand for the resource and the supply of the resource have increased.
B)   both the demand for the resource and the supply of the resource have decreased.
C)   the demand for the resource has increased and the supply has decreased.
D)   the demand for the resource has decreased and the supply has increased.E) A) and D)
F) A) and B)

Question 9

Senator Noitall says that in order to help poor countries develop, the United States should: 1. Encourage poor countries to allow U.S. and other foreign firms to build and operate businesses in their country; 2. Reduce or eliminate subsidizes to U.S. producers when poor countries have a comparative advantage producing those goods the U.S. subsidizes; 3. Work to promote political stability in poor countries; and 4. Reduce poor countries reliance on market forces in their economies. How many of these ideas are likely to help poor countries grow?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) All of the above
F) A) and B)

Question 10

Technological knowledge

Accepted Answer

A)   is the same thing as human capital.
B)   can be discovered but it can never be kept secret.
C)   is a determinant of productivity.
D)   does not play a role in the relationship that economists call the production function.E) All of the above
F) A) and C)

Question 11

Like physical capital, human capital is a produced factor of production.

Accepted Answer

A) True 
 B)False

Question 12

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Accepted Answer

A)   higher productivity, and a higher growth rate of real GDP.
B)   higher productivity, but not a higher growth rate of real GDP.
C)   the same productivity and growth of real GDP it began with.
D)   None of the above is correct.E) A) and B)
F) None of the above

Question 13

After adjusting for inflation, over time the prices of most natural resources have been

Accepted Answer

A)   steady or falling, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling.
B)   steady or falling, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.
C)   rising, meaning that our ability to conserve them is growing more rapidly than their supplies are dwindling.
D)   rising, meaning that their supplies are dwindling more rapidly than our ability to conserve them is growing.E) All of the above
F) C) and D)

Question 14

In 2010, Acme Foods produced 300,000 bags of pretzels, employing 12,000 hours of labor. In 2011, it produced 322,000 bags of pretzels, employing 14,000 hours of labor. Acme Foods productivity

Accepted Answer

A)   decreased by 8%.
B)   was unchanged.
C)   increased by 6.8%.
D)   increased by 7.3%.E) All of the above
F) C) and D)

Question 15

Scenario 25-1. An economy's production form takes the form Y = AFL, 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 = 4E) None of the above
F) A) and B)

Question 16

According to studies using international data, an increase in the saving rate

Accepted Answer

A)   does not increase the growth rate of output.
B)   increases the growth rate of output for a few years.
C)   increases the growth rate of output for about a decade.
D)   increases the growth rate of output for several decades.E) A) and B)
F) A) and C)

Question 17

Which one of the factors of production originates as an output from the production process, and is subsequently used as an input into the production process?

Accepted Answer

The input ...

Question 18

A rapid increase in the number of workers, other things the same, is likely in the short term to

Accepted Answer

A)   raise real GDP per person, but decrease real GDP.
B)   decrease both real GDP and real GDP per person.
C)   raise both real GDP and real GDP per person.
D)   raise real GDP, but decrease real GDP per person.E) A) and D)
F) A) and C)

Question 19

In order for the standard of living within a country to be enhanced over time, which of the following is essential?

Accepted Answer

A)   The role of the country's government in the economy must become larger.
B)   The population of the country must increase.
C)   More domestic natural resources must be discovered and used.
D)   The level of productivity must increase.E) B) and D)
F) A) and B)

Question 20

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Accepted Answer

A)   the production process cannot be enhanced by technological advances.
B)   no mathematical representation of the relevant production function can be formulated.
C)   the relevant production function has the limits-to-growth property.
D)   the relevant production function has the constant-returns-to-scale property.E) A) and D)
F) None of the above

Exam 7: Production and Growth

Which one of the factors of production originates as an output from the production process, and is subsequently used as an input into the production process?

Correct Answer
verified
The input ...
View 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 Answer
verified

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Correct Answer
verified

Like physical capital, human capital is a produced factor of production.

Correct Answer
verified

In 2010, Acme Foods produced 300,000 bags of pretzels, employing 12,000 hours of labor. In 2011, it produced 322,000 bags of pretzels, employing 14,000 hours of labor. Acme Foods productivity

Correct Answer
verified

In which of the following cases can we be certain that a natural resource has become scarcer?

Correct Answer
verified

Technological knowledge

Correct Answer
verified

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Correct Answer
verified

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

Correct Answer
verified

According to studies using international data, an increase in the saving rate

Correct Answer
verified

Correct Answer
verified
The argument that poor countries will te...
View Answer

Scenario 25-1. An economy's production form takes the form Y = AFL, 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

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

A rapid increase in the number of workers, other things the same, is likely in the short term to

Correct Answer
verified

Correct Answer
verified
The explanation is based on the concept ...
View Answer

Correct Answer
verified

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct Answer
verified

Which of the following best illustrates the human capital of a survivor stranded on an island?

Correct Answer
verified

After adjusting for inflation, over time the prices of most natural resources have been

Correct Answer
verified

In order for the standard of living within a country to be enhanced over time, which of the following is essential?

Correct Answer
verified

Exam 7: Production and Growth

Which one of the factors of production originates as an output from the production process, and is subsequently used as an input into the production process?

Correct AnswerverifiedThe input ...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

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Correct AnswerverifiedShow Answer

Like physical capital, human capital is a produced factor of production.

Correct AnswerverifiedShow Answer

In 2010, Acme Foods produced 300,000 bags of pretzels, employing 12,000 hours of labor. In 2011, it produced 322,000 bags of pretzels, employing 14,000 hours of labor. Acme Foods productivity

Correct AnswerverifiedShow Answer

In which of the following cases can we be certain that a natural resource has become scarcer?

Correct AnswerverifiedShow Answer

Technological knowledge

Correct AnswerverifiedShow Answer

In a particular production process, if the quantities of all inputs used double, then the quantity of output doubles as well. This means that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to studies using international data, an increase in the saving rate

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe argument that poor countries will te...View AnswerShow Answer

Scenario 25-1. An economy's production form takes the form Y = AFL, 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

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

A rapid increase in the number of workers, other things the same, is likely in the short term to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe explanation is based on the concept ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Other things the same, if a country increased its saving rate, in 40 years or so it would likely have

Correct AnswerverifiedShow Answer

Which of the following best illustrates the human capital of a survivor stranded on an island?

Correct AnswerverifiedShow Answer

After adjusting for inflation, over time the prices of most natural resources have been

Correct AnswerverifiedShow Answer

In order for the standard of living within a country to be enhanced over time, which of the following is essential?

Correct AnswerverifiedShow Answer

Correct Answer
verified
The input ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The argument that poor countries will te...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The explanation is based on the concept ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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