Question 1

Which statement is consistent with the catch-up effect?

Accepted Answer

A)   The United States had a lower growth rate before 1900 than after.
B)   Japan has a higher growth rate than Germany.
C)   Although Canada has a relatively high level of output per person, its growth rate is still high compared to some poorer countries, such as Pakistan.
D)   After World War II, Canada had lower growth rates than war-ravaged European countries.E) A) and C)
F) None of the above

Question 2

Which statement best defines technological knowledge?

Accepted Answer

A)   It is the same as human capital.
B)   It is available information on how to produce things.
C)   It is the resources expended transmitting society's understanding to the labour force.
D)   It is knowledge related to computer literacy.E) None of the above
F) B) and D)

Question 3

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would NOT be considered physical capital?

Accepted Answer

A)   a sewing machine in an alterations shop
B)   a computer used to help Mercury Delivery Service keep track of their orders
C)   on-the-job training
D)   a desk used in an accountant's officeE) B) and C)
F) A) and D)

Question 5

In countries where women are discriminated against, policies that increase their career and educational opportunities are likely to increase the birth rate.

Accepted Answer

A) True 
 B)False

Question 6

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 7

If a country's saving rate increases, what happens in the long run?

Accepted Answer

A)   Productivity does not change.
B)   Real GDP per person decreases.
C)   Real GDP per person does not change.
D)   Productivity increases.E) A) and B)
F) A) and D)

Question 8

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Accepted Answer

A)   by encouraging population growth
B)   by encouraging consumption
C)   by encouraging saving and investment
D)   by increasing government spendingE) C) and D)
F) None of the above

Question 9

What is the average amount of goods and services produced from each hour of a worker's time called?

Accepted Answer

A)   per capita GDP
B)   per capita national income
C)   productivity
D)   human capitalE) B) and C)
F) A) and D)

Question 10

Why are Canadian workers more productive than the Chinese?

Accepted Answer

A)   because Canada is a federal state
B)   because Canadians have more capital to work with
C)   because prices are higher in Canada than in China
D)   because the most productive Chinese workers have emigrated to CanadaE) None of the above
F) All of the above

Question 11

Suppose you bake cupcakes. One day, you double the time you spend baking and double the sugar, flour, eggs, and all the other inputs in order to bake twice as many cupcakes. What kind of production function is this?

Accepted Answer

A)   decreasing returns to scale
B)   zero returns to scale
C)   constant returns to scale
D)   increasing returns to scaleE) A) and B)
F) A) and C)

Question 12

What is the most appropriate measure of a nation's standard of living?

Accepted Answer

A)   real GDP
B)   real GDP per person
C)   nominal GDP
D)   nominal GDP per personE) A) and B)
F) A) and D)

Question 13

Which terms refers to the relationship between the quantity of output created and the quantity of inputs needed to create it?

Accepted Answer

A)   the capital accumulation function
B)   technological knowledge
C)   the production function
D)   human capitalE) A) and B)
F) All of the above

Question 14

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Accepted Answer

A)   Some of the income from the factory accrues to people who live in Egypt.
B)   GDP is income earned by residents only, whereas GNP is income earned by residents and nonresidents.
C)   All of the income from the factory is included in Egypt's GDP, but not all is included in GNP.
D)   Foreign direct investment is part of GDP, but it is not part of GNP.E) A) and D)
F) C) and D)

Question 15

The average person in a rich country, such as Germany, has income about ten times that of an average person in a poor country, such as Indonesia.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following does Y/L refer to?

Accepted Answer

A)   productivity
B)   output
C)   the availability of capital technology
D)   the amount of human capitalE) All of the above
F) A) and C)

Question 17

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Accepted Answer

A)   increase Canadian GNP more than it would increase Canadian GDP
B)   increase Canadian GDP more than it would increase Canadian GNP
C)   not affect Canadian GNP, but it would increase Canadian GDP
D)   not affect Canadian GDP, but it would increase Canadian GNPE) B) and C)
F) A) and C)

Question 18

What is an externality aspect of education?

Accepted Answer

A)   Education produces a return to society that is greater than the return to the individual.
B)   Education produces a return to society that is less than the return to the individual.
C)   Education produces costs to society that are greater than the costs to the individual.
D)   Education produces costs to the individual that are greater than the costs to society.E) A) and B)
F) B) and D)

Question 19

Why do birth rates tend to be lower in developed countries than in developing countries?

Accepted Answer

A)   because people are older in developed countries
B)   because education is more expensive in developed countries
C)   because women with the opportunity to receive a good education and desirable employment tend to want fewer children
D)   because government policies in developing countries reward families with childrenE) A) and C)
F) C) and D)

Question 20

An increase in the saving rate does not permanently increase the growth rate of real GDP per person.

Accepted Answer

A) True 
 B)False

Exam 7: Production and Growth

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Correct AnswerverifiedShow Answer

The average person in a rich country, such as Germany, has income about ten times that of an average person in a poor country, such as Indonesia.

Correct AnswerverifiedShow Answer

Why are Canadian workers more productive than the Chinese?

Correct AnswerverifiedShow Answer

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Correct AnswerverifiedShow Answer

An increase in the saving rate does not permanently increase the growth rate of real GDP per person.

Correct AnswerverifiedShow Answer

Which statement is consistent with the catch-up effect?

Correct AnswerverifiedShow Answer

What is the average amount of goods and services produced from each hour of a worker's time called?

Correct AnswerverifiedShow Answer

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Correct AnswerverifiedShow Answer

If a country's saving rate increases, what happens in the long run?

Correct AnswerverifiedShow Answer

A forest is an example of a nonrenewable resource.

Correct AnswerverifiedShow Answer

Which terms refers to the relationship between the quantity of output created and the quantity of inputs needed to create it?

Correct AnswerverifiedShow Answer

Why do birth rates tend to be lower in developed countries than in developing countries?

Correct AnswerverifiedShow Answer

Which statement best defines technological knowledge?

Correct AnswerverifiedShow Answer

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Correct AnswerverifiedShow Answer

What is an externality aspect of education?

Correct AnswerverifiedShow Answer

Which of the following does Y/L refer to?

Correct AnswerverifiedShow Answer

Which of the following would NOT be considered physical capital?

Correct AnswerverifiedShow Answer

Suppose you bake cupcakes. One day, you double the time you spend baking and double the sugar, flour, eggs, and all the other inputs in order to bake twice as many cupcakes. What kind of production function is this?

Correct AnswerverifiedShow Answer

In countries where women are discriminated against, policies that increase their career and educational opportunities are likely to increase the birth rate.

Correct AnswerverifiedShow Answer

What is the most appropriate measure of a nation's standard of living?

Correct AnswerverifiedShow Answer

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