Question 1

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) B) and D)

Question 2

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions.What kind of policies are these?

Accepted Answer

A)   These are outward-oriented policies and most economists believe they would have beneficial effects on growth.
B)   These are outward-oriented policies and most economists believe they would have adverse effects on growth.
C)   These are inward-oriented policies and most economists believe they would have beneficial effects on growth.
D)   These are inward-oriented policies and most economists believe they would have adverse effects on growth.E) C) and D)
F) None of the above

Question 3

What is an effect of inward-oriented policies?

Accepted Answer

A)   They impede growth because they restrict investment.
B)   They have generally increased productivity and growth in the countries that pursued them.
C)   They promote production of goods and services; the country that adopts them can produce most efficiently.
D)   They are likely to create more jobs for domestic workers.E) B) and C)
F) A) and C)

Question 4

Which of the following best describes changes in the average well-being in a country?

Accepted Answer

A)   the growth rate of the unemployed
B)   the growth rate of nominal GDP
C)   the growth rate of real GDP
D)   the growth rate of real GDP per personE) C) and D)
F) B) and D)

Question 5

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,what would happen to productivity?

Accepted Answer

A)   It would fall to half its former value.
B)   It would fall,but by less than half.
C)   It would stay the same.
D)   It would rise,but by less than double.E) All of the above
F) A) and B)

Question 6

What best defines human capital?

Accepted Answer

A)   the knowledge and skills that workers acquire through education,training,and experience
B)   the stock of equipment and structures that is used to produce goods and services
C)   the total number of workers in the labour force
D)   the total amount that is paid in wages in an economyE) A) and B)
F) None of the above

Question 7

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 8

The following table shows real GDP per person in a few countries over a period of about a century.
a)Does this data support the catch-up theory of economic growth? Explain your answer.
b)What additional information would be necessary when testing the catch-up theory?

Accepted Answer

a)The catch-up theory of growth suggests...

Question 9

Which statement best defines productivity?

Accepted Answer

A)   Productivity is the ability of a company to generate profit.
B)   Productivity is the quantity of goods and services that a nation can produce in a year.
C)   Productivity is the quantity of goods or services that a worker can produce in one hour.
D)   Productivity is the ability of a company to produce goods and services.E) A) and B)
F) B) and D)

Question 10

Which statement best explains how investment and growth rates relate across countries?

Accepted Answer

A)   They are negatively related.
B)   They are positively related.
C)   They are negatively related for rich countries,but positively related for poor countries.
D)   They are positively related for rich countries,but negatively related for poor countries.E) B) and C)
F) C) and D)

Question 11

Which statement best defines proprietary technology?

Accepted Answer

A)   It is knowledge that is known but no longer relevant in a market.
B)   It is knowledge that is known,but has only recently been discovered.
C)   It is knowledge that is known widely by those in a profession.
D)   It is knowledge that is known only by the company that discovers it.E) C) and D)
F) A) and B)

Question 12

If a production function has constant returns to scale,how can output be doubled?

Accepted Answer

A)   by doubling labour
B)   by doubling any one of the inputs
C)   by doubling all of the inputs
D)   by increasing all inputs by more than doubleE) A) and D)
F) A) and C)

Question 13

What would an economist call the saws,lathes,and drill presses that woodworkers at Cedar Valley Furniture use to produce chests and cabinets?

Accepted Answer

A)   human capital
B)   physical capital
C)   production resources
D)   technological knowledgeE) A) and B)
F) A) and C)

Question 14

Which statement best characterizes the variations in real GDP per person and its rate of growth across countries?

Accepted Answer

A)   Real GDP per person differs widely across countries,but the growth rate of real GDP per person is similar across countries.
B)   Real GDP per person is very similar across countries,but the growth rate of real GDP per person differs widely across countries.
C)   Real GDP per person and the growth rate of real GDP per person are similar across countries.
D)   Real GDP per person and the growth rate of real GDP per person vary widely across countries.E) A) and B)
F) A) and C)

Question 15

What might the African governments do to foster higher economic growth?

Accepted Answer

They could make,perhaps with outside sup...

Question 16

Other things equal,how do relatively poor countries tend to grow?

Accepted Answer

A)   They grow slower than relatively rich countries; this is called the poverty trap.
B)   They grow slower than relatively rich countries; this is called the Malthus effect.
C)   They grow faster than relatively rich countries; this is called the catch-up effect.
D)   They grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.E) C) and D)
F) A) and B)

Question 17

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

Question 18

Over the past 100 years,Canadian real GDP per person has doubled about every 35 years.If in the next 100 years it doubles every 25 years,then what will Canadian real GDP per person be a century from now?

Accepted Answer

A)   8 times higher than it is now
B)   10 times higher than it is now
C)   12 times higher than it is now
D)   16 times higher than it is nowE) C) and D)
F) B) and D)

Question 19

For background,read the article "Fruit pickers: 'The money we earn is not worth getting out of bed for'" (http: / / goo.gl / MCQcC).This article apparently has very little to do with economic growth theories.However,it offers an excellent opportunity to better understand some important aspects of economic growth and development.Fruit picking is one area where technological progress is slow or nonexistent.For instance,strawberry-picking robots are still far from taking the jobs of the thousands of workers employed in the field.Suppose a worker is paid the minimum wage,which is,let's say $8 in the UK and $3 in Bulgaria.Suppose a worker in the UK is able to pick 10 kilos of strawberries in one hour,the same as a worker in Bulgaria.Suppose all strawberries picked in the UK and Bulgaria are exported to countries such as Norway,where they sell for $10 a kilo.
a)Where does a fruit-picking worker have higher productivity,in the UK or in Bulgaria? Why are they paid different wages?
b)British people complain that foreign immigrants "steal" their jobs.Why would a British worker not want to take such a job? Why would an employer in the UK wish to hire a Bulgarian worker instead of a British one? More generally,why do developed countries tend to "export" low-productivity jobs? Does this reduce the standards of living in the developed countries?

Accepted Answer

a)By definition,productivity is the quan...

Question 20

Cedar Valley Furniture uses 10 workers working 8 hours to produce 160 rocking chairs.What is the productivity of these workers?

Accepted Answer

A)   1 chair per hour
B)   2 chairs per hour
C)   10 chairs per day
D)   80 chairs per dayE) B) and C)
F) A) and B)

Exam 7: Production and Growth

Correct Answer
verified
a)By definition,productivity is the quan...
View Answer

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,what would happen to productivity?

Correct Answer
verified

Over the past 100 years,Canadian real GDP per person has doubled about every 35 years.If in the next 100 years it doubles every 25 years,then what will Canadian real GDP per person be a century from now?

Correct Answer
verified

Which of the following best describes changes in the average well-being in a country?

Correct Answer
verified

Which statement best defines proprietary technology?

Correct Answer
verified

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

Which statement best defines productivity?

Correct Answer
verified

Which statement best characterizes the variations in real GDP per person and its rate of growth across countries?

Correct Answer
verified

If a production function has constant returns to scale,how can output be doubled?

Correct Answer
verified

Which statement best explains how investment and growth rates relate across countries?

Correct Answer
verified

What is an effect of inward-oriented policies?

Correct Answer
verified

The following table shows real GDP per person in a few countries over a period of about a century. a)Does this data support the catch-up theory of economic growth? Explain your answer. b)What additional information would be necessary when testing the catch-up theory?

Correct Answer
verified
a)The catch-up theory of growth suggests...
View Answer

What would an economist call the saws,lathes,and drill presses that woodworkers at Cedar Valley Furniture use to produce chests and cabinets?

Correct Answer
verified

What might the African governments do to foster higher economic growth?

Correct Answer
verified
They could make,perhaps with outside sup...
View Answer

Cedar Valley Furniture uses 10 workers working 8 hours to produce 160 rocking chairs.What is the productivity of these workers?

Correct Answer
verified

Other things equal,how do relatively poor countries tend to grow?

Correct Answer
verified

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 Answer
verified

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions.What kind of policies are these?

Correct Answer
verified

What best defines human capital?

Correct Answer
verified

Why are Canadian workers more productive than the Chinese?

Correct Answer
verified

Exam 7: Production and Growth

Correct Answerverifieda)By definition,productivity is the quan...View AnswerShow Answer

If the number of workers in an economy doubled,all other inputs stayed the same,and there were constant returns to scale,what would happen to productivity?

Correct AnswerverifiedShow Answer

Over the past 100 years,Canadian real GDP per person has doubled about every 35 years.If in the next 100 years it doubles every 25 years,then what will Canadian real GDP per person be a century from now?

Correct AnswerverifiedShow Answer

Which of the following best describes changes in the average well-being in a country?

Correct AnswerverifiedShow Answer

Which statement best defines proprietary technology?

Correct AnswerverifiedShow Answer

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

Which statement best defines productivity?

Correct AnswerverifiedShow Answer

Which statement best characterizes the variations in real GDP per person and its rate of growth across countries?

Correct AnswerverifiedShow Answer

If a production function has constant returns to scale,how can output be doubled?

Correct AnswerverifiedShow Answer

Which statement best explains how investment and growth rates relate across countries?

Correct AnswerverifiedShow Answer

What is an effect of inward-oriented policies?

Correct AnswerverifiedShow Answer

The following table shows real GDP per person in a few countries over a period of about a century. a)Does this data support the catch-up theory of economic growth? Explain your answer. b)What additional information would be necessary when testing the catch-up theory?

Correct Answerverifieda)The catch-up theory of growth suggests...View AnswerShow Answer

What would an economist call the saws,lathes,and drill presses that woodworkers at Cedar Valley Furniture use to produce chests and cabinets?

Correct AnswerverifiedShow Answer

What might the African governments do to foster higher economic growth?

Correct AnswerverifiedThey could make,perhaps with outside sup...View AnswerShow Answer

Cedar Valley Furniture uses 10 workers working 8 hours to produce 160 rocking chairs.What is the productivity of these workers?

Correct AnswerverifiedShow Answer

Other things equal,how do relatively poor countries tend to grow?

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

The president of a developing country proposes that his country needs to help domestic firms by imposing trade restrictions.What kind of policies are these?

Correct AnswerverifiedShow Answer

What best defines human capital?

Correct AnswerverifiedShow Answer

Why are Canadian workers more productive than the Chinese?

Correct AnswerverifiedShow Answer

Correct Answer
verified
a)By definition,productivity is the quan...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a)The catch-up theory of growth suggests...
View Answer

Correct Answer
verified

Correct Answer
verified
They could make,perhaps with outside sup...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified