Question 1

Which of the following statements about inputs is correct?

Accepted Answer

A)   A forest is an example of a natural resource; it is also an example of a renewable resource.
B)   There is no distinction between human capital and technological knowledge.
C)   Human capital is a non-produced factor of production.
D)   Physical capital is a non-produced factor of production.E) A) and B)
F) All of the above

Question 2

One reason that governments may find it useful to sponsor universities and basic research is that to a large extent knowledge is generally a private good.

Accepted Answer

A) True 
 B)False

Question 3

In 2008, the typical Bangladeshi had about

Accepted Answer

A)   1/5 the real income of a typical American a century ago.
B)   1/3 the real income of a typical American a century ago.
C)   2 times as much real income as that of a typical American a century ago.
D)   4 times as much real income as that of a typical American a century ago.E) B) and D)
F) A) and C)

Question 4

The population growth rate tends to be higher in developed countries than in developing countries.

Accepted Answer

A) True 
 B)False

Question 5

In the long run, an increase in the saving rate

Accepted Answer

A)   doesn't change the level of productivity or income.
B)   raises the levels of both productivity and income.
C)   raises the level of productivity but not the level of income.
D)   raises the level of income but not the level of productivity.E) A) and B)
F) B) and C)

Question 6

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Accepted Answer

A)   both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia.
B)   both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia.
C)   both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia.
D)   both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.E) B) and D)
F) All of the above

Question 7

In 2009, the imaginary nation of Florastan had a population of 8,300 and real GDP of 190,900. Florastan had 5% growth in real GDP per person. In 2010 it had a population of 8,400. What was real GDP in Florastan in 2010?

Accepted Answer

A)   200,445
B)   202,860
C)   198,059
D)   None of the above is correct.E) C) and D)
F) A) and B)

Question 8

If a country increases its saving rate in the long run

Accepted Answer

A)   K/L and productivity will be higher.
B)   K/L will be higher but productivity will not be higher.
C)   K/L will not be higher but productivity will be higher.
D)   neither K/L nor productivity will be higher.E) B) and D)
F) None of the above

Question 9

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units. This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units. This country's productivity was

Accepted Answer

A)   higher this year than last year. A possible source of this change in productivity is a change in the size of the capital stock.
B)   higher this year than last year. A change in the size of the capital stock does not affect productivity.
C)   lower this year than last year. A possible source of this change in productivity is a change in the size of the capital stock.
D)   lower this year than last year. A change in the size of the capital stock does not affect productivity.E) C) and D)
F) A) and D)

Question 10

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Accepted Answer

A)   The poor country has outward-oriented trade policies.
B)   The poor country allows foreign direct investment.
C)   The poor country has poorly developed property rights.
D)   All of the above are correct.E) C) and D)
F) B) and D)

Question 11

In an economy where net exports are zero, if saving rises in some period, then in that period

Accepted Answer

A)   consumption and investment fall.
B)   consumption falls and investment rises.
C)   consumption rises and investment falls
D)   consumption rises and investment falls.E) A) and B)
F) B) and D)

Question 12

If a country were to increase its saving rate, then in the long run it would also increase its

Accepted Answer

A)   level of income.
B)   growth rate of income.
C)   growth rate of productivity.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 13

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Accepted Answer

A)   India
B)   Mexico
C)   Senegal
D)   SingaporeE) C) and D)
F) B) and D)

Question 14

Roughly what percentage of growth in real GDP per person in Britain between 1790 and 1980 was accounted for by improved nutrition according to the estimates of Robert Fogel?

Accepted Answer

A)   30 percent
B)   20 percent
C)   10 percent
D)   5 percentE) A) and D)
F) A) and C)

Question 15

Other things the same, higher population growth

Accepted Answer

A)   raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress.
B)   raises the amount of physical capital per worker, but there is some evidence that it reduces the pace of technological progress.
C)   reduces the amount of physical capital per worker, but there is some evidence that it raises the pace of technological progress.
D)   reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress.E) A) and B)
F) B) and C)

Question 16

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)   10 percent
B)   14 percent
C)   17 percent
D)   21 percentE) B) and C)
F) A) and B)

Question 17

Over extended periods of time, population growth

Accepted Answer

A)   has no effect on the standard of living.
B)   has uncertain effects on the standard of living.
C)   clearly raises the standard of living.
D)   clearly lowers the standard of living.E) A) and D)
F) B) and C)

Question 18

Historically, the market prices of most natural resources (adjusted for inflation)  have

Accepted Answer

A)   increased.
B)   remained stable.
C)   remained stable or decreased.
D)   decreased.E) B) and C)
F) A) and B)

Question 19

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 20

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Accepted Answer

A)   Popeye's production and productivity are greater than Wimpy's.
B)   Popeye's production is greater than Wimpy's, but his productivity is less.
C)   Wimpy's production and productivity are greater than Popeye's.
D)   Wimpy's production is greater than Popeye's, but his productivity is less.E) A) and C)
F) B) and D)

Exam 7: Production and Growth

If a country increases its saving rate in the long run

Correct AnswerverifiedShow Answer

Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that

Correct AnswerverifiedShow Answer

A forest is an example of a nonrenewable resource.

Correct AnswerverifiedShow Answer

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units. This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units. This country's productivity was

Correct AnswerverifiedShow Answer

Popeye produces 20 cans of spinach in 8 hours. Wimpy produces 15 hamburgers in 10 hours. If each hamburger trades for 1.5 cans of spinach, then

Correct AnswerverifiedShow Answer

One reason that governments may find it useful to sponsor universities and basic research is that to a large extent knowledge is generally a private good.

Correct AnswerverifiedShow Answer

Other things the same, higher population growth

Correct AnswerverifiedShow Answer

In 2008, the typical Bangladeshi had about

Correct AnswerverifiedShow Answer

In an economy where net exports are zero, if saving rises in some period, then in that period

Correct AnswerverifiedShow Answer

Historically, the market prices of most natural resources (adjusted for inflation) have

Correct AnswerverifiedShow Answer

Roughly what percentage of growth in real GDP per person in Britain between 1790 and 1980 was accounted for by improved nutrition according to the estimates of Robert Fogel?

Correct AnswerverifiedShow Answer

Which of the following statements about inputs is correct?

Correct AnswerverifiedShow Answer

In which of the following countries has economic growth been sufficiently strong in recent history to propel that country from being among the poorest in the world to being among the richest in the world?

Correct AnswerverifiedShow Answer

In 2009, the imaginary nation of Florastan had a population of 8,300 and real GDP of 190,900. Florastan had 5% growth in real GDP per person. In 2010 it had a population of 8,400. What was real GDP in Florastan in 2010?

Correct AnswerverifiedShow Answer

The population growth rate tends to be higher in developed countries than in developing countries.

Correct AnswerverifiedShow Answer

If a country were to increase its saving rate, then in the long run it would also increase its

Correct AnswerverifiedShow Answer

Last year real GDP in the imaginary nation of Populia was 907.5 billion and the population was 3.3 million. The year before real GDP was 750 billion and the population was 3 million. What was the growth rate of real GDP per person during the year?

Correct AnswerverifiedShow Answer

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up?

Correct AnswerverifiedShow Answer

In the long run, an increase in the saving rate

Correct AnswerverifiedShow Answer

Over extended periods of time, population growth

Correct AnswerverifiedShow Answer

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