Question 1

The logic behind the catch-up effect is that

Accepted Answer

A)   workers in countries with low incomes will work more hours than workers in countries with high incomes.
B)   the capital stock in rich countries deteriorates at a higher rate because it already has a lot of capital.
C)   new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital.
D)   None of the above is correct.E) A) and B)
F) B) and C)

Question 2

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Accepted Answer

A)   The growth rate of output does not change.
B)   The growth rate of output increases and gets even larger as time passes.
C)   The growth rate of output increases and does not change as time passes.
D)   The growth rate of output increases, but diminishes to its former level as time passes.E) All of the above
F) B) and D)

Question 3

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Accepted Answer

A)   in the short run, but not in the long run.
B)   in the long run, but not in the short run.
C)   in both the short run and the long run.
D)   in neither the short run nor the long run.E) C) and D)
F) A) and B)

Question 4

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is considered human capital? Knowledge acquired from

Accepted Answer

A)   early childhood education programs
B)   job training
C)   on-the-job experience
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 6

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Accepted Answer

A)   Ethiopia
B)   the United States
C)   Canada
D)   South KoreaE) All of the above
F) C) and D)

Question 7

Which of the following is an example of a nonrenewable natural resource?

Accepted Answer

A)   tin
B)   petroleum
C)   gold
D)   All of the above are correct.E) A) and D)
F) None of the above

Question 8

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Accepted Answer

A)   reduce real GDP per person and productivity.
B)   reduce real GDP per person but not productivity.
C)   reduce productivity but not real GDP per person.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 9

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled
And all other inputs stayed the same, then real GDP would

Accepted Answer

A)   stay the same.
B)   increase by exactly 50 percent.
C)   increase by exactly 100 percent.
D)   increase, but not necessarily by either 50 percent or 100 percent.E) A) and B)
F) A) and C)

Question 10

Among the following countries, which one has the highest growth rate of real GDP per person over about the last 100 years?

Accepted Answer

A)   Argentina
B)   Mexico
C)   the United Kingdom
D)   the United StatesE) A) and B)
F) None of the above

Question 11

Patents turn new ideas into

Accepted Answer

A)   public goods, and increase the incentive to engage in research.
B)   public goods, but decrease the incentive to engage in research.
C)   private goods, and increase the incentive to engage in research.
D)   private goods, but decrease the incentive to engage in research.E) B) and C)
F) A) and C)

Question 12

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Accepted Answer

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

Question 13

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Accepted Answer

A)   both output and productivity
B)   output, but not productivity
C)   productivity, but not output
D)   neither productivity nor outputE) A) and B)
F) A) and C)

Question 14

Which of the following is a part of your economics professor's human capital?

Accepted Answer

A)   the things she learned at some prestigious university
B)   her copy of Mankiw's text
C)   her chalk holder
D)   All of the above are correct.E) All of the above
F) None of the above

Question 15

In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000. In 2013 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?

Accepted Answer

A)   -2.2 percent
B)   -0.7 percent
C)   2.2 percent
D)   4.5 percentE) A) and B)
F) A) and C)

Question 16

Mexico is

Accepted Answer

A)   a poor country, and over the past century its rate of economic growth has been higher than that of the United States.
B)   a poor country, and over the past century its rate of economic growth has been lower than that of the United States.
C)   a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States.
D)   a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.E) None of the above
F) All of the above

Question 17

When Chile experiences investment from abroad, it experiences, as a result,

Accepted Answer

A)   an increase in productivity.
B)   a decrease in Gross National Product GNP) .
C)   lower wages for Chilean workers.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 18

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has more capital per worker and so it has more real GDP per worker than the other. Finally, suppose that the saving rate in both countries increases from 4 percent to 7 percent. Over the next ten years we would expect that

Accepted Answer

A)   the growth rate will not change in either country.
B)   the country that started with less capital per worker will grow faster.
C)   the country that started with more capital per worker will grow faster.
D)   both countries will grow and at the same higher rate.E) A) and D)
F) B) and D)

Question 20

Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked remained the same in both countries. It follows that

Accepted Answer

A)   real GDP per person grew faster in Mapoli than in Romeria.
B)   real GDP per person must be higher in Mapoli than in Romeria.
C)   the standard of living must be higher in Mapoli than in Romeria.
D)   All of the above are correct.E) B) and C)
F) All of the above

Exam 7: Production and Growth

Correct Answer
verified

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct Answer
verified

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Correct Answer
verified

Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked remained the same in both countries. It follows that

Correct Answer
verified

Which of the following is a part of your economics professor's human capital?

Correct Answer
verified

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct Answer
verified

An economy's production function has the constantreturnstoscale property. If the economy's labor force doubled And all other inputs stayed the same, then real GDP would

Correct Answer
verified

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Correct Answer
verified

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Correct Answer
verified

The logic behind the catch-up effect is that

Correct Answer
verified

Which of the following is considered human capital? Knowledge acquired from

Correct Answer
verified

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Correct Answer
verified

Which of the following is an example of a nonrenewable natural resource?

Correct Answer
verified

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Correct Answer
verified

Mexico is

Correct Answer
verified

Patents turn new ideas into

Correct Answer
verified

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Correct Answer
verified

When Chile experiences investment from abroad, it experiences, as a result,

Correct Answer
verified

In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000. In 2013 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?

Correct Answer
verified

Among the following countries, which one has the highest growth rate of real GDP per person over about the last 100 years?

Correct Answer
verified

Exam 7: Production and Growth

Correct AnswerverifiedShow Answer

The dictator of a country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would

Correct AnswerverifiedShow Answer

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

Correct AnswerverifiedShow Answer

Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked remained the same in both countries. It follows that

Correct AnswerverifiedShow Answer

Which of the following is a part of your economics professor's human capital?

Correct AnswerverifiedShow Answer

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Correct AnswerverifiedShow Answer

An economy's production function has the constant­returns­to­scale property. If the economy's labor force doubled And all other inputs stayed the same, then real GDP would

Correct AnswerverifiedShow Answer

Suppose an economy experiences an increase in its saving rate. The higher saving rate leads to a higher growth rate of productivity

Correct AnswerverifiedShow Answer

Which of the following best describes the response of output as time passes to an increase in the saving rate?

Correct AnswerverifiedShow Answer

The logic behind the catch-up effect is that

Correct AnswerverifiedShow Answer

Which of the following is considered human capital? Knowledge acquired from

Correct AnswerverifiedShow Answer

Suppose there are constant returns to scale. Now suppose that over time a country doubles its workers, its natural resources, its physical capital, and its human capital, but its technology is unchanged. Which of the following would double?

Correct AnswerverifiedShow Answer

Which of the following is an example of a nonrenewable natural resource?

Correct AnswerverifiedShow Answer

Indonesians, for example, have a lower standard of living than Americans because they have a lower level of productivity.

Correct AnswerverifiedShow Answer

Mexico is

Correct AnswerverifiedShow Answer

Patents turn new ideas into

Correct AnswerverifiedShow Answer

In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans who did this engaged in

Correct AnswerverifiedShow Answer

When Chile experiences investment from abroad, it experiences, as a result,

Correct AnswerverifiedShow Answer

In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000. In 2013 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?

Correct AnswerverifiedShow Answer

Among the following countries, which one has the highest growth rate of real GDP per person over about the last 100 years?

Correct AnswerverifiedShow Answer

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An economy's production function has the constantreturnstoscale property. If the economy's labor force doubled And all other inputs stayed the same, then real GDP would

Correct Answer
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Correct Answer
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