Question 1

The only factor of production that is not "produced" is natural resources.

Accepted Answer

A) True 
 B)False

Question 2

In poorer countries, some investments in human capital may not be made because

Accepted Answer

A)   of shortages of water and other natural resources.
B)   families need their children to work to grow food and/or to earn income.
C)   investment in physical capital is more important.
D)   they rarely lead to long-term economic growth.E) C) and D)
F) A) and B)

Question 3

Thomas Malthus argued that

Accepted Answer

A)   population growth in the future would be subject to diminishing returns
B)   an ever increasing population is constrained only by the food supply, resulting in chronic famines.
C)   technological progress will continuously generate improvements in productivity and living standards.
D)   labour is the only true factor of production.
E)   private charities and government aid will improve the welfare of the poor.F) All of the above
G) A) and E)

Question 4

An increase in the capital stock causes labour productivity to

Accepted Answer

A)   decrease and the standard of living to increase.
B)   increase and the standard of living to increase.
C)   decrease and the standard of living to decrease.
D)   increase while the standard of living remains constant.E) All of the above
F) None of the above

Question 5

A result of having rapid population growth in a poor country such as Bangladesh is

Accepted Answer

A)   loss of the country's customs and traditions.
B)   having more hands to help in agricultural production.
C)   larger tax revenues that will be collected by the government from families.
D)   difficulty in providing workers with the tools and skills they need to achieve high levels of productivity.E) A) and B)
F) A) and C)

Question 6

A key benefit of foreign direct investment to poorer countries is

Accepted Answer

A)   they gain all the returns on such investment.
B)   that such investment is very reliable.
C)   they avoid the need to have their own stock market.
D)   they gain state-of-the-art technological knowledge.E) All of the above
F) A) and C)

Question 7

Per capita real GDP differs from per capita nominal GDP in that real GDP

Accepted Answer

A)   measures the opportunity cost of growth.
B)   has been adjusted for the time value of money.
C)   has been adjusted for inflation.
D)   has been discounted to the present.E) None of the above
F) A) and B)

Question 8

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Accepted Answer

Since bearing a child has an opportunity...

Question 9

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 10

Education might lead to someone coming up with an improved method of producing some particular good that is then taken up by all producers of that good. This is an example of

Accepted Answer

A)   productivity.
B)   a patent.
C)   a positive externality.
D)   the brain drain.E) None of the above
F) B) and C)

Question 11

Why does a nation's standard of living depend on property rights?

Accepted Answer

Property rights are an important prerequ...

Question 12

The opportunity cost of additional growth is that someone must forgo current consumption.

Accepted Answer

A) True 
 B)False

Question 13

Many East Asian countries are growing very quickly because

Accepted Answer

A)   they save and invest an unusually high percentage of their GDP.
B)   they have always been wealthy and will continue to be wealthy, which is known as the "snowball effect."
C)   they are imperialists and have collected wealth from previous victories in war.
D)   they have enormous natural resources.E) C) and D)
F) A) and B)

Question 14

Poor countries are poor for all of the following reasons except

Accepted Answer

A)   their technology is less than modern.
B)   their labour productivity is low.
C)   foreign investment funds are difficult to attract.
D)   their labour force is too small.E) A) and B)
F) A) and C)

Question 15

Data on growth rates and investment suggest that

Accepted Answer

A)   there is no correlation between investment and economic growth.
B)   high investment leads to more rapid economic growth.
C)   high growth countries invest less than slower growing countries.
D)   growth rates are constant over time.E) B) and D)
F) B) and C)

Question 16

Which of the following statements is true?

Accepted Answer

A)   Countries all have the same growth rate and level of output because any country can obtain the same factors of production.
B)   Countries have great variance in both the level and growth rate of GDP/person; thus, poor countries can become relatively rich over time.
C)   Countries may have a different level of GDP/person but they all grow at the same rate.
D)   Countries may have a different growth rate but they all have the same level of GDP/person.E) C) and D)
F) B) and D)

Question 17

Ownership of natural resources is not necessary for an economy to be highly productive because

Accepted Answer

A)   productivity depends only on human capital.
B)   productivity depends only on the quantity of labour a country has.
C)   natural resources can be acquired through international trade.
D)   natural resources are less important than a country's stock of capital goods.E) A) and C)
F) C) and D)

Question 18

The rate of economic growth is probably underestimated.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an example of foreign portfolio investment?

Accepted Answer

A)   Toyota builds a new plant in the north of England.
B)   EDF of France buys shares in Scottish & Southern Energy of the UK.
C)   Deutsche Bank of Germany buys some new software from a UK supplier.
D)   JCB builds a new plant near Manchester.
E)   None of these answers.F) C) and E)
G) B) and D)

Question 20

An increase in capital should cause the growth rate of a relatively poor country to increase more than that of a rich country.

Accepted Answer

A) True 
 B)False

Exam 22: Production and Growth

In poorer countries, some investments in human capital may not be made because

Correct Answer
verified

Education might lead to someone coming up with an improved method of producing some particular good that is then taken up by all producers of that good. This is an example of

Correct Answer
verified

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

Why does a nation's standard of living depend on property rights?

Correct Answer
verified
Property rights are an important prerequ...
View Answer

The only factor of production that is not "produced" is natural resources.

Correct Answer
verified

Many East Asian countries are growing very quickly because

Correct Answer
verified

A result of having rapid population growth in a poor country such as Bangladesh is

Correct Answer
verified

The rate of economic growth is probably underestimated.

Correct Answer
verified

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Correct Answer
verified
Since bearing a child has an opportunity...
View Answer

A key benefit of foreign direct investment to poorer countries is

Correct Answer
verified

Poor countries are poor for all of the following reasons except

Correct Answer
verified

Per capita real GDP differs from per capita nominal GDP in that real GDP

Correct Answer
verified

An increase in capital should cause the growth rate of a relatively poor country to increase more than that of a rich country.

Correct Answer
verified

An increase in the capital stock causes labour productivity to

Correct Answer
verified

Ownership of natural resources is not necessary for an economy to be highly productive because

Correct Answer
verified

Which of the following is an example of foreign portfolio investment?

Correct Answer
verified

Data on growth rates and investment suggest that

Correct Answer
verified

Thomas Malthus argued that

Correct Answer
verified

The opportunity cost of additional growth is that someone must forgo current consumption.

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Exam 22: Production and Growth

In poorer countries, some investments in human capital may not be made because

Correct AnswerverifiedShow Answer

Education might lead to someone coming up with an improved method of producing some particular good that is then taken up by all producers of that good. This is an example of

Correct AnswerverifiedShow Answer

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

Why does a nation's standard of living depend on property rights?

Correct AnswerverifiedProperty rights are an important prerequ...View AnswerShow Answer

The only factor of production that is not "produced" is natural resources.

Correct AnswerverifiedShow Answer

Many East Asian countries are growing very quickly because

Correct AnswerverifiedShow Answer

A result of having rapid population growth in a poor country such as Bangladesh is

Correct AnswerverifiedShow Answer

The rate of economic growth is probably underestimated.

Correct AnswerverifiedShow Answer

Some economists argue that it is possible to raise the standard of living by reducing population growth. As an economist interested in incentives rather than coercion, what kind of policy would you recommend to slow population growth?

Correct AnswerverifiedSince bearing a child has an opportunity...View AnswerShow Answer

A key benefit of foreign direct investment to poorer countries is

Correct AnswerverifiedShow Answer

Poor countries are poor for all of the following reasons except

Correct AnswerverifiedShow Answer

Per capita real GDP differs from per capita nominal GDP in that real GDP

Correct AnswerverifiedShow Answer

An increase in capital should cause the growth rate of a relatively poor country to increase more than that of a rich country.

Correct AnswerverifiedShow Answer

An increase in the capital stock causes labour productivity to

Correct AnswerverifiedShow Answer

Ownership of natural resources is not necessary for an economy to be highly productive because

Correct AnswerverifiedShow Answer

Which of the following is an example of foreign portfolio investment?

Correct AnswerverifiedShow Answer

Data on growth rates and investment suggest that

Correct AnswerverifiedShow Answer

Thomas Malthus argued that

Correct AnswerverifiedShow Answer

The opportunity cost of additional growth is that someone must forgo current consumption.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
Property rights are an important prerequ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Since bearing a child has an opportunity...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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