Question 1

To increase growth, governments should do all of the following except

Accepted Answer

A)  encourage foreigners to invest in your country.
B)  encourage saving and investment.
C)  nationalize major industries.
D)  encourage research and development.
E)  promote free trade.F) A) and C)
G) A) and B)

Question 2

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 3

Which of the following would decrease the likelihood that foreign business firms will invest in a country?

Accepted Answer

A)  A low corporate profit tax rate
B)  Political stability
C)  A well-established legal system
D)  Political instabilityE) A) and B)
F) All of the above

Question 4

What is the difference between human capital and technology?

Accepted Answer

Technology is society's understanding of...

Question 5

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

Question 6

Thomas Malthus's predictions turned out to be wrong due to

Accepted Answer

A)  technological advances such as those during the Industrial Revolution.
B)  smaller populations now than in the time of Malthus.
C)  the effects of brain-drain.
D)  unlimited natural resources.E) A) and B)
F) A) and C) A

Question 7

Countries like South Korea and Singapore have shown tremendous growth rates in recent years because

Accepted Answer

A)  of diminishing returns.
B)  of the catch-up effect.
C)  of lower levels of domestic investment in recent years.
D)  they have limited international trade.E) B) and C)
F) B) and D)

Question 8

Which of the following government policies is least likely to increase growth in Africa?

Accepted Answer

A)  Increase expenditures on public education.
B)  Eliminate civil war.
C)  All of these answers would increase growth.
D)  Reduce restrictions on foreign capital investment.
E)  Increase restrictions on the importing of European tractors and electronics.F) D) and E)
G) C) and E) E

Question 9

The rate of economic growth is probably underestimated.

Accepted Answer

A) True 
 B)False

Question 10

A reasonable measure of the standard of living in a country is

Accepted Answer

A)  real GDP per capita.
B)  nominal GDP per person.
C)  real GDP.
D)  the growth rate of nominal GDP per person.
E)  nominal GDP.F) B) and C)
G) B) and D)

Question 11

If the capital stock increases faster than employment, then we would expect

Accepted Answer

A)  both output and labour productivity to rise.
B)  output to rise but labour productivity to fall.
C)  both output and labour productivity to fall.
D)  output to fall but labour productivity to rise.E) A) and B)
F) A) and C)

Question 12

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

Accepted Answer

A)  Toyota builds a new plant in the north of South Africa.
B)  The Bank of England buys shares in ESKOM.
C)  Deutsche Bank of Germany buys some new software from a SA supplier.
D)  SASOL builds a new oil refinery plant near Durban.
E)  None of these answers.F) None of the above
G) A) and B)

Question 13

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) B) and C)

Question 14

For a given level of technology, we should expect an increase in productivity within a nation when there is an increase in each of the following except

Accepted Answer

A)  labour.
B)  physical capital/worker.
C)  human capital/worker.
D)  natural resources/worker.E) B) and D)
F) A) and B) A

Question 15

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) B) and C)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Labour productivity, measuring the output per worker,

Accepted Answer

A)  increases with increases in technology.
B)  decreases with increases in technology.
C)  increases with increases in capital stock.
D)  is impossible to measure since so many workers are involved in the service sector.E) A) and B)
F) C) and D)

Question 18

Copper is an example of

Accepted Answer

A)  a renewable natural resource.
B)  human capital.
C)  physical capital.
D)  technology.
E)  a non-renewable natural resource.F) B) and C)
G) A) and D)

Question 19

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 C)
F) B) and D)

Question 20

Suppose in SA, real GDP/person in 2001 was r₁8 073 and real GDP/person in 2002 was r₁8 635, what was the growth rate of real output per person over this period?

Accepted Answer

A)  2.0 per cent
B)  3.1 per cent
C)  18.0 per cent
D)  18.6 percent
E)  5.62 per centF) A) and B)
G) All of the above

Exam 5: Production and Growth

To increase growth, governments should do all of the following except

Correct Answer
verified

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

Which of the following would decrease the likelihood that foreign business firms will invest in a country?

Correct Answer
verified

What is the difference between human capital and technology?

Correct Answer
verified
Technology is society's understanding of...
View 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 Answer
verified

Thomas Malthus's predictions turned out to be wrong due to

Correct Answer
verified
A

Countries like South Korea and Singapore have shown tremendous growth rates in recent years because

Correct Answer
verified

Which of the following government policies is least likely to increase growth in Africa?

Correct Answer
verified
E

The rate of economic growth is probably underestimated.

Correct Answer
verified

A reasonable measure of the standard of living in a country is

Correct Answer
verified

If the capital stock increases faster than employment, then we would expect

Correct Answer
verified

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

Correct Answer
verified

Poor countries are poor for all of the following reasons except

Correct Answer
verified

For a given level of technology, we should expect an increase in productivity within a nation when there is an increase in each of the following except

Correct Answer
verified
A

A key benefit of foreign direct investment to poorer countries is

Correct Answer
verified

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

Correct Answer
verified

Labour productivity, measuring the output per worker,

Correct Answer
verified

Copper is an example of

Correct Answer
verified

Data on growth rates and investment suggest that

Correct Answer
verified

Suppose in SA, real GDP/person in 2001 was r₁8 073 and real GDP/person in 2002 was r₁8 635, what was the growth rate of real output per person over this period?

Correct Answer
verified

Exam 5: Production and Growth

To increase growth, governments should do all of the following except

Correct AnswerverifiedShow Answer

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

Which of the following would decrease the likelihood that foreign business firms will invest in a country?

Correct AnswerverifiedShow Answer

What is the difference between human capital and technology?

Correct AnswerverifiedTechnology is society's understanding of...View AnswerShow 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

Thomas Malthus's predictions turned out to be wrong due to

Correct AnswerverifiedA

Countries like South Korea and Singapore have shown tremendous growth rates in recent years because

Correct AnswerverifiedShow Answer

Which of the following government policies is least likely to increase growth in Africa?

Correct AnswerverifiedE

The rate of economic growth is probably underestimated.

Correct AnswerverifiedShow Answer

A reasonable measure of the standard of living in a country is

Correct AnswerverifiedShow Answer

If the capital stock increases faster than employment, then we would expect

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Poor countries are poor for all of the following reasons except

Correct AnswerverifiedShow Answer

For a given level of technology, we should expect an increase in productivity within a nation when there is an increase in each of the following except

Correct AnswerverifiedA

A key benefit of foreign direct investment to poorer countries is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Labour productivity, measuring the output per worker,

Correct AnswerverifiedShow Answer

Copper is an example of

Correct AnswerverifiedShow Answer

Data on growth rates and investment suggest that

Correct AnswerverifiedShow Answer

Suppose in SA, real GDP/person in 2001 was r₁8 073 and real GDP/person in 2002 was r₁8 635, what was the growth rate of real output per person over this period?

Correct AnswerverifiedShow Answer

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
Technology is society's understanding of...
View Answer

Correct Answer
verified

Correct Answer
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A

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E

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A

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