Question 1

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Accepted Answer

A) True 
 B)False

Question 2

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity.Which statement best explains this hypothesis?

Accepted Answer

A)   More people can produce more ideas,which contribute to increasing productivity.
B)   More people are able to produce more output,everything else being the same.
C)   A larger population implies more demand for goods and services,which stimulates the economy.
D)   When there is a large number of children,governments need to invest more in education,which fosters economic growth.E) All of the above
F) A) and B)

Question 3

Over the past century in Canada,by how much has average income grown as measured by real GDP per person?

Accepted Answer

A)   about 1 percent per year,which implies a doubling about every 70 years
B)   about 2 percent per year,which implies a doubling about every 35 years
C)   about 3.5 percent per year,which implies a doubling about every 20 years
D)   about 4 percent per year,which implies a doubling about every 17.5 yearsE) All of the above
F) B) and C)

Question 4

What is a correct way to measure productivity?

Accepted Answer

A)   divide the number of hours worked by output
B)   divide output by the number of hours worked
C)   divide the number of workers by output
D)   divide output by the number of workersE) A) and B)
F) A) and D)

Question 5

How is a nation's standard of living determined?

Accepted Answer

A)   by its productivity
B)   by its gross domestic product
C)   by its national income
D)   by the size of its labour forceE) C) and D)
F) B) and C)

Question 6

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982.What is the most likely explanation?

Accepted Answer

A)   a decrease in the growth of human capital per person
B)   capital wearing out so that capital per person fell
C)   changes in technological progress
D)   the continued depletion of natural resourcesE) All of the above
F) None of the above

Question 7

Suppose that there are diminishing returns to capital.Suppose also that two countries are the same except one has less capital,and so less real GDP per person.Suppose that both increase their saving rate from 3 percent to 4 percent.What will happen in the long run?

Accepted Answer

A)   Both countries will have permanently higher growth rates of real GDP per person,and the growth rate will be higher in the country with more capital.
B)   Both countries will have permanently higher growth rates of real GDP per person,and the growth rate will be higher in the country with less capital.
C)   Both countries will have higher levels of real GDP per person,and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital.
D)   Both countries will have higher levels of real GDP per person,and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital.E) A) and D)
F) A) and B)

Question 8

Economists generally believe that outward-oriented policies are more likely to foster growth than inward-oriented policies.

Accepted Answer

A) True 
 B)False

Question 9

Laurie works 8 hours and produces 7 units of goods per hour.Iris works 6 hours and produces 10 units of goods per hour.What can we conclude?

Accepted Answer

A)   Laurie's productivity and output are greater that Iris's.
B)   Laurie's productivity is greater than Iris's,but Laurie's output is less.
C)   Iris's productivity and output are greater than Laurie's.
D)   Iris's productivity is greater that Laurie's,but Iris's output is less.E) A) and C)
F) C) and D)

Question 10

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Accepted Answer

A) True 
 B)False

Question 11

The real GDP per capita in an economy increases at a rate of 2.6 percent.Calculate the number of years that it takes for real GDP to double.Assuming that the current GDP per capita is $40,000 and the growth rate will be on average 2.6 percent,how much will GDP per capita be after 10 years? After 20 years? After 30 years? Draw a graph to show approximately the evolution of this economy for the next 30 years.

Accepted Answer

Let us denote real GDP per capita by Y.A...

Question 12

The article "Are jobs obsolete?" by Douglas Rushkoff,Special to CNN September 7,2011,states the following (http: / / goo.gl / 0aUXL):
"According to the U.N.Food and Agriculture Organization,there is enough food produced to provide everyone in the world with 2,720 kilocalories per person per day.And that's even after America disposes of thousands of tons of crop and dairy just to keep market prices high.Meanwhile,American banks overloaded with foreclosed properties are demolishing vacant dwellings to get the empty houses off their books."
a)Is it true that "America disposes of thousands of tons of crop and diary to keep market prices high?" (Search for additional sources of information in this regard.)What would be the effect of such policies on economic growth?
b)If there is a surplus of commodities in the developed world,why is it not given in aid to poor countries? (You may need to look for further information to answer this question.)

Accepted Answer

a)During the Great Depression,companies ...

Question 13

International data on the history of real GDP growth rates show that the rich countries get richer and the poor countries get poorer.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following does Y / L refer to?

Accepted Answer

A)   productivity
B)   output
C)   the availability of capital technology
D)   the amount of human capitalE) A) and B)
F) B) and D)

Question 15

The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents,and he has given the farms to his friends.His friends don't know much about farming.The courts in Turan have ruled that the seizures are illegal,but the dictator has ignored the rulings.Other things equal,what would we expect to happen to the growth rate in Turan?

Accepted Answer

A)   It will fall temporarily,but will return to where it was when the new owners learn how to farm.
B)   It will increase because the total amount of human capital in the country will increase as the new owners learn how to farm.
C)   It will fall and remain lower for a long time because other farmers may expect their farms to be seized as well,and therefore they do not improve their farms.
D)   It will increase because friends can better cooperate with each other,avoiding wasteful competition.E) A) and C)
F) None of the above

Question 16

What is the effect of a higher saving rate in the long run?

Accepted Answer

A)   It decreases the capital stock.
B)   People must consume less in the future.
C)   It increases productivity.
D)   It leads to higher growth in real GDP.E) B) and C)
F) None of the above

Question 17

Suppose Mexico increases its saving rate.What will happen in the long run?

Accepted Answer

A)   The growth rates of productivity and real GDP per person will increase.
B)   Productivity and real GDP per person will increase.
C)   The growth rate of productivity will increase,and real GDP per person will increase.
D)   Productivity will increase,and the growth rate of real GDP per person will increase.E) A) and B)
F) A) and C)

Question 18

From 1960 to 1990,the ratio of investment to GDP in South Korea was higher than in Canada and so South Korea had substantially higher growth.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following goods does a patent turn a new idea into?

Accepted Answer

A)   a public good,which increases the incentive to engage in research
B)   a public good,which decreases the incentive to engage in research
C)   a private good,which increases the incentive to engage in research
D)   a private good,which decreases the incentive to engage in researchE) A) and D)
F) B) and C)

Question 20

Why do birth rates tend to be lower in developed countries than in developing countries?

Accepted Answer

A)   because people are older in developed countries
B)   because education is more expensive in developed countries
C)   because women with the opportunity to receive a good education and desirable employment tend to want fewer children
D)   because government policies in developing countries reward families with childrenE) A) and D)
F) A) and C)

Exam 7: Production and Growth

Correct Answer
verified
Let us denote real GDP per capita by Y.A...
View Answer

From 1960 to 1990,the ratio of investment to GDP in South Korea was higher than in Canada and so South Korea had substantially higher growth.

Correct Answer
verified

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Correct Answer
verified

Laurie works 8 hours and produces 7 units of goods per hour.Iris works 6 hours and produces 10 units of goods per hour.What can we conclude?

Correct Answer
verified

Which of the following does Y / L refer to?

Correct Answer
verified

Suppose that there are diminishing returns to capital.Suppose also that two countries are the same except one has less capital,and so less real GDP per person.Suppose that both increase their saving rate from 3 percent to 4 percent.What will happen in the long run?

Correct Answer
verified

How is a nation's standard of living determined?

Correct Answer
verified

Over the past century in Canada,by how much has average income grown as measured by real GDP per person?

Correct Answer
verified

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982.What is the most likely explanation?

Correct Answer
verified

Suppose Mexico increases its saving rate.What will happen in the long run?

Correct Answer
verified

Which of the following goods does a patent turn a new idea into?

Correct Answer
verified

Why do birth rates tend to be lower in developed countries than in developing countries?

Correct Answer
verified

Correct Answer
verified

International data on the history of real GDP growth rates show that the rich countries get richer and the poor countries get poorer.

Correct Answer
verified

Economists generally believe that outward-oriented policies are more likely to foster growth than inward-oriented policies.

Correct Answer
verified

What is the effect of a higher saving rate in the long run?

Correct Answer
verified

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity.Which statement best explains this hypothesis?

Correct Answer
verified

Correct Answer
verified
a)During the Great Depression,companies ...
View Answer

What is a correct way to measure productivity?

Correct Answer
verified

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Correct Answer
verified

Exam 7: Production and Growth

Correct AnswerverifiedLet us denote real GDP per capita by Y.A...View AnswerShow Answer

From 1960 to 1990,the ratio of investment to GDP in South Korea was higher than in Canada and so South Korea had substantially higher growth.

Correct AnswerverifiedShow Answer

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

Correct AnswerverifiedShow Answer

Laurie works 8 hours and produces 7 units of goods per hour.Iris works 6 hours and produces 10 units of goods per hour.What can we conclude?

Correct AnswerverifiedShow Answer

Which of the following does Y / L refer to?

Correct AnswerverifiedShow Answer

Suppose that there are diminishing returns to capital.Suppose also that two countries are the same except one has less capital,and so less real GDP per person.Suppose that both increase their saving rate from 3 percent to 4 percent.What will happen in the long run?

Correct AnswerverifiedShow Answer

How is a nation's standard of living determined?

Correct AnswerverifiedShow Answer

Over the past century in Canada,by how much has average income grown as measured by real GDP per person?

Correct AnswerverifiedShow Answer

There is some controversy concerning what the source of the Canadian productivity slowdown was in the period of 1974 to 1982.What is the most likely explanation?

Correct AnswerverifiedShow Answer

Suppose Mexico increases its saving rate.What will happen in the long run?

Correct AnswerverifiedShow Answer

Which of the following goods does a patent turn a new idea into?

Correct AnswerverifiedShow Answer

Why do birth rates tend to be lower in developed countries than in developing countries?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

International data on the history of real GDP growth rates show that the rich countries get richer and the poor countries get poorer.

Correct AnswerverifiedShow Answer

Economists generally believe that outward-oriented policies are more likely to foster growth than inward-oriented policies.

Correct AnswerverifiedShow Answer

What is the effect of a higher saving rate in the long run?

Correct AnswerverifiedShow Answer

Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity.Which statement best explains this hypothesis?

Correct AnswerverifiedShow Answer

Correct Answerverifieda)During the Great Depression,companies ...View AnswerShow Answer

What is a correct way to measure productivity?

Correct AnswerverifiedShow Answer

Indonesians have a lower standard of living than Canadians because they have a lower level of productivity.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Let us denote real GDP per capita by Y.A...
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
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a)During the Great Depression,companies ...
View Answer

Correct Answer
verified

Correct Answer
verified