Question 1

Suppose a country increases trade restrictions. This country would be pursing an

Accepted Answer

A)  inward policy, which most economists believe has beneficial effects on the economy.
B)  inward policy, which most economists believe has adverse effects on the economy.
C)  outward policy, which most economists believe has beneficial effects on the economy.
D)  outward policy, which most economists believe has adverse effects on the economy.E) A) and B)
F) B) and D)

Question 2

If a production function has constant returns to scale, then if all inputs double so does production.

Accepted Answer

A) True 
 B)False

Question 3

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

A) True 
 B)False

Question 4

Natural resources

Accepted Answer

A)  are inputs provided by nature.
B)  include land, rivers, and mineral deposits.
C)  take two forms: renewable and nonrenewable.
D)  All of the above are correct.E) B) and C)
F) A) and D)

Question 5

In the equation for the production function Y/L represents

Accepted Answer

A)  productivity.
B)  output.
C)  the availability of natural resources.
D)  the amount of human capital.E) A) and B)
F) All of the above A

Question 6

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to increase barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies would most economist think would promote growth?

Accepted Answer

A)  both the first and the second
B)  the first but not the second
C)  the second but not the first
D)  neither the first nor the secondE) A) and B)
F) A) and C)

Question 7

If natural resources had become scarcer, then we would expect their

Accepted Answer

A)  prices to have risen more than inflation as they have.
B)  prices to have risen more than inflation, but they have not.
C)  known quantities to have fallen as they have.
D)  known quantities to have fallen but they have not.E) A) and C)
F) B) and D)

Question 8

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Accepted Answer

A)  housing
B)  healthcare
C)  life expectancy
D)  All of the above.E) B) and D)
F) All of the above

Question 9

Proprietary technology is knowledge that is

Accepted Answer

A)  known but no longer used much.
B)  known, but only recently discovered.
C)  known mostly by only those in a certain profession.
D)  known only by the company that discovered it.E) B) and D)
F) A) and B)

Question 10

Over the last 140 years or so, on average Canada's real GDP per-person grew faster than that of the U.K.

Accepted Answer

A) True 
 B)False  True

Question 11

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment would

Accepted Answer

A)  increase U.S. GNP more than it would increase U.S. GDP.
B)  increase U.S. GDP more than it would increase U.S. GNP.
C)  not affect U.S. GNP, but would increase U.S. GDP.
D)  have no affect on U.S. GNP or GDP.E) All of the above
F) C) and D)

Question 12

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) None of the above
F) A) and B)

Question 13

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

A)  2 percent.
B)  5 percent.
C)  10 percent.
D)  15 percent.E) All of the above
F) A) and B)

Question 14

In which of the following cases can we be certain that a natural resource has become scarcer?

Accepted Answer

A)  both the demand for the resource and the supply of the resource have increased
B)  both the demand for the resource and the supply of the resource have decreased
C)  demand for the resource is unchanged and the supply of the resource has increased
D)  the demand for the resource has decreased and the supply of the resource is unchangedE) A) and C)
F) A) and B) D

Question 15

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in

Accepted Answer

A)  one generation. In the last couple of decades China's growth rate has been higher than 8%.
B)  one generation. However, in the last couple of decades not even China's growth rate has been this high.
C)  three generations. In the last couple of decades China's growth rate has been higher than 8%.
D)  three generations. However, in the last couple of decades not even China's growth rate has been this high.E) None of the above
F) All of the above

Question 16

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year?

Accepted Answer

A)  12 percent
B)  10 percent
C)  4 percent
D)  2 percentE) B) and C)
F) A) and D)

Question 17

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) C) and D)
F) A) and D)

Question 18

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in

Accepted Answer

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

Question 19

Haley discovers a new way to design automobile engines so that they use less gasoline. Haley's finding is an example of

Accepted Answer

A)  physical capital. If Haley's discovery leads to lower gasoline prices, it has made gasoline less scarce.
B)  physical capital. If Haley's discovery leads to lower gasoline prices, it has made gasoline scarcer.
C)  technological knowledge. If Haley's discovery leads to lower gasoline prices, it has made gasoline less scarce.
D)  technological knowledge. If Haley's discovery leads to lower gasoline prices, it has made gasoline scarcer.E) B) and C)
F) A) and C)

Question 20

Productivity is the amount of goods and services

Accepted Answer

A)  an economy produces. It is not linked to a nation's economic policies.
B)  an economy produces. It is linked to a nation's economic policies.
C)  produced for each hour of a worker's time. It is not linked to a nation's economic policies.
D)  produced for each hour of a worker's time. It is linked to a nation's economic policies.E) A) and B)
F) A) and C)

Exam 12: Production and Growth

Suppose a country increases trade restrictions. This country would be pursing an

Correct AnswerverifiedShow Answer

If a production function has constant returns to scale, then if all inputs double so does production.

Correct AnswerverifiedShow Answer

Economist Michael Kremer found that world growth rates fell as population increased.

Correct AnswerverifiedShow Answer

Natural resources

Correct AnswerverifiedShow Answer

In the equation for the production function Y/L represents

Correct AnswerverifiedA

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to increase barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies would most economist think would promote growth?

Correct AnswerverifiedShow Answer

If natural resources had become scarcer, then we would expect their

Correct AnswerverifiedShow Answer

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

Correct AnswerverifiedShow Answer

Proprietary technology is knowledge that is

Correct AnswerverifiedShow Answer

Over the last 140 years or so, on average Canada's real GDP per-person grew faster than that of the U.K.

Correct AnswerverifiedTrue

Suppose Japanese-based Toshiba Corporation builds and operates a new computer factory in the United States. Future production from such an investment would

Correct AnswerverifiedShow Answer

Other things the same, higher population growth

Correct AnswerverifiedShow Answer

In the U.S., each additional year of schooling has historically raised a person's wage on average by about

Correct AnswerverifiedShow Answer

In which of the following cases can we be certain that a natural resource has become scarcer?

Correct AnswerverifiedD

A country experiencing a growth rate of 8% per year can go from being one of the poorest to one of the richest in

Correct AnswerverifiedShow Answer

Last year real GDP in the imaginary nation of Oceania was 561.0 billion and the population was 2.2 million. The year before, real GDP was 500.0 billion and the population was 2.0 million. What was the growth rate of real GDP per person during the year?

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

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in

Correct AnswerverifiedShow Answer

Haley discovers a new way to design automobile engines so that they use less gasoline. Haley's finding is an example of

Correct AnswerverifiedShow Answer

Productivity is the amount of goods and services

Correct AnswerverifiedShow Answer

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