Question 1

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

Accepted Answer

Property rights are an important prerequ...

Question 2

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

Question 3

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) B) and D)
F) B) and C)

Question 4

If a production function exhibits constant returns to scale, doubling all of the inputs

Accepted Answer

A)  more than doubles output due to the catch-up effect.
B)  has absolutely no impact on output because output is constant.
C)  less than doubles output due to diminishing returns.
D)  doubles output.E) B) and C)
F) None of the above

Question 5

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

Accepted Answer

Once someone comes up with an idea it is...

Question 6

Which of the following describes an increase in technological knowledge? A farmer

Accepted Answer

A)  sends his child to agricultural college and the child returns to work on the farm.
B)  hires another day labourer.
C)  buys another tractor.
D)  discovers that it is better to plant in the spring rather than in the autumn.E) A) and D)
F) B) and D)

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) All of the above
F) None of the above

Question 8

If Germans invest in the SA economy by building a new Volkswagen factory, in the future SA GDP will rise by more than SA GNP.

Accepted Answer

A) True 
 B)False

Question 9

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

Question 10

Compare and contrast the population theories of Thomas Malthus and Michael Kremer.

Accepted Answer

The difference is that Malthus predicted...

Question 11

If Toyota builds a new plant in the north of South Africa,

Accepted Answer

A)  there has been an increase in foreign portfolio investment in SA.
B)  once the plant starts producing cars SA GDP will rise less than SA GNP.
C)  once the plant starts producing cars SA GDP and GNP will both fall because some income from this investment will accrue to foreigners.
D)  once the plant starts producing cars SA GDP will rise more than SA GNP.E) A) and B)
F) A) and C)

Question 12

Human capital is

Accepted Answer

A)  the capital, such as machinery, owned by humans.
B)  the amount of physical capital per person in the economy.
C)  the knowledge and skills that individual people have.
D)  the capital that has been produced by humans.E) C) and D)
F) A) and C)

Question 13

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) All of the above
F) C) and D)

Question 14

An increase in the rate of saving and investment permanently increases a country's rate of growth.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements regarding the impact of population growth on productivity is true?

Accepted Answer

A)  There is no evidence, yet, that rapid population growth stretches natural resources to the point that it limits growth in productivity.
B)  All of these answers.
C)  Rapid population growth may dilute the capital stock, lowering productivity.
D)  Rapid population growth may promote technological progress, increasing productivity.E) None of the above
F) B) and C)

Question 16

Most economists believe that inward-oriented policies that protect infant industries improve the growth rates of developing nations.

Accepted Answer

A) True 
 B)False

Question 17

If 10 farmers generate R9 500 000 in real GDP, the output per worker would be

Accepted Answer

A)  R18 000
B)  R95 000
C)  R950 000
D)  R9 500 000E) All of the above
F) A) and D)

Question 18

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

Question 19

Inward-oriented policies hold back economic growth because

Accepted Answer

A)  international trade leads to lower domestic employment.
B)  they encourage the brain drain.
C)  infant industries are unable to compete with the rest of the world.
D)  they do not allow a country to take advantage of the gains from trade.E) B) and D)
F) None of the above

Question 20

An important link between politics and economics is that

Accepted Answer

A)  democracies are more productive than non-democracies.
B)  democracies must constantly make difficult budgetary choices.
C)  political instability is incompatible with long-term private investment.
D)  conservative governments tend to focus development on military industries.E) A) and B)
F) A) and C)

Exam 5: Production and Growth

An increase in the rate of saving and investment permanently increases a country's rate of growth.

Correct AnswerverifiedShow Answer

If 10 farmers generate R9 500 000 in real GDP, the output per worker would be

Correct AnswerverifiedShow Answer

Human capital is

Correct AnswerverifiedShow Answer

Many East Asian countries are growing very quickly because

Correct AnswerverifiedShow Answer

If a production function exhibits constant returns to scale, doubling all of the inputs

Correct AnswerverifiedShow Answer

If Germans invest in the SA economy by building a new Volkswagen factory, in the future SA GDP will rise by more than SA GNP.

Correct AnswerverifiedShow Answer

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

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

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology.Yet many economists believe that patents generate growth.Explain why.

Correct AnswerverifiedOnce someone comes up with an idea it is...View AnswerShow Answer

If Toyota builds a new plant in the north of South Africa,

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements regarding the impact of population growth on productivity is true?

Correct AnswerverifiedShow Answer

Which of the following describes an increase in technological knowledge? A farmer

Correct AnswerverifiedShow Answer

Compare and contrast the population theories of Thomas Malthus and Michael Kremer.

Correct AnswerverifiedThe difference is that Malthus predicted...View AnswerShow Answer

Inward-oriented policies hold back economic growth 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

Most economists believe that inward-oriented policies that protect infant industries improve the growth rates of developing nations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An important link between politics and economics is that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
Once someone comes up with an idea it is...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The difference is that Malthus predicted...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified