Question 1

Natural resources:

Accepted Answer

A)  are production inputs that come from the earth.
B)  are natural talents people are born with that make them productive.
C)  are physical structures that sit on the earth,improving it and making it more productive.
D)  None of these is true.E) A) and B)
F) All of the above

Question 2

Rapid economic growth:

Accepted Answer

A)  is a modern phenomenon,happening only in the last century or two.
B)  has happened in various places around the world since the 1300s.
C)  has occurred since 1500,but backsliding has prevented real growth.
D)  is a modern phenomenon,happening only in the last decade or two.E) A) and C)
F) A) and D)

Question 3

We can roughly estimate how long it will take a country to double its real GDP per capita using the:

Accepted Answer

A)  rule of 70.
B)  rule of 60.
C)  growth estimator.
D)  GDP deflator.E) C) and D)
F) None of the above

Question 4

A phenomenon called Moore's law says:

Accepted Answer

A)  computing capacity has doubled every two years.
B)  physical capital will double every two years in countries with high rates of growth.
C)  70 divided by the growth rate equals how long it will take a country to double its income level.
D)  70 divided by the growth rate equals how long it will take a country to double its productive capacity.E) A) and B)
F) A) and C)

Question 5

In the United States:

Accepted Answer

A)  about $400 billion a year goes into research and development.
B)  about $500 billion a year goes into research and development.
C)  about $200 billion a year goes into research and development.
D)  about $300 billion a year goes into research and development.E) B) and C)
F) None of the above

Question 6

The trade-off between physical capital and current consumption:

Accepted Answer

A)  is harder for poorer countries than rich ones.
B)  is easier for poorer countries than rich ones.
C)  involves giving up less current consumption for poor countries,since they have little.
D)  involves giving up more current consumption for rich countries,since they have so much.E) A) and B)
F) C) and D)

Question 7

When looking at real world data,we see that:

Accepted Answer

A)  the convergence theory holds nearly universally.
B)  the convergence theory holds for some countries,but not others.
C)  the convergence theory does not hold empirically.
D)  the convergence theory was proved false.E) B) and D)
F) A) and B)

Question 8

Increases in productivity per person lead to increases in per capita income,which we call:

Accepted Answer

A)  economic growth.
B)  GDP per capita.
C)  the GDP deflator.
D)  the producer productivity index.E) B) and C)
F) A) and B)

Question 9

When Skippy the sailor forgets how to tie a slip knot:

Accepted Answer

A)  his human capital decreases.
B)  his human capital increases.
C)  his human capital is unaffected.
D)  None of these is true.E) A) and C)
F) B) and D)

Question 10

Where does the money for investment in physical capital come from?

Accepted Answer

A)  It largely comes from the savings of ordinary households.
B)  It largely comes from government subsidies.
C)  It largely comes from the reinvestment of funds from businesses.
D)  It largely comes from donation by foreign countries.E) A) and D)
F) A) and C)

Question 11

Output per person on a country level is another way to think about:

Accepted Answer

A)  real GDP per capita.
B)  nominal GDP.
C)  productivity.
D)  GDP growth rates.E) All of the above
F) None of the above

Question 12

Many governments are currently investing in:

Accepted Answer

A)  more roadways.
B)  communications infrastructure.
C)  more ports,given the growing importance of international business.
D)  All of these are true.E) C) and D)
F) B) and D)

Question 13

The growth rate of real GDP per capita is best captured by:

Accepted Answer

A)  subtracting the percentage changes in both prices and population from the nominal GDP growth rate.
B)  subtracting the percentage changes in population from the nominal GDP growth rate,while dividing it by the inflation rate in order to hold prices constant.
C)  subtracting the percentage changes in prices from the nominal GDP growth rate.
D)  subtracting the percentage changes in population from the nominal GDP growth rate.E) None of the above
F) A) and B)

Question 14

In general,the number of years it will take for income to double at the current real growth rate is approximately:

Accepted Answer

A)  70 divided by the growth rate.
B)  50 divided by the growth rate.
C)  7 times the growth rate.
D)  5 times the growth rate.E) C) and D)
F) None of the above

Question 15

Household savings rates:

Accepted Answer

A)  were negative in the United States in 2005.
B)  were 38 percent in the United States in 2005.
C)  were fairly constant at about 5 percent in the United States from 2000 to 2010.
D)  have been roughly 15 percent in the United States for the last 30 years or so.E) C) and D)
F) A) and D)

Question 16

Foreign direct investment is:

Accepted Answer

A)  investment that occurs when a firm runs part of its operation abroad or invests in another company abroad.
B)  investment that occurs when a firm runs its operation domestically,and sells its product abroad.
C)  when foreign companies buy physical capital from the United States.
D)  when foreign companies buy and operate physical capital within the United States.E) A) and C)
F) A) and B)

Question 17

The productivity of workers can depend upon which of the following?

Accepted Answer

A)  Physical capital
B)  Number of humans
C)  Number of businesses established
D)  All of these are determinants of productivity.E) B) and C)
F) C) and D)

Question 18

Effective,stable leadership is essential to:

Accepted Answer

A)  economic growth.
B)  discourage foreign direct investment from taking hold in a country.
C)  increasing human capital.
D)  increasing population size.E) None of the above
F) All of the above

Question 19

A century ago,the average person in America completed only around ____ years of school;today,the average is more than _____ years of school.

Accepted Answer

A)  8;12
B)  4;8
C)  5;10
D)  6;12E) A) and B)
F) All of the above

Question 20

Countries that start with very little physical capital will get a:

Accepted Answer

A)  higher return from adding a unit of capital than a country that starts at a higher initial level will.
B)  lower return from adding a unit of capital than a country that starts at a higher initial level will.
C)  similar return from adding a unit of capital than a country that starts at a higher initial level will.
D)  higher return from adding a unit of capital the more natural resources they possess.E) A) and B)
F) B) and C)

Exam 26: Economic Growth

Household savings rates:

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Output per person on a country level is another way to think about:

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In general,the number of years it will take for income to double at the current real growth rate is approximately:

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When Skippy the sailor forgets how to tie a slip knot:

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When looking at real world data,we see that:

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Effective,stable leadership is essential to:

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Increases in productivity per person lead to increases in per capita income,which we call:

Correct AnswerverifiedShow Answer

The productivity of workers can depend upon which of the following?

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Countries that start with very little physical capital will get a:

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Natural resources:

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In the United States:

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We can roughly estimate how long it will take a country to double its real GDP per capita using the:

Correct AnswerverifiedShow Answer

A century ago,the average person in America completed only around ____ years of school;today,the average is more than _____ years of school.

Correct AnswerverifiedShow Answer

Many governments are currently investing in:

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Foreign direct investment is:

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Rapid economic growth:

Correct AnswerverifiedShow Answer

The growth rate of real GDP per capita is best captured by:

Correct AnswerverifiedShow Answer

The trade-off between physical capital and current consumption:

Correct AnswerverifiedShow Answer

A phenomenon called Moore's law says:

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Where does the money for investment in physical capital come from?

Correct AnswerverifiedShow Answer

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A century ago,the average person in America completed only around years of school;today,the average is more than _ years of school.

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