Chapter 12

Which of the following statements is true?

Countries have great variance in both the level and growth rate of income per person; thus, poor countries can become relatively rich over time

When a nation has very little income per person,

it has the potential to grow relatively quickly due to the "catch-up effect."

Copper is an example of

nonrenewable natural resource

China, Japan, and Brazil are growing very quickly because

they save and invest an unusually high percentage of their real income

If a production function exhibits constant returns to scale,

doubling all of the inputs doubles output.

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

There is no evidence yet that rapid population growth stretches natural resources to the point that it limits growth in productivity. Rapid population growth may dilute the capital stock, lowering productivity. Rapid population growth may promote technological progress, increasing productivity.

The opportunity cost of growth is

a reduction in current consumption.

Once a country is wealthy,

it may be harder for it to grow quickly because of the diminishing returns to capital

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

labor

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

real income per person