Macro Ch 7

All else equal, if there are diminishing returns, then if a country raised its capital by 100 units last year and by 100 units this year, a. the increase in output was greater for this year than last year. b. the increase in output was greater last year than this year. c. the increase in output is the same in both years. d. None of the above is necessarily correct.

b

Apple founder Steve Jobs received patents on many of his ideas. While the patents existed, his ideas were a. public goods and proprietary knowledge. b. private goods and proprietary knowledge. c. public goods but not proprietary knowledge. d. private goods, not proprietary knowledge

b

The return to schooling for society is higher than the return to schooling for the individual if a. the concept of diminishing returns applies to education. b. the concept of constant returns to scale applies to education. c. human capital conveys positive externalities. d. investment in human capital involves no opportunity costs.

c

Human capital is a. the same thing as technological knowledge. b. the same thing as labor. c. the tools and equipment operated by humans. d. knowledge and skills that workers have acquired.

d

Ralph is a plumber. Which of the following are included in his human capital? a. the knowledge he learned on the job, and the tools he uses b. the knowledge he learned on the job, but not the tools he uses c. the tools he uses, but not the knowledge he learned on the job d. neither the knowledge he learned on the job nor the tools he uses

b

Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct? a. Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. b. Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. c. Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. d. Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.

a

If a Japanese company opens a new factory in South Korea, it makes a. foreign direct investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. b. foreign direct investment. The factory will make a bigger impact on South Korea's GNP than on its GDP. c. foreign portfolio investment. The factory will make a bigger impact on South Korea's GDP than on its GNP. d. foreign portfolio investment. The factory will make a bigger impact on South Korea's GNP than on its GDP.

a

Other things the same, which of the following could explain an increase in productivity? a. either an increase in human capital or an increase in physical capital b. an increase in human capital but not an increase in physical capital c. an increase in physical capital but not an increase in human capital d. neither an increase in human capital nor an increase in physical capital

a

Over the last ten years productivity grew faster in Mapoli than in Romeria while the population and total hours worked remained the same in both countries. It follows that a. real GDP per person grew faster in Mapoli than in Romeria. b. real GDP per person must be higher in Mapoli than in Romeria. c. the standard of living must be higher in Mapoli than in Romeria. d. All of the above are correct.

a

*graph with a curved line increasing at a decreasing rate* The shape of the curve is consistent with which of the following statements about the economy to which the curve applies? a. In the long run, a higher saving rate leads to a higher growth rate of productivity. b. In the long run, a higher saving rate leads to a higher growth rate of income. c. Returns to capital become increasingly smaller as the amount of capital per worker increases. d. All of the above are correct.

c

An increase in a country's population may contribute to the rate of technological progress because a larger population a. forces the capital stock to be spread more thinly. b. forces natural resources to be spread more thinly. c. brings with it more scientists, inventors, and engineers. d. brings with it more favorable recognition from other countries.

c

Japan's status as a rich nation is attributable to a. Japan's quantities of natural resources, but not to international trade. b. international trade, but not to Japan's domestic quantities of natural resources. c. the fact that Japanese productivity has remained nearly constant for more than 100 years. d. the fact that the Japanese have downplayed the role of human capital in economic growth.

b

Suppose Turkey increases its saving rate. In the long run a. the growth rates of productivity and real GDP per person increase. b. productivity and real GDP per person increase. c. the growth rate of productivity increases, and real GDP per person increases. d. productivity increases, and the growth rate of real GDP per person increases.

b

Which of the following is not correct? a. Across countries there are large differences in the average income per person. These differences are reflected in large differences in the quality of life. b. With a growth rate of about 2 percent per year, average income per person doubles about every 60 years. c. The ranking of countries by average income changes substantially over time. d. In some countries real income per person has changed very little over many years.

b

Which of the following statements is correct? a. Productivity is a determinant of human capital per worker. b. Technological knowledge is a determinant of productivity. c. Human capital and technological knowledge are the same thing. d. All of the above are correct.

b

Country A and country B are the same except country A currently has more capital. Assuming diminishing returns, if both countries increase their capital by 100 units and other factors that determine output are unchanged, then a. output in country A increases by more than in country B. b. output in country A increases by the same amount as in country B. c. output in country A increases by less than in country B. d. None of the above is necessarily correct.

c

Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor county to catch up? a. The poor country has outward-oriented trade policies. b. The poor country allows foreign direct investment. c. The poor country has poorly developed property rights. d. All of the above are correct.

c

*graph with a curved line increasing at a decreasing rate* Choose a point anywhere on the curve and call it point A. If the economy is at point A in 2011, then it will definitely remain at point A in 2012 if, between 2011 and 2012, a. the quantity of physical capital remains constant; the number of workers doubles; and human capital, natural resources, and technology all double as well. b. the quantity of physical capital doubles; human capital, natural resources, and technology all double as well; and the number of workers remains constant. c. the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology all double as well. d. the quantity of physical capital doubles; the number of workers doubles; and human capital, natural resources, and technology remain constant.

d

According to research by Robert Fogel, people in Britain grew taller because of a. genetics. However this increase in height had no effect on productivity. b. genetics. This increase in height is associated with higher productivity. c. higher caloric intake. However, this increase in height had no effect on productivity. d. higher caloric intake. This increase in height is associated with higher productivity.

d

Assuming diminishing returns, a. the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, rich countries should grow faster than poor ones. b. the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, rich countries should grow faster than poor ones. c. the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, poor countries should grow faster than rich ones. d. the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, poor countries should grow faster than rich ones.

d

If a country increases its saving rate, which of the following permanently grow at a higher rate? a. productivity and real GDP per person b. productivity but not real GDP per person c. real GDP per person but not productivity d. neither real GDP per person nor productivity

d

Outward-oriented policies a. allow countries to take advantage of gains from trade. b. have generally led to high growth for the countries that pursued them. c. receive widespread support from economists. d. All of the above are correct.

d

Suppose that the U.S. undertakes a policy to increase its saving rate. This policy will likely a. have no impact on the level of real GDP per person. b. immediately and permanently decrease the level of real GDP per person. c. immediately and permanently increase the level of real GDP person. d. gradually raise the level of real GDP per person.

d

Which of the following is consistent with the catch-up effect? a. The United States had a higher growth rate before 1900 than after. b. After World War II the United States had lower growth rates than war-ravaged European countries. c. Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. d. All of the above are correct

d

Which of the following is consistent with the catch-up effect? a. The United States had a higher growth rate before 1900 than after. b. After World War II the United States had lower growth rates than war-ravaged European countries. c. Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. d. All of the above are correct.

d