Econ Exam 10

In the fourteenth century it is estimated that deaths resulting from the bubonic plague reduced the population by about a third. Assuming diminishing returns, the decrease in population should have A. increased productivity and real GDP per person. B. increased productivity but decreased real GDP per person. C. decreased productivity but increased real GDP per person. D. decreased productivity and real GDP per person. E. not had an effect on productivity or real GDP per person

A

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? A. 2% B. 4% C. 6% D. 10% E. 12%

A

The dictator of a certain country requires that companies planning to open or expand must pay a large fee to file an application one year prior to building new factories or expanding existing ones. Other things the same, in the long run this requirement would A. reduce real GDP per person and productivity. B. reduce real GDP per person but not productivity. C. reduce productivity but not real GDP per person. D. Either A or C can be correct E. None of the above is correct.

A

According to economic theory, an increase in capital will increase real GDP per person A. more in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. B. more in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. C. less in a poor country than a rich country. The increase in real GDP per person will be larger if the addition to capital is from domestic rather than foreign investment. D. less in a poor country than a rich country. The increase in real GDP per person will be the same whether the addition to capital is from domestic or foreign investment. E. more in a poor country than a rich country. The increase in real GDP per person will be larger if the "right" political leader is in power.

B

If your firm's production function has constant returns to scale, and if you double all your inputs, then your firm's productivity will A. increase but not double. B. not change. C. double D. more than double. E. None of the above

B

Over the last ten years productivity grew faster in Oceania than in Freedonia and the population and total hours worked remained the same in both countries. It follows that A. real GDP per person must be higher in Oceania than in Freedonia. B. real GDP per person grew faster in Oceania than in Freedonia. C. real GDP per person grew slower in Oceania than in Freedonia. D. all of the above E. none of the above

B

Suppose a country imposes new restrictions on how many hours people can work. If these restrictions reduce the total number of hours worked in the economy, but all other factors that determine output are held fixed, then A. productivity rises and output rises. B. productivity rises and output falls. C. productivity falls and output rises. D. productivity falls and output falls. E. all of the above are possible.

B

Which factor of production was most likely responsible for enabling countries to move up the most in the rankings of economy size? A. abundant natural resources B. technology and human capital C. a large pool of labor D. large amounts of land on which to farm E. none of the above

B

If a Brazilian company opens a new factory in Peru, it makes A. a foreign direct investment. The factory will make a bigger impact on Peru's GNP than on its GDP. B. a foreign direct investment. The factory will make the same impact on Peru's GNP as it will on its GDP. C. a foreign direct investment. The factory will make a bigger impact on Peru's GDP than on its GNP. D. a foreign portfolio investment. The factory will make a bigger impact on Peru's GDP than on its GNP. E. a foreign portfolio investment. The factory will make a bigger impact on Peru's GNP than on its GDP.

C

Sasha and Natasha both mine salt. Sasha mines 400 pounds in 40 hours. Natasha mines 300 pounds in 20 hours. Which of the following is correct? A. Sasha's productivity is greater than Natasha's. This difference could be explained by Sasha having more physical capital than Natasha. B. Sasha's productivity is greater than Natasha's. This difference cannot be explained by a difference in the physical capital each has. C. Natasha's productivity is greater than Sasha's. This difference could be explained by Natasha having more physical capital than Sasha. D. Natasha's productivity is greater than Sasha's. This difference cannot be explained by a difference in the physical capital each has. E. None of the above

C

What is the most likely outcome in a country if Real GDP grows faster than the population? A. National Income will decrease and per capita GDP decrease B. National Income will decrease but per capita GDP will increase C. National Income will increase and per capita GDP will increase D. National Income will increase but per capita GDP will decrease E. Not sufficient information to answer the question

C

Productivity is defined as the quantity of A. labor required to produce a nation's GDP. B. labor required to produce one unit of goods and services. C. Labor and capital required to produce one unit of goods and services. D. goods and services produced from each unit of labor input. E. goods and services produced per unit of time.

D

Productivity is the amount of goods and services 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. An economy produces. It is not linked to the amount of worker's time.

D

Sasha and Natasha both mine salt. Sasha mines 400 pounds in 40 hours. Natasha mines 300 pounds in 20 hours. Which of the following is correct? A. Sasha's output is greater than Natasha's output. B. Natasha is more productive at mining salt compared to Sasha. C. Natasha is using more physical capital to mine salt than is Sasha D. Both A and B E. All of the above

D

The Karmic Deed Restaurant uses all of the following to produce vegetarian meals. Which of them is an example of physical capital? A. the owner's knowledge of how to prepare vegetarian entrees B. the money in the owner's account at the bank from which she borrowed money C. the fresh fruits, vegetables, and grains the restaurant uses to prepare its meals D. the tables and chairs in the restaurant E. The secret recipes handed down to the owner from family members

D

Which of the following best describes the government's role in promoting economic growth? A. he government has no role in promoting economic growth B. economic growth completely relies on the government C. a government's industrial policy is always effective in promoting economic growth D. a government's ability to provide an adequate legal infrastructure is probably effective at promoting economic growth E. all of the above

D

Technological knowledge A. is the same thing as human capital B. can be discovered but it can never be kept secret. C. will lead to greater output, but not greater productivity D. does not play a role in the relationship that economists call the production function. E. is a determinant of productivity

E

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. Both A and B are correct. E. All of the above are correct.

E

Which of the following would contribute to a growth in total output? A. Productivity B. HoursWorked C. Labor Force Participation Rate D. Population Size E. All of the Above

E

Which of the following would most economists be likely to agree with? A. Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. B. Productivity may be measured by the growth rate of real GDP per person. C. The level of real GDP per person is a good gauge of economic prosperity D. The growth rate of real GDP per person is a good gauge of economic progress. E. Both C and D

E