chapter 12 econ

A nation's standard of living is determined by

the productivity of its workers.

Other things the same, a country that increases its saving rate increases

neither its future productivity nor future real GDP.

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

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Output will rise but by less than it did when the previous unit was added.

Which of the following is correct?

The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.

All else equal, which of the following would tend to cause real GDP per person to rise?

a change from inward-oriented policies to outward-oriented policies, an increase in investment in human captical, and strengthening of property rights.

Consider three imaginary countries. In Aire, saving amounts to $4,000 and consumption amounts to $12,000; in Bovina, saving amounts to $3,000 and consumption amounts to $24,000; and in Cartar, saving amounts to $10,000 and consumption amounts to $50,000. The saving rate is

higher in Aire than in Cartar, and it is higher in Cartar than in Bovina.

Which of the following is a determinant of productivity?

human capital per worker, physical capital per worker, natural resources per worker

Productivity is the

key determinant of living standards, and growth in productivity is the key determinant of growth in living standards.

Last year a country had 800 workers who worked an average of 8 hours and produced 12,800 units. This year the same country had 1000 workers who worked an average of 8 hours and produced 14,000 units. This country's productivity was

lower this year than last year. A possible source of this change in productivity is a change in the size of the capital stock.

Country A has twice as many workers as Country B. Country A also has twice as much physical capital, twice as much human capital, and access to twice as many natural resources as Country B. Assuming constant-returns to scale, which of the following is higher in Country A?

neither productivity nor output per worker

In the equation for the production function Y/L represents

productivity.

In the long run, an increase in the saving rate

raises the levels of both productivity and income