Macro Econ Chapter 7 Quiz Practice

Cedar Valley Furniture uses 5 workers working 8 hours to produce 80 rocking chairs. What is the productivity of these workers? a. 2 chairs per hour. b. 1 hour per chair. c. 80 chairs. d. None of the above is correct.

a

Inward-oriented policies a. include imposing tariffs and other trade restrictions. b. have generally increased productivity and growth in the countries that pursued them. c. promote the production of goods and services the country produce most efficiently. d. All of the above are correct.

a

The traditional view of the production process is that capital is subject to a. diminishing returns, so that other things the same real GDP in poor countries should grow at a faster rate than in rich countries. b. diminishing returns, so that other things the same real GDP in poor countries should grow at a slower rate than in rich countries. c. increasing returns, so that other things the same real GDP in poor countries should grow at a faster rate than in rich countries. d. increasing returns, so that other things the same real GDP in poor countries should grow at a slower rate than in rich countries.

a

Which of the following is correct? a. If a relatively poor country had grown at 3.5 percent per year for the last 100 years, it would be a relatively rich country today. b. International data on the history of the growth of real GDP per person shows that the rich countries get richer and the poor countries get poorer. c. In the United States, average income today is about four times as high as average income a century ago. d. All of the above are correct.

a

Which of the following is not correct? a. Countries that have had higher output growth per person have typically done so without higher productivity growth. b. A country's standard of living and its productivity are closely related. c. Productivity refers to output produced per hour of work. d. Increases in productivity can be used to increase output or leisure.

a

A nation's standard of living is measured by its a. real GDP. b. real GDP per person. c. nominal GDP. d. nominal GDP per person.

b

Malthus predicted that the power of population a. was greater than the power of the earth to produce subsistence. His forecast was on the mark. b. was greater than the power of the earth to produce subsistence. His forecast was off the mark. c. was less than the power of the earth to produce subsistence. His forecast was on the mark. d. was less than the power of the earth to produce subsistence. His forecast was off the mark.

b

On a production function, as capital per worker increases, output per worker a. increases. This increase is larger at larger values of capital per worker. b. increases. This increase is smaller at larger values of capital per worker. c. decreases. This decrease is larger at larger value of capital per worker. d. decreases. This decrease is smaller at larger value of capital per worker.

b

Outward-oriented policies a. prevent countries from taking advantage of gains from trade. b. have generally led to high growth for the countries that pursued them. c. receive little support from economists, despite such polices success. d. None of the above is correct.

b

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth? a. education b. research and development c. nutrition d. trade restrictions

c

Historically, the market prices of most natural resources (adjusted for inflation) have a. increased. b. remained stable. c. remained stable or decreased. d. decreased.

c

If a production function has constant returns to scale, output can be doubled if a. labor alone doubles. b. all inputs but labor double. c. all of the inputs double. d. None of the above is correct.

c

Other things equal, relatively poor countries tend to grow a. slower than relatively rich countries; this is called the poverty trap. b. slower than relatively rich countries; this is called the fall-behind effect. c. faster than relatively rich countries; this is called the catch-up effect. d. faster than relatively rich countries; this is called the constant-returns-to-scale effect.

c

Patents turn new ideas into a. public goods, and increase the incentive to engage in research. b. public goods, but decrease the incentive to engage in research. c. private goods, and increase the incentive to engage in research. d. private goods, but decrease the incentive to engage in research.

c

Roughly what percentage of growth in real GDP per person in Britain between 1790 and 1980 was accounted for by improved nutrition according to the estimates of Robert Fogel? a. 60% b. 45% c. 30% d. 15%

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

Which of the following would not be considered physical capital? a. a new factory building b. a computer used to help Mercury Delivery Service keep track of its orders c. on-the-job training d. a desk used in an accountant's office

c

A rapid increase in the number of workers, other things the same, is likely in the short term to a. raise real GDP per person, but decrease real GDP. b. decrease both real GDP and real GDP per person. c. raise both real GDP and real GDP per person. d. raise real GDP, but decrease real GDP per person.

d

If a country's saving rate increases, then in the long run a. both productivity growth and income growth increase. b. only productivity growth increases. c. only income growth increases. d. neither productivity growth nor income growth increase.

d

If one wants to know how the material well-being of the average person has changed over time in a given country, one should look at the a. level of real GDP. b. growth rate of nominal GDP. c. growth rate of real GDP. d. growth rate of real GDP per person.

d

In a market economy, we know that a resource has become scarcer when a. its price rises relative to other prices. b. it is non-renewable and some of it is used. c. people search for substitutes. d. All of the above are correct.

d

Productivity a. is nearly the same across countries, and so provides no help explaining differences in the standard of living across countries. b. explains very little of the differences in the standard of living across countries. c. explains some, but not most of the differences in the standard of living across countries. d. explains most of the differences in the standard of living across countries.

d

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth? a. A country with no or few domestic natural resources is destined to be poor. b. Differences in natural resources have virtually no role in explaining differences in standards of living. c. Some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living. d. Abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.

d

Which of the following is considered human capital? a. knowledge acquired from early childhood education programs b. knowledge acquired from grade school c. knowledge acquired from on-the-job training d. All of the above are correct.

d

Which of the following is correct? a. In an economy-wide sense property rights are an important prerequisite for the price system to work. b. Property rights give people the ability to exercise authority over the resources they own. c. An absence of well-established and well-enforced property rights appears to associated with a reduced standard of living. d. All of the above are correct.

d