Econ Chapter 7

Over the last century, U.S. real GDP per person grew at a rate of about

4 percent per year, so that it is now 8 times as high as it was a century ago. 4 percent per year, so that it is now 2 times as high as it was a century ago. 2 percent per year, so that it is now 8 times as high as it was a century ago. 2 percent per year, so that it is now 2 times as high as it was a century ago.

Other things the same, which of the following would increase productivity?

An increase in human capital but not an increase in physical capital Neither an increase in human capital nor an increase in physical capital An increase in either human or physical capital An increase in physical capital but not an increase in human capital

Which of the following countries has had the greatest growth rate of real GDP per person within the last 10 years?

Argentina Bangladesh India Germany

Which of the following provide benefits to society at large and not just to the person(s) who pursues it?

Both technological knowledge that is a public good and education Technological knowledge that is a public good, but not education Neither education, nor technological knowledge that is a public good Education, but not technological knowledge that is a public good

A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?

Both the first and the second The first but not the second The second but not the first Neither the first nor the second

Which of the following countries achieved higher economic growth, in part by mandating a reduction in population growth?

China Great Britain Australia France

Keira is a farmer. Which of the following are included in her human capital?

Her seed drill but not what she's learned from experience Her seed drill and what she's learned from experience What she's learned from experience but not her seed drill Neither her seed drill nor what she's learned from experience

Japan is

an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.

In an economy where net exports are zero, if saving rises in some period, then in that period

consumption falls and investment rises. consumption rises and investment falls. consumption and investment fall. consumption rises and investment falls.

The catch-up effect refers to the idea that

saving will always catch-up with investment spending. it is easier for a country to grow fast and so catch-up if it starts out relatively poor. population eventually catches-up with increased output. if investment spending is low, increased saving will help investment to "catch-up."

Japan's status as a rich nation is attributable to

the fact that Japanese productivity has remained nearly constant for more than 100 years. the fact that the Japanese have downplayed the role of human capital in economic growth. Japan's quantities of natural resources, but not to international trade. international trade, but not to Japan's domestic quantities of natural resources.

Which of the following countries benefited significantly from the catch-up effect in the last half of the twentieth century?

South Korea

Out of the following economic statistics, which is the best measure of economic prosperity?

The level of real GDP The level of nominal GDP The price level The growth rate of real GDP

The United Kingdom is

a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States. an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States.

Each day Sasha works 6 hours and produces 7 units of goods and services. Clara works 10 hours each day and produces 9 units of goods and services. It follows that

Sasha's income per hour will be higher than Clara's. Sasha's income per day will be higher than Clara's. Clara's productivity is higher than Sasha's. Sasha's productivity is higher than Clara's.

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 country to catch up?

The poor country uses a lot of resources to promote free trade policies. The poor country has a health epidemic such as the Zika virus. The poor country wasted resources fighting corruption. The poor country heavily invests in education.

The curve becomes flatter as the amount of capital per worker increases because of

diminishing returns to labor. increasing returns to capital. increasing returns to labor. diminishing returns to capital

Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should

impose trade restrictions to protect the interests of domestic producers and consumers. subsidize key industries. limit foreign investment to industries that don't already exist in the country. lend support to the invisible hand by maintaining property rights and political stability

A policy that increases saving will

improve economic growth but worsen health outcomes. Answer improve economic growth and health outcomes. worsen economic growth and health outcomes. worsen economic growth, but improve health outcomes

The traditional view of the production process is that capital is subject to

increasing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries. diminishing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries. increasing returns, so that other things the same, real GDP in poor countries should grow at a slower rate than in rich countries. diminishing returns, so that other things the same, real GDP in poor countries should grow at a faster rate than in rich countries.

Malthus predicted that the power of population growth was

less than the power of the earth to produce subsistence. His forecast was on the mark. greater than the power of the earth to produce subsistence. His forecast was off the mark. greater than the power of the earth to produce subsistence. His forecast was on the mark. less than the power of the earth to produce subsistence. His forecast was off the mark.

The rate of real economic growth

overestimated using measures of income growth. underestimated using measures of technological growth. underestimated using measures of income growth. overestimated using measures of technological growth.

One variable responsible for most significant explanation of variations in living standards around the world is

preferences. productivity. population. prices.

Apple founder Steve Jobs received patents on many of his ideas. While the patents existed, his ideas were

private goods and proprietary knowledge. private goods but not proprietary knowledge. public goods and proprietary knowledge. public goods but not proprietary knowledge

The behavior of market prices over time indicates that natural resources are

unrelated to economic growth. the major determinant of productivity. a limit to economic growth. not a limit to economic growth*.