Macro - Test 2 (Ch 12,13,14,15,16)
Human capital refers to human-made capital such as tools and machinery, as opposed to natural capital such as rivers and timber.
False - Human capital is knowledge and skills of a worker acquired through education and experience.
Most economists believe that in-ward oriented policies that protect infant industries improve the growth rate of developing nations.
False - Most economists believe that outward-orientated policies improve growth. More productive countries could mentor or give supplies to those less productive countries
Evidence of rising prices for natural resources demonstrates that nonrenewable resources will become so scarce that economic growth will be limited.
False - the prices of natural resources,adjusted for inflation, are stable or falling, so our ability to conserve these resources is growing more rapidly than their supplies are dwindling
Economic evidence supports the predictions of Thomas Malthus regarding the effects of population growth and the food supply on the standard of living.
False- Due to technology advancements we have been able to outpace the exhaustion of resources as we are using them more efficiently.
The United States should grow faster than Mexico because the United States has a larger economy.
False- Growth depends on the rate of increase in productivity
An increase in the rate of saving and investment permanently increases a country's rate of growth
False- it can attract foreign investment
The opportunity cost of additional growth is that someone must forgo (go w/out) current consumption
True
Which is the following describers an increase in technological knowledge
A farmers discovers that it is better to plant in the spring rather than in the fall.
Brazil, Japan, and China are growing very quickly because ...
they save and invest an unusually high percentage of their real income
The rate of economic growth is probably underestimated
Human capital is the knowledge and skills of workers
if a production function exhibits constant returns to scale, doubling all of the inputs
doubles outputs
copper is an example of ..
nonrenewable natural resource
Once a country is wealthy..
it may be harder for it to grow quickly because of the diminishing returns to capital
A reasonable measure of the standard of living in a country
real income per person
A country can only increase it level of investments by increasing its saving
False
In very poor countries, paying parents to send their children to school may increase the education of poor children and decrease of child labor
True
Investments in human capital and technology may be particularly productive because of positive spillover effects
True
The only factor of production that is not "produced" is natural resources
True
An increase in capital should cause the growth rate of a relatively poor country to increase more than that of a rich country
True - it is easier for a poorer country to increase growth rate compared to a country that is already productive. Also, due to diminishing returns to capital, growth rises temporarily
If the production function exhibits constant returns to scale, then doubling all of the inputs doubles output
True- As it is is constant, what happens to input will happen to outputs.
The rate of economic growth in a country is probably underestimated
True- Human capital is not measures as it is the knowledge and skills of a worker
If Germans invest in the U.S economy by building a new Mercedes factory in the future U.S GDP will rise by more than U.S GNP
True.
When a nation has very little income per person...
it has the potential to grow relatively quickly due to the catch-up effect
? For a given level of tech, we should expect an increase in labor productivity within a nation when there is an increase in each of the following except
labor ( Ask why labor and why not natural resources)
