Exam 25: Production and Growth

A) is a way for poor countries to learn the state-of-the-art technologies developed and used in richer countries.
B) is viewed by economists as a way to increase growth.
C) often requires removing restrictions that governments have imposed on foreign ownership of domestic capital.
D) All of the above are correct.

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A) would decline as the alternative would reduce the demand for oil.
B) would decline as the alternative would reduce the supply of oil.
C) would increase as the alternative would increase the demand for oil.
D) would increase as the alternative would increase the supply of oil.

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A) decreasing returns to scale.
B) zero returns to scale.
C) constant returns to scale.
D) increasing returns to scale.

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A) natural resources per worker.
B) human capital per worker.
C) output per worker.
D) physical capital per worker.

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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.

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A) increased productivity and real GDP per person.
B) increased productivity but decreased real GDP per person.
C) increased real GDP per person, but decreased productivity.
D) decreased productivity and real GDP per person.

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An economist typical...

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A) increase growth more for a poor country than for a rich country, and raise growth permanently.
B) increase growth more for a poor country than for a rich country, but raise growth temporarily.
C) increase growth more for a rich country than for a poor country, and raise growth permanently.
D) increase growth more for a rich country than for a poor country, but raise growth temporarily.

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A) Germany
B) Canada
C) United States
D) Japan

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H represen...

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A) can be thought of, metaphorically, as the quality of society's textbooks, whereas technological knowledge can be thought of as the time that the population has devoted to reading textbooks.
B) is more tangible than physical capital.
C) is an input in the production of goods and services.
D) is the same as the quantity of labor.

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A) the knowledge he learned on the job, and the tools he uses
B) the knowledge he learned on the job, but not the tools he uses
C) the tools he uses, but not the knowledge he learned on the job
D) neither the knowledge he learned on the job nor the tools he uses

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A) the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, rich countries should grow faster than poor ones.
B) the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, rich countries should grow faster than poor ones.
C) the increase in output growth from an increase in the saving rate rises over time, and that, other things the same, poor countries should grow faster than rich ones.
D) the increase in output growth from an increase in the saving rate falls over time, and that, other things the same, poor countries should grow faster than rich ones.

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A) agree with the report, and would point to rising natural resource prices as evidence.
B) agree with the report, but wouldn't think it was important because growth will not slow down for several centuries.
C) disagree with the report, in part because it ignores the mitigating effects of technological change.
D) disagree with the report because labor and capital are the primary determinants of growth, and since they are plentiful, growth will not slow down.

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A) richer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
B) richer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.
C) poorer than Country B. If Country A adds another unit of capital, output will increase by more than 12 units.
D) poorer than Country B. If Country A adds another unit of capital, output will increase by less than 12 units.

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A) fall to less than one-half of its former value.
B) fall, but it would still be greater than one-half of its former value.
C) stay the same.
D) rise but less than double.

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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.

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