Economic Growth

1. Once one person discovers an idea, the idea generally enters society's pool of knowledge, which many other people can use. Therefore, knowledge is generally a

Private good

Public good

Normal good

Societal good

2. The term "Brain Drain" refers to

A. the emigration of many of the most highly educated workers from poor to rich countries.

B. the loss of knowledge due to a poor educational system in a country.

C. a situation where the population grows faster than the level of education.

D. a situation where one country robs technological knowledge from another country.

3. Which of the following is an example of a nonrenewable resource?

Oil

Livestock

Lumber

All of the above are correct

4. Other things equal, relatively poor countries tend to

A. grow slower than relatively rich countries; this is called the fall-behind effect.

B. grow slower than relatively rich countries; this is called the Malthus effect.

C. grow faster than relatively rich countries; this is called the catch-up effect.

D. grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.

5. A nation’s standard of living is measured by its

Nominal GDP

Nominal GDP per capita

Real GDP

Real GDP per capita

6. Both Tom and Jerry work eight hours a day. Tom can produce six baskets of goods per hour while Jerry can produce just four baskets of the same goods per hour. It follows that Tom’s

A. productivity is greater than Jerry’s.

B. output is greater than Jerry’s.

C. standard of living is higher than Jerry’s.

D. All of the above are correct.

7. Although technological knowledge and human capital are closely related, there is an important difference. A relevant metaphor would be

B. technological knowledge is the textbook, whereas human capital is the ink.

C. technological knowledge is the thought process, whereas human capital is the calorie burn.

D. None of the above are relevant.

8. If your American-based firm opens and operates a new plastics factory in Ireland, your firm is engaging in

A. foreign portfolio investment.

B. foreign financial investment.

C. indirect foreign investment.

D. foreign direct investment.

9. The logic behind the catch-up effect is that

A. workers in countries with low income will work harder than workers in countries with high incomes.

B. the capital stock in rich countries deteriorates more rapidly than the capital stock in poor countries.

D. None of the above are correct.

10. A rapid increase in the number of workers is likely to

A. raise both real GDP and real GDP per person.

B. raise real GDP, but decrease real GDP per person.

C. raise real GDP per person, but decrease real GDP.

D. decrease both real GDP and real GDP per person.

11. If Japanese-owned Honda opens a factory in Ohio,

A. U.S. GNP rises more than U.S. GDP.

B. Japanese GDP rises more than Japanese GNP.

C. Both of the above are correct.

D. None of the above are correct.

12. Suppose Ford builds a new car factory in Mexico. Future production from such an investment would

A. increase Mexico's GNP more than it would increase Mexico's GDP.

B. increase Mexico's GDP more than it would increase Mexico's GNP.

C. not affect Mexico's GNP, but increase Mexico's GDP.

D. have no affect on either GDP or GNP.

13. Foreign saving is used for domestic investment when foreigners engage in

Foreign direct investment

Foreign investment

Either a or b

Neither a nor b

14. Which of the following is not true?

A. Growth rates of real GDP per person vary substantially from country to country.

B. GDP measures total expenditures and total income.

C. Richer countries have more televisions, better nutrition, better health care, and longer life expectancy.

D. Productivity is not closely linked to government policies.

15. Which of the following is generally an opportunity cost of investment in human capital?

A. increased earning potential

B. future job security

C. forgone wages at present

D. All of the above are correct.

16. A nation's standard of living is determined by

Productivity

Gross domestic product

National income

How much it has relative to others

17. The opening of a new American-owned factory in Liberia would tend to increase Liberia’s GDP more than it increases Liberia’s GNP because

A. some of the income from the factory accrues to people who do not live in Liberia.

C. all of the income from the factory is included in Liberia’s GDP.

D. All of the above are correct.

18. Which of the following is correct?

A. Both levels and growth rates of real GDP per person are diverse across countries.

C. The typical citizen of China has about as much real income as the typical American in 1950.

D. All of the above are correct.

19. Which of the following is not correct?

A. Educational attainment tends to be lowest in countries with the highest population growth.

B. Economists generally believe that decreasing population growth rates can increase output growth rates.

C. China allows only one child per family and couples that violate this rule are subject to substantial fines.

D. In developed countries, population growth is 3 percent; in many developing countries it is 5 percent.

20. Inward-oriented polices

A. primarily concern the development of human capital.

B. in some ways are like prohibiting the use of certain technologies.

C. are generally supported by economists.

D. All of the above are correct.

Economic Growth

1. Once one person discovers an idea, the idea generally enters society's pool of knowledge, which many other people can use. Therefore, knowledge is generally a

2.

What first name or nickname would you like us to use?

2. The term "Brain Drain" refers to

3. Which of the following is an example of a nonrenewable resource?

4. Other things equal, relatively poor countries tend to

5. A nation’s standard of living is measured by its

6. Both Tom and Jerry work eight hours a day. Tom can produce six baskets of goods per hour while Jerry can produce just four baskets of the same goods per hour. It follows that Tom’s

7. Although technological knowledge and human capital are closely related, there is an important difference. A relevant metaphor would be

8. If your American-based firm opens and operates a new plastics factory in Ireland, your firm is engaging in

9. The logic behind the catch-up effect is that

10. A rapid increase in the number of workers is likely to

11. If Japanese-owned Honda opens a factory in Ohio,

12. Suppose Ford builds a new car factory in Mexico. Future production from such an investment would

13. Foreign saving is used for domestic investment when foreigners engage in

14. Which of the following is not true?

15. Which of the following is generally an opportunity cost of investment in human capital?

16. A nation's standard of living is determined by

17. The opening of a new American-owned factory in Liberia would tend to increase Liberia’s GDP more than it increases Liberia’s GNP because

18. Which of the following is correct?

19. Which of the following is not correct?

20. Inward-oriented polices