Tut 4: Macro

  A reasonable measure of the standard of living in a country is

• Real GDP per person.

• Real GDP

• Nominal GDP per person

• Nominal GDP

Many East Asian countries are growing very quickly because

• They have enormous natural resources.

• They are imperialists and have collected wealth from previous victories in war.

• They save and invest an unusually high percentage of their GDP.

• They have always been wealthy and will continue to be wealthy, which is known as the “snowball effect.”

When a nation has very little GDP per person,

• It is doomed to being relatively poor forever.

• It must be a small nation.

•  It has the potential to grow relatively quickly due to the “catch-up effect.”

• An increase in capital will likely have little impact on output.

Once a country is wealthy, 

• It is nearly impossible for it to become relatively poorer.

•  It may be harder for it to grow quickly because of the diminishing returns to capital.

• Capital becomes more productive due to the “catch-up effect.”

• It no longer needs any human capital

The opportunity cost of growth is 

• A reduction in current investment.

•  A reduction in current saving.

• A reduction in current consumption.

• A reduction in taxes.

 For a given level of technology, we should expect an increase in labor productivity within a nation when there is an increase in each of the following except

• Human capital per worker

• Physical capital per worker.

• Natural resources per worker.

• Labor

 Which of the following statements is true

• Countries may have a different level of GDP per person, but they all grow at the same rate.

• Countries may have a different growth rate, but they all have the same level of GDP per person.

• Countries all have the same growth rate and level of output because any country can obtain the same factors of production.

• Countries have great variance in both the level and growth rate of GDP per person; thus, poor countries can become relatively rich over time.

Copper is an example of

• human capital

•  Physical capital.

• A nonrenewable natural resource.

• A renewable natural resource. 

Which of the following statements regarding the impact of population growth on productivity is true?

• There is no evidence yet that rapid population growth stretches natural resources to the point that it limits growth in productivity.

•  Rapid population growth may dilute the capital stock, lowering productivity.

• Rapid population growth may promote technological progress, increasing productivity.

• All of the above are true.

Thomas Malthus argued that

•  Technological progress will continuously generate improvements in productivity and living standards.

• Labor is the only true factor of production.

• An ever-increasing population is constrained only by the food supply, resulting in chronic famines.

• Private charities and government aid will improve the welfare of the poor.