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WorksheetsProduction and Growth
Total questions: 15
Worksheet time: 12mins
A nation's standard of living is measured by its
real GDP
real GDP per person.
nominal GDP.
nominal GDP per person.
Which of the following statements is true?
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/person; thus, poor countries can become relatively rich over time.
Countries may have a different level of GDP/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/person.
Our standard of living is most closely related to
how hard we work.
our supply of capital, because everything of value is produced by machinery.
our productivity, because our income is equal to what we produce.
our supply of natural resources, because they limit production.
The inputs into production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called
physical capital.
natural resources.
human capital.
technological knowledge.
Many East Asian countries are growing very quickly because
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."
they are imperialists and have collected wealth from previous victories in war.
they have enormous natural resources.
When a nation has very little GDP per person,
it is doomed to being relatively poor forever.
an increase in capital will likely have little impact on output.
it has the potential to grow relatively quickly due to the "catch-up-effect."
it must be a small nation.
Once a country is wealthy,
it no longer needs any human capital.
capital becomes more productive due to the "catch-up effect."
it may be harder for it to grow quickly because of the diminishing returns to capital.
it is nearly impossible for it to become relatively poorer.
The opportunity cost of growth is
a reduction in current investment.
a reduction in current consumption.
a reduction in taxes.
a reduction in current saving.
If a production function exhibits constant returns to scale,
doubling all of the inputs more than doubles output due to the catch-up effect.
doubling all of the inputs has absolutely no impact on output because output is constant.
doubling all of the inputs less than doubles output due to diminishing returns.
doubling all of the inputs doubles output.
Which of the following describes an increase in technological knowledge?
A farmer sends his child to agricultural college and the child returns to work on the farm.
A farmer hires another day labourer.
A farmer buys another tractor.
A farmer discovers that it is better to plant in the spring rather than in the fall.
Which of the following is an example of foreign portfolio investment?
Toyota builds a new plant in the north of England.
EDF of France buys shares in Scottish & Southern Energy of the UK, and Scottish & Southern Energy uses the proceeds to build a new hydro-electric power station in Scotland.
Deutsche Bank of Germany buys some new software from a UK supplier.
JCB builds a new plant near Manchester.
Which of the following government policies is least likely to increase growth in Africa?
increase expenditures on public education
eliminate civil war
reduce restrictions on foreign capital investment
increase restrictions on the importing of American tractors and electronics
To increase growth, governments should do all of the following, except
encourage foreigners to investment in your country.
encourage saving and investment.
nationalize major industries.
encourage research and development.
Which of the following expenditures to enhance productivity is most likely to emit a positive externality?
Megabank buys a new computer.
Nathalie pays her university tuition fees.
Exxon leases a new oil field.
General Motors buys a new drill press.
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 these answers
