Question 1

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Accepted Answer

A) True 
 B)False

Question 2

What does diminishing returns to capital imply?

Accepted Answer

A)  Capital produces fewer goods as it ages.
B)  New ideas are not as useful as old ideas.
C)  Increases in the capital stock eventually decrease output.
D)  Increases in the capital stock increase output by ever smaller amounts.E) A) and B)
F) A) and C)

Question 3

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Accepted Answer

A)  increase Canadian GNP more than it would increase Canadian GDP
B)  increase Canadian GDP more than it would increase Canadian GNP
C)  not affect Canadian GNP, but it would increase Canadian GDP
D)  have no effect on Canadian GNP or GDPE) B) and C)
F) None of the above

Question 4

In a market economy, when do we know that a resource has become scarcer?

Accepted Answer

A)  when its price rises relative to other prices
B)  when it is nonrenewable and some of it is used
C)  when substitutes exist
D)  when there are no substitutesE) B) and C)
F) C) and D)

Question 5

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

Accepted Answer

A)  about 3.5 percent per year, which implies a doubling about every 20 years
B)  about 2 percent per year, which implies a doubling about every 35 years
C)  about 4 percent per year, which implies a doubling about every 17.5 years
D)  about 1 percent per year, which implies a doubling about every 70 yearsE) C) and D)
F) A) and B)

Question 6

Both the standard of living and the growth of real GDP per person vary widely across countries.

Accepted Answer

A) True 
 B)False

Question 7

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Accepted Answer

A)  by encouraging population growth
B)  by encouraging consumption
C)  by encouraging saving and investment
D)  by increasing government spendingE) A) and B)
F) A) and C)

Question 8

Which of the following best explains productivity?

Accepted Answer

A)  Productivity is equal to nominal GDP per person.
B)  Productivity is equal to real GDP per person.
C)  Productivity is the quantity of goods or services that a worker can produce in one hour.
D)  Productivity is the growth rate of real GDP per person.E) A) and B)
F) B) and C)

Question 9

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

Accepted Answer

A)  2 times higher
B)  4 times higher
C)  6 times higher
D)  8 times higherE) A) and C)
F) None of the above

Question 10

All else equal, which of the following would tend to cause GDP per person to rise?

Accepted Answer

A)  high population growth
B)  investment in human capital
C)  rapid growth in the number of workers
D)  policies to reduce importsE) A) and B)
F) A) and C)

Question 11

Which of the following indicates greater scarcity of a natural resource?

Accepted Answer

A)  simply an increase in its current dollar price
B)  an increase in its price that is greater than the rate of inflation, but only if the increase in price is created by a reduction in supply
C)  an increase in its price that is greater than the rate of inflation
D)  an increase in its price that is greater than the rate of inflation, but only if the stock of the resource has fallenE) None of the above
F) B) and C)

Question 12

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Accepted Answer

A)  Some of the income from the factory accrues to people who live in Egypt.
B)  GDP is income earned by residents only, whereas GNP is income earned by residents and nonresidents.
C)  All of the income from the factory is included in Egypt's GDP, but not all is included in GNP.
D)  Foreign direct investment is part of GDP, but it is not part of GNP.E) None of the above
F) B) and C)

Question 13

In which of the following types of investment do foreigners buy shares in domestic companies?

Accepted Answer

A)  foreign direct investment
B)  foreign portfolio investment
C)  foreign capital investment
D)  foreign indirect investmentE) B) and C)
F) A) and B)

Question 14

Which of the following is a characteristic of inward-oriented policies?

Accepted Answer

A)  They are generally supported by economists.
B)  They are primarily concerned with the development of human capital.
C)  They are in some ways like prohibiting the use of certain technologies.
D)  They are generally rejected by domestic producers in import-competing industries.E) A) and C)
F) B) and C)

Question 15

How is a nation's standard of living determined?

Accepted Answer

A)  by its productivity
B)  by its gross domestic product
C)  by its national income
D)  by how much it has relative to othersE) A) and B)
F) A) and C)

Question 16

What is a valid policy to use for increasing the rate of economic growth?

Accepted Answer

A)  reduce reliance on market forces because they allocate goods and services in an unfair manner
B)  encourage trade with neighbouring countries
C)  increase the fraction of GDP devoted to consumption
D)  restrict investment in domestic industries by foreigners because they take some of the profits out of the countryE) None of the above
F) A) and D)

Question 17

From 1974 to 1982, what was the growth in Canadian productivity?

Accepted Answer

A)  2.5 percent
B)  1.8 percent
C)  1.3 percent
D)  0.5 percentE) All of the above
F) B) and D)

Question 18

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

A)  education
B)  research and development
C)  nutrition
D)  trade restrictionsE) None of the above
F) All of the above

Question 19

A forest is an example of a nonrenewable resource.

Accepted Answer

A) True 
 B)False

Question 20

The real GDP per capita in an economy increases at a rate of 2.6 percent. Calculate the number of years that it takes for real GDP to double. Assuming that the current GDP per capita is $40 000 and the growth rate will be on average 2.6 percent, how much will GDP per capita be after 10 years? After 20 years? After30 years? Draw a graph to show approximately the evolution of this economy for the next 30 years.

Accepted Answer

Let us denote real GDP per capita by Y. ...

Exam 7: Production and Growth

All else equal, which of the following would tend to cause GDP per person to rise?

Correct Answer
verified

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Correct Answer
verified

In which of the following types of investment do foreigners buy shares in domestic companies?

Correct Answer
verified

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Correct Answer
verified

A forest is an example of a nonrenewable resource.

Correct Answer
verified

Correct Answer
verified
Let us denote real GDP per capita by Y. ...
View Answer

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

Correct Answer
verified

Which of the following indicates greater scarcity of a natural resource?

Correct Answer
verified

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Correct Answer
verified

What is a valid policy to use for increasing the rate of economic growth?

Correct Answer
verified

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct Answer
verified

From 1974 to 1982, what was the growth in Canadian productivity?

Correct Answer
verified

What does diminishing returns to capital imply?

Correct Answer
verified

In a market economy, when do we know that a resource has become scarcer?

Correct Answer
verified

Which of the following is a characteristic of inward-oriented policies?

Correct Answer
verified

Which of the following best explains productivity?

Correct Answer
verified

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

Correct Answer
verified

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct Answer
verified

How is a nation's standard of living determined?

Correct Answer
verified

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Correct Answer
verified

Exam 7: Production and Growth

All else equal, which of the following would tend to cause GDP per person to rise?

Correct AnswerverifiedShow Answer

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in Canada. What would the future production from such an investment do?

Correct AnswerverifiedShow Answer

In which of the following types of investment do foreigners buy shares in domestic companies?

Correct AnswerverifiedShow Answer

How can a government encourage growth and, in the long run, raise the country's economic standard of living?

Correct AnswerverifiedShow Answer

A forest is an example of a nonrenewable resource.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedLet us denote real GDP per capita by Y. ...View AnswerShow Answer

Over the past century in Canada, by how much has average income as measured by real GDP per person grown?

Correct AnswerverifiedShow Answer

Which of the following indicates greater scarcity of a natural resource?

Correct AnswerverifiedShow Answer

Why would the opening of a new Canadian-owned factory in Egypt tend to increase Egypt's GDP more than it increases Egypt's GNP?

Correct AnswerverifiedShow Answer

What is a valid policy to use for increasing the rate of economic growth?

Correct AnswerverifiedShow Answer

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Correct AnswerverifiedShow Answer

From 1974 to 1982, what was the growth in Canadian productivity?

Correct AnswerverifiedShow Answer

What does diminishing returns to capital imply?

Correct AnswerverifiedShow Answer

In a market economy, when do we know that a resource has become scarcer?

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of inward-oriented policies?

Correct AnswerverifiedShow Answer

Which of the following best explains productivity?

Correct AnswerverifiedShow Answer

As measured by real GDP per person, how much higher is average income in Canada today than it was a century ago?

Correct AnswerverifiedShow Answer

Both the standard of living and the growth of real GDP per person vary widely across countries.

Correct AnswerverifiedShow Answer

How is a nation's standard of living determined?

Correct AnswerverifiedShow Answer

One reason that governments may find it useful to sponsor universities and basic research is that, to a large extent, knowledge is a public good.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Let us denote real GDP per capita by Y. ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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