Question 1

Why is productivity related to the standard of living? In your answer be sure to explain what productivity and standard of living mean.Make a list of things that determine labour productivity.

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Question 2

If the productivity slowdown had not occurred in 1973,the income of the average Canadian today would be about 70 percent higher.

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Question 3

Some economists argue that it is possible to raise the standard of living by reducing population growth.As an economist interested in incentives rather than coercion,what kind of policy would you recommend to slow population growth?

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Question 4

In countries where women are discriminated against,policies that increase their career and educational opportunities are likely to increase the birth rate.

Accepted Answer

There is no direct correlation between women's opportunities and the birth rate. Many external factors influence birth rates, and women's empowerment may even lead to decreased birth rates as they pursue education and careers.

Question 5

Economists generally believe that outward-oriented policies are more likely to foster growth than inward-oriented policies.

Accepted Answer

Outward-oriented policies, which emphasize international trade and investment, can increase a country's access to markets and resources, provide opportunities for specialization and innovation, and promote competition and efficiency. Inward-oriented policies, which limit trade and investment and support domestic production, can lead to inefficiencies, protectionism, and reduced international competitiveness.

Question 6

How do inward-oriented policies affect a nation's growth?

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Question 7

The annual population growth rate in developed countries is about 1 percent,while the growth rate in developing countries is about 3 percent.

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Question 8

In addition to investment in physical and human capital,what other public policies might a country adopt to increase productivity?

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Question 9

The productivity slowdown in 1973 appears to be primarily the result of a decrease in the capital to labour ratio.

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The productivity slowdown in 1973 is attributed to a variety of factors including energy price shocks, changes in the demographic composition of the workforce, a shift from manufacturing to services, and possibly a slowdown in technological innovation, rather than primarily a decrease in the capital to labour ratio.

Question 10

Compare and contrast the population theories of Malthus and Kremer.

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Question 11

A country that made its courts less corrupt and its government more stable would likely see its standard of living rise.

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Corruption in the courts and instability in the government can negatively impact a country's economic growth and development. By reducing corruption and increasing stability, a country can attract more investment, create a more favorable business environment, and provide greater opportunities for its citizens, ultimately leading to a higher standard of living.

Question 12

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the period 1960-1990.However,South Korea had a 7 percent growth rate of average annual income,while Canada had only a 2.5 percent growth rate.How can this be explained?

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Question 13

What might the African governments do to foster higher economic growth?

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Question 14

Michael Kremer found that world growth rates have increased as world population has.

Accepted Answer

Michael Kremer's research shows that there is a positive correlation between world population and economic growth rates. This suggests that as world population has increased, economic growth rates have also increased.

Question 15

Use the data below to find the growth of income per person (over the entire period,not an annual basis)between the two years listed.
Year Real GDP Population
1990 $5,915,600 million 240 million
2015 $10,243,800 million 295 million

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Question 16

What is a production function? Write an equation for a typical production function,and explain what each of the terms represents.

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Question 17

Why are property rights important for the growth of a nation's standard of living?

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Question 18

The catch-up effect says that countries with low income can grow faster than countries with higher income.However,in statistical studies that include many diverse countries,we do not observe the catch-up effect unless we control for other variables that affect productivity.Considering the determinants of productivity,list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

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Question 19

What is the difference between human capital and technology?

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Question 20

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.

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Knowledge, particularly scientific and technological advancements, can benefit society as a whole and not just the individual or institution that produces the knowledge. Therefore, it is considered a public good that can be shared and utilized by different sectors and industries. Governments may choose to sponsor universities and basic research in order to promote the production and dissemination of knowledge for the benefit of society.

Quiz 7: Production and Growth