Deck 25: True False

Question 1

If a country has a higher level of productivity than another,then it also has a higher level of real GDP.

Answer 1

False

Question 2

Over the period 1890-2014,Japan experienced a 2.59 percent average annual growth rate of real GDP per person.

Answer 2

True

Question 3

According to some estimates,over the last two decades China has had an annual average growth rate of about 12 percent.

Answer 3

True

Question 4

If it could increase its growth rates slightly,a country with low income would catch up with rich countries in about ten years.

Question 5

Over the period 1870-2014,the United States experienced an average annual growth rate of real GDP per person of about 1.8 percent per year.

Question 6

In the United States in 2014 real GDP per person was about $56,000,while in some poor countries real GDP per person was less than $5,000.

Question 7

In 2014 income per person in the United States was about 10 times that in India.

Question 8

Journey Motorcycles produced 100 motorcycles using 50 workers who each worked 8 hours a day.Journey's productivity was 1/4.

Question 9

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

Question 10

Since 1870 Canadian and U.S real GDP per person grew from below to above that in the United Kingdom.The explanation for this is likely that productivity grew faster in Canada and the U.S.than in the United Kingdom.

Question 11

If Country A produces 7,000 units of goods and services using 700 hours of labor,and if Country B produces 5,500 units of goods and services using 500 units of labor,then productivity is lower in Country A than in Country B.

Question 12

Over the period 1900-2014,Brazil's rate of economic growth exceeded that of China.

Question 13

Productivity can be computed as the number of hours worked divided by output.

Question 14

If per capita real income grows by 2 percent per year,then it will double in approximately 20 years.

Question 15

In some countries in Sub-Saharan Africa real GDP per person has been stagnant for many years.

Question 16

International data on real GDP per person gives us a sense of how standards of living vary across countries.

Question 17

Although growth rates across countries vary some,rankings of countries by income remain pretty much the same over time.

Question 18

International data on the history of real GDP growth rates shows that over the last 120 years or so,rich countries got richer and poor countries got poorer.

Question 19

Real GDP per person in rich countries,such as Germany,is sometimes more than 10 times that of poor countries like India.

Question 20

Over the last 140 years or so,on average Canada's real GDP per-person grew faster than that of the U.K.

Question 21

As capital per worker rises,output per worker rises.However,this increase in output per worker is smaller at smaller levels of existing capital per worker.

Question 22

A forest is an example of a nonrenewable resource.

Question 23

Human capital is the term economists use to refer to the knowledge and skills that workers acquire through education,training,and experience.

Question 24

Assuming constant returns to scale,if two countries are otherwise the same,the one that is poorer grows faster.

Question 25

If a production function has constant returns to scale,then if all inputs double so does production.

Question 26

Increases in both human capital per worker and physical capital per worker increase productivity.

Question 27

Petroleum is an example of a nonrenewable resource.

Question 28

The same size decrease in the amount of capital stock per worker will cause output per worker to fall by more in a country with a relatively high level of capital per worker than in a country with a relatively low level of capital per worker.

Question 29

It is possible for a country without a lot of domestic natural resources to have a high standard of living.

Question 30

An increase in a country's saving rate permanently raises its productivity.

Question 31

Like physical capital,human capital is a produced factor of production.

Question 32

Constant returns to scale is the point on a production function where increasing inputs will no longer increase output.

Question 33

An increase in the saving rate permanently increases the growth rate of real GDP per person.

Question 34

Two countries with the same saving rates must have the same growth rate of real GDP per person.

Question 35

The catch-up effect refers to the idea that poor countries,despite their best efforts,are not likely ever to experience the economic growth rates of wealthier countries.

Question 36

Other things the same,another unit of capital will increase output by more in a poor country than in a rich country.

Question 37

Historical trends in the prices of most natural resources compared to prices of other goods indicate that most natural resources have become scarcer over time.

Question 38

When Americans invest in Russia,the income of Russians (that is,Russian GNP)rises by more than production in Russia (that is,Russian GDP).

Question 39

Studies confirm that controlling for other variables such as the percentage of GDP devoted to investment,poor countries tend to grow at a faster rate than rich countries.

Question 40

Indonesians,for example,have a lower standard of living than Americans because they have a lower level of productivity.

Question 41

The population growth rate tends to be higher in developed countries than in developing countries.

Question 42

If a country made it easier for people to establish and prove the ownership of their property,real GDP per person would likely rise.

Question 43

Income rises after a charity gives poor families free livestock.The harvest that year was also particularly bountiful.The charity should take full credit for the observed increase in the standard of living.

Question 44

Economists generally believe that policies such as reducing barriers to trade are likely to foster economic growth.

Question 45

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

Question 46

Economist Michael Kremer found that world growth rates fell as population increased.

Question 47

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

Question 48

Other things the same,an economy's factors of production are likely to be used more effectively if there is an economywide respect for property rights.

Question 49

If a rich country reduced subsidies to domestic producers of goods that poor countries have a comparative advantage producing,the standard of living in these poor countries would likely rise.

Question 50

Randomized control trials can help economists evaluate the impact of global aid programs in the same way that doctors test drugs.

Question 51

Economists generally agree on the role the government should play in promoting productivity and economic growth.

Question 52

In countries where women are discriminated against,policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Question 53

Countries with high population growth rates tend to have lower levels of educational attainment.

Question 54

Other things the same,domestic investment will increase a country's real GDP by more than foreign investment.

Question 55

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

Question 56

Investment in human capital has opportunity costs,but investment in physical capital does not.

Question 57

An increase in capital increases productivity only if it is purchased and operated by domestic residents.

Question 58

Foreign direct investment and domestic investment have the same effect on all measures of economic prosperity.

Question 59

A country's standard of living depends on its ability to produce goods and services.

Question 60

If your company opens and operates a branch in a foreign country,your company engages in foreign direct investment.

Question 61

The majority of economists believe that future innovations will not be transformational enough to sustain high economic growth rates in the U.S.and western Europe.

Question 62

Without controlling for differences in natural resources and technological knowledge,diminishing returns can explain the entire difference in economic growth rates for China and the United States.