Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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A
nation's standard of living is measured by its a. | real GDP. | b. | real GDP per
person. | c. | nominal GDP. | d. | nominal GDP per
person. | | |
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2.
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In
recent decades, average income in some East Asian countries, such as South Korea, Singapore, and
Taiwan, has risen about a. | 2 percent per year. | b. | 4 percent per
year. | c. | 7 percent per year. | d. | 10 percent per
year. | | |
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3.
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In
some East Asian countries, average income, as measured by real GDP per person, has recently grown at
an average annual rate that implies output should double about every a. | 10
years. | b. | 15 years. | c. | 20
years. | d. | 25 years. | | |
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4.
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Average income has been stagnant for many years in a. | Ireland. | b. | Singapore. | c. | Ethiopia. | d. | All of the above are correct. | | |
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5.
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Productivity a. | is nearly the same across countries, and so provides no help
explaining differences in the standard of living across countries. | b. | explains very
little of the differences in the standard of living across countries. | c. | explains some,
but not most of the differences in the standard of living across countries. | d. | explains most of
the differences in the standard of living across countries. | | |
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6.
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Cedar
Valley Furniture uses 5 workers working 8 hours to produce 80 rocking chairs. What is the
productivity of these workers? a. | 2 chairs per hour. | b. | 1 hour per
chair. | c. | 80 chairs. | d. | None of the
above is correct. | | |
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7.
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Which
of the following is a determinant of productivity? a. | human capital
per worker | b. | physical capital per worker | c. | natural
resources per worker | d. | All of the above are correct. | | |
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8.
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The
equipment and structures available to produce goods and services are called a. | physical
capital. | b. | human capital. | c. | the production
function. | d. | technology. | | |
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9.
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Suppose that over the last ten years productivity grew faster in Oceania than in
Freedonia and the population of both countries was unchanged. a. | It follows that
real GDP per person must be higher in Oceania than in Freedonia. | b. | It follows that
real GDP per person grew faster in Oceania than in Freedonia. | c. | It follows that
the standard of living must be higher in Oceania than in Freedonia. | d. | All of the above
are correct. | | |
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10.
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If a
country’s saving rate declined, then other things the same, in the long run it would have
a. | lower
productivity, but not lower real GDP per person. | b. | lower
productivity and lower real GDP per person. | c. | lower real GDP
per person, but not lower productivity | d. | neither lower productivity nor lower real GDP per
person. | | |
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11.
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The
catch-up effect refers to the idea that a. | saving will always catch-up with investment
spending. | b. | it is easier for a country to grow fast and so catch-up if it
starts out relatively poor. | c. | population eventually catches-up with increased
output. | d. | if investment spending is low, increased saving will help
investment to "catch-up." | | |
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12.
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The
opening of a new American-owned factory in Egypt would tend to increase Egypt's GDP more than it
increases Egypt's GNP because a. | some of the income from the factory accrues to people who do
not live in Egypt. | b. | gross domestic product is income earned within a country by
both residents and nonresidents, whereas gross national product is the income earned by residents of
a country while producing both at home and abroad. | c. | all of the
income from the factory is included in Egypt's GDP. | d. | All of the above
are correct. | | |
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13.
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Economist Robert Fogel focused on which of the following factors as one determinant of
long-run economic growth? a. | education | b. | research and
development | c. | nutrition | d. | trade
restrictions | | |
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14.
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Suppose that a new government is elected in Tempestia. The new government takes steps
toward improving the court system and reducing government corruption. The citizens of Tempestia find
these efforts credible and outsiders believe these changes will be effective and long lasting. These
changes will probably a. | raise real GDP per person and productivity in
Tempestia. | b. | raise real GDP per person but not productivity in
Tempestia. | c. | raise productivity but not real GDP per person in
Tempestia. | d. | raise neither productivity nor real GDP per person in
Tempestia. | | |
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15.
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In
2003 The Presidents of the African countries of Mali and Burkina Faso a. | requested that
rich countries apply free trade rules to those products where poor countries have a proven
competitive advantage. | b. | argued that free trade was not a policy that developing nations
would find it wise to follow. | c. | said that at their current stage of development that most of
the principles of market economies were not practical. | d. | None of the
above is correct. | | |
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