Fundamentals of Economics

5165 WordsMay 1, 201521 Pages
1. In 2009, the imaginary nation of Florastan had a population of 8,044 and real GDP of 36,198,000. In 2010 it had a population of 7,800 and real GDP of 35,880,000. What was the growth rate of real GDP per person in Florastan between 2009 and 2010? a. -2.2 percent b. -0.7 percent c. 2.2 percent d. 4.5 percent 2. Which of the following statements is true? a. Productivity is calculated as hours worked divided by output produced. b. Americans have a higher standard of living than Indonesians because American workers are more productive than Indonesian workers. c. Both A and B are correct. d. None of the above are correct. 3. Productivity is the a. key determinant of living standards, and growth in productivity is the key determinant of…show more content…
represents the traditional view of the production process. b. is an assertion that capital is subject to diminishing returns. c. is made under the assumption that the quantities of human capital, natural resources, and technology are being held constant. d. All of the above are correct. 11. All else equal, by saving more, a country a. has more resources for capital goods. The increase in capital raises productivity. b. has more resources for capital goods. The increase in capital reduces productivity. c. has fewer resources for capital goods. The decrease in capital raises productivity. d. has fewer resources for capital goods. The decrease in capital reduces productivity. 12. The logic behind the catch-up effect is that a. workers in countries with low incomes will work more hours than workers in countries with high incomes. b. the capital stock in rich countries deteriorates at a higher rate because it already has a lot of capital. c. new capital adds more to production in a country that doesn't have much capital than in a country that already has much capital. d. None of the above is correct. 13. In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in a. foreign portfolio investment. b. indirect domestic investment. c. foreign direct investment. d. foreign indirect investment. 14. Suppose that an American opens and
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