Question 1

What is the distinction between foreign direct investment and foreign portfolio investment?

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Question 2

When a country eliminates tariffs and other trade restrictions, intending to promote economic growth, it is pursuing _______-oriented policies.

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Question 3

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

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Question 4

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 5

Studies have found that there is a relationship between height and productivity. Briefly explain.

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Question 6

Why does a nation's standard of living depend on property rights?

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Question 7

What are inward-oriented policies? Do most economists recommend these types of policies to poor countries?

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Question 8

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 9

An important prerequisite for the price system to work is an economy-wide respect for _______ rights.

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Question 10

What particularly important role do courts play in a market economy?

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Question 11

In what sense is it likely that geography has an effect on a country's rate of economic growth?

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Question 12

Which well-known economist from the past asserted that "the power of population is infinitely greater than the power in the earth to produce subsistence for man?"

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Question 13

What is the relationship between education and human capital?

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Question 14

When a country imposes tariffs, intending to protect domestic firms from foreign competition, it is pursuing _______-oriented policies.

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Question 15

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1993 to 2012.
 $$\begin{array} { | l | l | l | } 
\hline \text { Year } & \text { Real GDP (2009 prices) } & \text { Population } \
\hline 1993 & \$ 9,510,800 \text { million } & 257.8 \text { million } \
\hline 2012 & \$ 15,470,700 \text { million } & 313.85 \text { million } \
\hline
\end{array}$$

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Question 16

Some data that at first might seem puzzling: The share of GDP devoted to investment was similar for the United States and South Korea from 1960-1991. However, during these same years South Korea had a 6 percent growth rate of average annual income per person, while the United States had only a 2 percent growth rate. If the saving rates were the same, why were the growth rates so different?

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Question 17

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 18

What is the difference between human capital and technology?

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Question 19

Brazil gives cash payments to its poor citizens on the condition that those citizens' children stay in school. In terms of the determinants of productivity, how might this public policy contribute to higher productivity in Brazil?

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Question 20

Research suggests that taller workers tend to earn more income than shorter workers. What does this suggest about the relationship between workers' height and their productivity?

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Quiz 25: Production and Growth