Question 1

Compare and contrast the population theories of Malthus and Kremer.

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Question 2

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

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Question 3

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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A less corrupt court system would increase the overall trust in the justice system, leading to more investment and business growth. A more stable government would provide a better environment for businesses and individuals to thrive, leading to an increase in overall standard of living.

Question 4

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 5

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

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The productivity slowdown is often attributed to various factors, including technological advancements not translating into productivity gains, changes in workforce skills, and economic policies, rather than solely a decrease in the capital to labor ratio.

Question 6

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 7

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

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Question 8

What is the difference between human capital and technology?

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Question 9

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 10

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

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Question 11

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 12

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 is not rivalrous, meaning that its use by one individual or entity does not diminish its availability to others. Therefore, it is difficult for private entities to fully capture the value of investments in research and education, and governments may find it beneficial to provide funding to ensure that these public goods are created and made available to everyone.

Question 13

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

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Michael Kramer found a positive correlation between world growth rates and population growth rates, indicating that as population has increased, world growth rates have also increased.

Question 14

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

Accepted Answer

According to a study by the Fraser Institute, if productivity had continued at its pre-1973 rate, the average Canadian income would be about 70 percent higher today.

Question 15

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

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Outward-oriented policies, such as free trade and openness to foreign investment, can lead to increased competition, access to larger markets, and technology transfer, all of which can boost economic growth. Inward-oriented policies, such as protectionism and restrictions on trade and investment, can limit competition and innovation, ultimately hindering growth.

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

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

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There is no evidence to suggest that increasing career and educational opportunities for women in countries where they are discriminated against will directly lead to an increase in the birth rate. In fact, providing women with education and employment opportunities may have the opposite effect by empowering them to make reproductive choices and control their fertility. The assumption that women's primary role is reproduction is a harmful stereotype that undermines their rights and opportunities.

Question 18

Use the data below to find out the growth of income per person (over the entire period, not an annual basis) between the two years listed.

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Question 19

A puzzle: The share of GDP devoted to investment was similar for Canada and South Korea over the past 40 years. However, South Korea had a 6 percent growth rate of average annual income, while Canada had only a 2 percent growth rate over that past 40 years. How can this be explained?

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Question 20

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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Quiz 7: Production and Growth