Question 1

Government corruption

Accepted Answer

When governments are corrupt, they may interfere with the functioning of markets by controlling access to resources, manipulating regulations, or obstructing competition. These actions can impede the coordinating power of markets, limiting their ability to allocate resources efficiently and effectively. Additionally, corruption can discourage investment by increasing uncertainty and creating an unstable business environment. Investors may be less likely to invest in a country where corruption is prevalent, as they may perceive it as a higher-risk environment. Thus, A is the correct answer because corruption impedes the coordinating power of markets and discourages investment.

Question 2

Educated people may generate ideas that increase production.These ideas

Accepted Answer

All of the given options are correct. 
A) Educated individuals may come up with innovative ideas that can increase production, which can lead to a greater return to society than to that individual. 
B) The government may incentivize education as it can lead to external benefits for society. 
C) The innovative ideas generated by educated people can be seen as external benefits of education.

Question 3

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

Each additional year of schooling has historically raised a person's wage on average by about 10 percent in the U.S. This is due to the fact that higher levels of education tend to lead to higher-paying jobs and increased skill sets.

Question 4

Investment from abroad

Accepted Answer

Investment from abroad is viewed as a means of increasing growth by economists. For poor countries, it is a way to learn the state-of-the-art technologies developed and used in richer countries. However, this often necessitates the removal of limitations imposed by governments on foreign ownership of domestic capital.

Question 5

According to research by Robert Fogel,what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

Accepted Answer

Robert Fogel's research indicated that around 20 percent of the British population in 1780 was so malnourished that they were unable to perform manual labor.

Question 6

The return to schooling for society is higher than the return to schooling for the individual if

Accepted Answer

When human capital is seen as conveying positive externalities, it means that the benefits of education go beyond the individual who has undergone the training, and spill over to society at large. As a result, the return to schooling for society would be higher than the return to schooling for the individual. This happens because educated individuals can help increase productivity, innovation, reduce crime rates, and generate better health outcomes.

Question 7

Which of the following statements is correct?

Accepted Answer

All three statements are correct. In order for the price system to function efficiently and effectively, property rights are necessary. Property rights provide individuals and businesses with the ability to control and manage their resources, which allows for the development of market transactions. Well-established and well-enforced property rights are generally associated with increased investment, economic growth, and higher standards of living.

Question 8

An organization that tries to encourage the flow of investment to poor countries is the

Accepted Answer

The World Bank is an organization that specializes in providing financial and technical assistance to developing countries. Its main goal is to reduce poverty and improve the living conditions of people in these countries. The World Bank encourages investment in poor countries by providing loans, grants, and other forms of financial support to governments and private companies. It also supports policy and institutional reforms to create a more favorable business climate and attract more investment.

Question 9

Which of the following is generally an opportunity cost of investment in human capital?

Accepted Answer

When an individual invests in their human capital, they are typically sacrificing present wages to acquire skills and education that will lead to higher future earnings. This foregone income is the opportunity cost of investing in human capital. While increased earning potential and future job security are potential benefits of this investment, they are not opportunity costs.

Question 10

Suppose a person receives an education in her home country.Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

Accepted Answer

Externalities, such as improved productivity and innovation, can benefit the entire economy, leading to a larger increase in GDP than just the individual's income. Brain drain, however, would not contribute to this effect.

Question 11

According to research by Robert Fogel,people in Britain grew taller because of

Accepted Answer

Robert Fogel's research suggests that the increase in height among people in Britain can be attributed to higher caloric intake. Furthermore, this increase in height is associated with higher productivity. Thus, choice D (higher caloric intake and association with higher productivity) is the best choice.

Question 12

A country's human capital increases

Accepted Answer

Human capital refers to the knowledge, skills, and abilities of individuals that contribute to their productivity in the workforce. Education and health are two key factors that contribute to human capital. Therefore, if workers become better educated or healthier, a country's human capital increases.

Question 13

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

Accepted Answer

Robert Fogel believed that nutrition, specifically improvements in health and well-being, played a significant role in determining long-run economic growth. His research suggested that improvements in overall health led to increased productivity and economic growth. While education and research and development are also factors that can contribute to economic growth, they were not the focus of Fogel's work. Trade restrictions, on the other hand, are likely to have a negative impact on economic growth by limiting trade and investment opportunities.

Question 14

In some countries it is time consuming and costly to establish ownership of property.Reforms to reduce these costs would likely

Accepted Answer

Reforms to reduce the costs and time involved in establishing ownership of property would incentivize more people to invest in property and would increase the efficiency of the real estate market. This in turn would lead to an increase in economic activity, resulting in a higher real GDP and productivity. Therefore, the correct choice is B) raise real GDP and productivity.

Question 15

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Accepted Answer

Property rights refer to the ability of individuals or groups to exercise control over the resources they own, including the ability to use, sell, or destroy those resources as they see fit. This includes both tangible property, such as land and buildings, as well as intangible property, such as intellectual property rights.

Question 16

Educational attainment tends to be

Accepted Answer

This is because in countries with high population growth, there may not be enough resources or funding to support education for everyone. This can lead to a lack of access to schools and educational opportunities, particularly for those in impoverished areas. As a result, overall educational attainment tends to be lower in these countries.

Question 17

Investment in

Accepted Answer

Both physical capital and human capital involve an opportunity cost, as investing in one means forgoing potential investments in other areas. Option A is incorrect because it implies that investment in human capital has no opportunity cost, which is not true. Option C is incorrect because investment in human capital does involve externalities, such as the spillover effects of an educated workforce on the broader economy. Finally, option D is incorrect because numerous studies have shown that investment in human capital is critical for a country's long-term economic success.

Question 18

According to research by Robert Fogel,what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

Accepted Answer

Robert Fogel's research suggests that 30 percent of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake.

Question 19

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Accepted Answer

In the U.S., each additional year of schooling typically raises a person's wage by about 10 percent. In less developed countries, the gap between the wages of educated and uneducated workers is larger due to the higher relative scarcity of educated individuals.

Question 20

Which of the following is an example of the "brain drain?"

Accepted Answer

The brain drain refers to the emigration of a country's most highly educated workers to richer countries, which results in a loss of human capital for the country of origin.

Quiz 12: Production and Growth: Economic Growth and Public Policy

Government corruption

Educated people may generate ideas that increase production.These ideas

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Investment from abroad

According to research by Robert Fogel,what proportion of the British population in 1780 was so malnourished that they could not perform manual labor?

The return to schooling for society is higher than the return to schooling for the individual if

Which of the following statements is correct?

An organization that tries to encourage the flow of investment to poor countries is the

Which of the following is generally an opportunity cost of investment in human capital?

Suppose a person receives an education in her home country.Which of the following will tend to make the increase in GDP of the person's home country larger than the increase in this person's income?

According to research by Robert Fogel,people in Britain grew taller because of

A country's human capital increases

Economist Robert Fogel focused on which of the following factors as one determinant of long-run economic growth?

In some countries it is time consuming and costly to establish ownership of property.Reforms to reduce these costs would likely

Which of the following terms is used to refer to the ability of people to exercise authority over the resources they own?

Educational attainment tends to be

Investment in

According to research by Robert Fogel,what proportion of the increase in the standard of living in Britain between 1790 and 1980 can be accounted for by greater caloric intake?

In the U.S. ,each additional year of schooling has historically raised a person's wage on average by about

Which of the following is an example of the "brain drain?"