Question 1

A country's standard of living depends on its ability to produce goods and services.

Accepted Answer

A country's standard of living is largely determined by its productivity, which is the ability to produce goods and services efficiently. The greater a country's productivity, the higher its standard of living.

Question 2

The population growth rate tends to be higher in developed countries than in developing countries.

Accepted Answer

The population growth rate tends to be higher in developing countries than in developed countries. This is mainly because of factors such as high fertility rates, lower levels of healthcare, and limited access to family planning resources in developing countries. On the other hand, developed countries tend to have lower fertility rates and better access to healthcare and family planning resources, leading to a lower population growth rate.

Question 3

At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why.

Accepted Answer

The answer of At first patents might seem like a...

Question 4

Compare and contrast the population theories of Malthus and Kremer.

Accepted Answer

The answer of Compare and contrast the population theories of...

Question 5

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 1987 to 2005.

Accepted Answer

The answer of Use the data on U.S. real GDP...

Question 6

What is the difference between human capital and technology?

Accepted Answer

The answer of What is the difference between human capital...

Question 7

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.

Accepted Answer

The answer of The catch-up effect says that countries with...

Question 8

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

Accepted Answer

The answer of Why does a nation's standard of living...

Question 9

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?

Accepted Answer

The answer of Some economists argue that it is possible...

Question 10

Countries with high population growth rates tend to have lower levels of educational attainment.

Accepted Answer

This is because in countries with high population growth rates, there may not be enough resources to provide education to all the children. Furthermore, families may prioritize having more children over investing in their education. As a result, the educational attainment levels may be lower in such countries.

Question 11

How do outward-oriented policies affect a nation's productivity?

Accepted Answer

The answer of How do outward-oriented policies affect a nation's...

Question 12

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?

Accepted Answer

The answer of Some data that at first might seem...

Question 13

Economist Michael Kremer found that world growth rates fell as population increased.

Accepted Answer

Michael Kremer actually found the opposite - that world growth rates increased as population increased. This is known as the "population-growth paradox."

Question 14

In addition to investment in physical and human capital, what other public policies might a country adopt to increase productivity?

Accepted Answer

The answer of In addition to investment in physical and...

Question 15

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 labor productivity.

Accepted Answer

The answer of Why is productivity related to the standard...

Question 16

What is a production function? Write an equation for a typical production function, and explain what each of the terms represents.

Accepted Answer

The answer of What is a production function? Write an...

Question 17

In countries where women are discriminated against, policies that increase the likelihood of career success and educational opportunities for women are likely to decrease the birth rate.

Accepted Answer

If women have greater access to education and career opportunities, they are more likely to delay or choose not to have children in order to focus on their careers. Therefore, an increase in women's career success and educational opportunities is likely to lead to a decrease in the birth rate.

Quiz 7: Production and Growth