Question 1

How would an economist typically assess the extent of economic progress in a nation?

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Question 2

Compare and contrast the population theories of Malthus and Kremer.

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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.

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Question 4

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

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A country's standard of living is directly linked to its productivity and ability to produce goods and services which generates income and creates jobs.

Question 5

What is the difference between human capital and technology?

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Question 6

Consider the nations of India, Indonesia, and Japan. Over the past century, which of these three nations has experienced, by far, more rapid economic growth than the other two nations?

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Question 7

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

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Question 8

The level of real GDP is a good measure of economic prosperity, and the growth of real GDP is a good measure of
__________.

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Question 9

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

Question 10

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

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Countries with high population growth rates often have higher birth rates and struggle to provide sufficient resources, such as schools and teachers, to educate all children. This can lead to lower levels of educational attainment in those countries.

Question 11

In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?

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Question 12

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 13

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 14

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

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Question 15

In the United States over the past century, real GDP per person has grown by about
percent per year.

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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

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 18

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

Accepted Answer

Michael Kremer's research actually found the opposite - that economic growth rates increased as population increased. This is known as the demographic dividend.

Question 19

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 20

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.

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

Quiz 25: Production and Growth