An economy is producing GDP of $32,000 per week with 100 workers each working

20 hours per week. Labor productivity per hour is

1. 16
2. 74,000
3. 8
4. 320
5. 800

Reconstruction in Europe following World War II demonstrates

1. that winning the war stimulated economic growth in the UK
2. that the marginal product of capital is reduced when the labor force is reduced
3. the importance of a central planning authority to direct new investment to its most productive use
4. None of the above
5. the ease with which military production was converted to civilian production

Suppose the economy has TFP = 1, there are 400 hours worked, and 9 unit of capital and the Cobb-Douglas production function is Output=TFP L^0.5 K^0.5 (note: 400^0.5= 20, 9^0.5= 3)

Output is currently

1. 6,000
2. 36,000
3. 12,000
4. 60
5. 600

The experience of Asia from 1960 to the end of the 20th century suggests that higherinvestment rates

1. cannot be sustained because they ultimately induce higher depreciation rates
2. reduce the rate of economic growth in the short run and increase it in the long run
3. none of the above
4. are not influence by domestic saving or interest rates
5. lead to excess capacity and long-term unemployment

Which of the following is a microeconomic event?

1. the bankruptcy of a competitive firm
2. a change in the exchange rate
3. a drop in stock market prices
4. a shift in monetary policy
5. a fluctuation in interest rates

The workers are employed only for a fixed number of hours per year, then

1. None of the above
2. Labor productivity times population would equal GDP
3. GDP per capita would equal GDP divided by hours worked per person
4. Labor productivity would equal GDP per capita multiplied by hours worked
5. GDP would equal labor productivity multiplied by hours worked per person

From 1965 to 1990, US economic output, adjusted for inflation, quadrupled while the population doubled. This means that output per person

1. remained constant
2. increased 200%
3. rose by a factor of 8
4. fell by 50%
5. doubled

When an economy is highly developed,

1. it no longer needs any human capital.
2. none of these answers
3. capital becomes more productive due to the "catch-up effect."
4. it is nearly impossible for it to become relatively poorer.
5. it is still possible for it to grow quickly because of the investment in R&D.

With few exceptions, the most important element of long-run growth for

industrialized nations is

1. the ability to use the existing capital stock at full capacity
2. the ability to export additional output to less developed countries
3. finding enough labor to operate the existing capital stock
4. adding incrementally to the existing capital stock
5. enhancing the technology embodied in the capital stock

Which of the following does not promote convergence between nations?

1. foreign direct investment
2. equal access to technology
3. there is no intellectual communication between countries
4. the existence of multinational enterprises
5. openness to foreign trade

Ethical norms in, for instance, Confucianism

1. are not captured in the production functions used for growth accounting
2. are measured as part of labor input
3. are assumed to influence total factor productivity
4. have no effect on economic output, and so are deliberately excluded from growth accounting
5. are treated as 'social capital' in the production function

If the marginal product of capital is constant,

1. output does not increase when more capital is used in production
2. the economy does not reach a steady state
3. the stock of capital never changes
4. investment is always equal to depreciation
5. technological progress cannot shift the production function