Chapter12e

A nation’s standard of living is measured by its

• real GDP.
• real GDP per person.
• nominal GDP.
• nominal GDP per person.

The level of real GDP person

• differs widely across countries, but the growth rate of real GDP per person is similar across countries.
• is very similar across countries, but the growth rate of real GDP per person differs widely across countries.
• and the growth rate of real GDP per person are similar across countries.
• and the growth rate of real GDP per person vary widely across countries.

Which of the following is a determinant of productivity?

• human capital
• physical capital
• natural resources
• All of the above are correct.

Which of the following is a part of your Economics professor’s human capital?

• the things she learned at some prestigious university
• her copy of Mankiw’s text
• her chalk holder
• All of the above are correct.

The equipment and structures available to produce goods and services are called

• physical capital.
• human capital.
• the production function.
• technology.

In a market economy, scarcity of resources is most clearly reflected in

• supply.
• demanD.
• market prices.
• the stock of the resource.

Using the production function and notation in the text, K/L measures

• natural resources per worker.
• human capital per worker.
• output per worker.
• physical capital per worker.

If a country’s saving rate increases, in the long run

• productivity is higher, real GDP per person is not higher.
• real GDP per person is higher, productivity is not higher.
• productivity and real GDP per person are both higher.
• neither productivity nor real GDP per person are higher.

Other things equal, relatively poor countries tend to grow

• slower than relatively rich countries; this is called the poverty trap.
• slower than relatively rich countries; this is called the Malthus effect.
• faster than relatively rich countries; this is called the catch-up effect.
• faster than relatively rich countries; this is called the constant-returns-to-scale effect.

Suppose Japanese-based Sony Corporation builds and operates a new chip factory in the United States. Future production from such an investment would

• increase U.S. GNP more than it would increase U.S. GDP.
• increase U.S. GDP more than it would increase U.S. GNP.
• not affect U.S. GNP, but would increase U.S. GDP.
• have no affect on U.S. GNP or GDP.