Question

If a cobbler buys leather for €100 and thread for €50 and uses them to produce and sell €400 worth of shoes to consumers, the contribution to GDP is

1. €50.
2. €150.
3. €550.
4. €400.

A multiple-choice question with one possible answer.(Required)

Thomas Malthus argued that

1. an ever increasing population is constrained only by the food supply, resulting in chronic famines.
2. private charities and government aid will improve the welfare of the poor.
3. labour is the only true factor of production.
4. technological progress will continuously generate improvements in productivity and living standards.

A multiple-choice question with one possible answer.(Required)

To increase growth, governments should do all of the following except

1. nationalize major industries.
2. encourage research and development.
3. encourage foreigners to investment in your country.
4. encourage saving and investment.

A multiple-choice question with one possible answer.(Required)

Once a country is wealthy,

1. it may be harder for it to grow quickly because of the diminishing returns to capital.
2. it is nearly impossible for it to become relatively poorer.
3. it no longer needs any human capital.
4. capital becomes more productive due to the "catch-up effect."

A multiple-choice question with one possible answer.(Required)

Which of the follows is a reasonable measure of the standard of living in a country

1. the growth rate of nominal GDP per person.
2. real GDP.
3. nominal GDP
4. real GDP per person.

A multiple-choice question with one possible answer.(Required)

Which of the following is probably the least relevant to a country’s growth rate?

1. the education of the workforce
2. short-term interest rates
3. infrastructure such as roads or computer networks
4. legal restrictions on capital mobility and investment

A multiple-choice question with one possible answer.(Required)

If all other factors, including human capital, were the same, then compared with Europe, the rate of return on investment in Brazil should be

1. indeterminate, because the emerging markets are not in equilibrium
2. lower, due to a tradition of central planning
3. approximately the same, reflecting competitive pressure
4. higher, signaling a greater need for new plants and equipment

A multiple-choice question with one possible answer.(Required)

Which of the following does promote convergence between nations?

1. international patent protection
2. no foreign trade
3. no foreign direct investment
4. equal access to technology

Answer 1

1. Option D Euro 400

Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. It does not include intermediate goods. Only value of final good which is shoes will be included in GDP.

2.Option A

Malthus argued that population growth grows
exponentially (1,2,4,8) and food production grows arithmetically (1,2,3,4).Malthus argued that eventually, the population would always outstrip food supply causing starvation.

3.Option A

Control of public industries by bureaucrats can lead to less of an incentive to execute the aims of that industry and as such the public is usually less aware of this and governments can often hide figures more easily than private industry, thus hampering economic development.

4.Option A

Even though deepening human and physical capital will tend to increase GDP per capita, the law of diminishing returns suggests that as an economy continues to increase its human and physical capital, the marginal gains to economic growth will diminish.