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Economics 101 Practice Test: Production and Growth
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In economics, economic growth is the increase in the production of goods and services over time. Economic growth is important because it means that the quality and quantity of goods and services increase.  Economic growth can be measured in nominal or real terms. Real terms are adjusted to remove inflation. The most common measure of economic growth is real GDP, which is the total value of everything produced in an economy, adjusted for inflation.  Economic growth can be generated by: Increasing physical capital goods and Improving technology.  Economic growth can lead to higher stock... Show more
Economics 101 Practice Test: Production and Growth
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25 Questions

1. Per-capita real GDP in China is about equal to per-capita real GDP in the United States in
2. In the length of one generation, which of the following countries has gone from being among the poorest countries in the world to being among the richest?
3. If there are constant returns to scale, the production function can be written as
4. In the 1800s, Europeans purchased stock in American companies that used the funds to build railroads and factories. The Europeans made
5. Generally, the main cause of famine is
6. A large and sudden increase in the number of workers is likely to
7. Which would increase the capital stock of El Salvador and provide returns to U.S. investors?
8. When Ben Franklin died he left $5,000 to be invested for a period of 200 years to benefit medical students and scientific research. According to the “rule of 70,” how often would this money have doubled if it grew 7 percent per year every year?
9. Engineering students learn long-established methods for constructing bridges, in and of itself this learning increases
10. Consider the following two sentences. According to the data, countries with higher investment relative to GDP, tend to have higher growth rates of real GDP per person. This relation is not perfect though, because an increase in the physical capital stock increases output per person more in a country with much capital than in a similar country with less capital.
11. Over the past century in the United States, average income as measured by real GDP per person has grown about
12. From 1973 to 1998, U.S. productivity growth was slower than from 1959 to 1973. Which of the following is correct?
13. In a market economy, scarcity of resources is reflected in
14. Which of the following is human capital?
15. In comparison to other countries, Japan had a high growth rate over the last 100 years. Japan’s average annual growth rate of real GDP per person was a bit less than
16. Which of the following is incorrect?
17. Productivity is the
18. The primary reason that U.S. living standards are higher today than they were a century ago is that
19. Compounding refers to the
20. Suppose an economy that was roughly the size of Australia had a population of 19 million and real GDP of about 380,000 million U.S. dollars in 1998. Suppose further that in 1999 population was about 19.5 million and real GDP was about 401,500 million dollars. What are the approximate growth rates of real GDP and of real GDP per-capita?
21. Which of the following is incorrect?
22. Typically, countries in Africa
23. In the last 100 years U.S. per-capita real GDP grew about
24. The logic behind the catch-up effect is that
25. The productivity of U.S. workers is higher than that of workers in many countries that have less capital. Which of the following arguments concerning these facts is logically consistent?

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