Economics MCQs

Page No. 174

Once a country is wealthy ?


a it no longer needs any human capital

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b capital becomes more productive due to the “catch-up- effect”

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c none of these answers

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dit may be harder for it to grow quickly because of the diminishing returns to capital

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Many East Asian countries are growing very quickly because ?


aThey save and invest an unusually high percentage of their GDP

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bThey have always been wealthy and will continue to be wealthy, which is known as the “snowball effect”

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chey are imperialists and have collected wealth from previous victories in war

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dThey have enormous natural resources.

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


aencourage foreigners to investment in your country

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bencourage saving and investment

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cnationalize major industries

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dencourage research and development

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Which of the following expenditures to enhance productivity is most likely to emit a positive externality ?


aMegabank buys a new computer

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b Naila pays her university tuition fees.

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cOGDC leases a new oil field

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dIndus Motors buys a new drill press

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If Toyota builds a new plant in the north of England ?


aNone of these answers

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bThere has been an increase in foreign portfolio investment in the UK

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cOnce the plant starts producing cars UK GDP will rise less than UK GNP

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donce the plant starts producing cars UK GDP will rise more than UK GNP

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Which of the following is an example of foreign portfolio investment ?


a Toyota builds a new plant in the north of England

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b EDF of France buys shares in Scottish & Southern Energy of the UK, and Scottish & Southern Energy uses the Proceeds to build a new hydro-electric power station in Scotland

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cDeutsche Bank of Germany buys some new software from UK Supplier

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dJCB builds a new plant near Manchester

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Which of the following describes an increase in technological knowledge ?


aA farmer sends his child to agricultural college and the child returns to work on the farm

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bA farmer hires another day laborer

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cA farmer buys another tractor

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dA farmer discovers that it is better to plant in the spring rather than in the fall

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Thomas Malthus argued that ?


anone of these answers

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b an ever-increasing population is constrained only by the food supply resulting in chronic faminies

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ctechnological progress will continuously generate improvement in productivity and living standards.

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dlabor is the only true factor of production

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Copper is an example of ?


aa renewable natural resource

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bphysical capital

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ctechnology

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da non-renewable natural resource

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Which of the following statements is true ?


aCountries all have the same growth rate and level of output because any country can obtain the same factors of production

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bCountries have great variance in both the level and growth rate of GDP/person thus poor countries can become relatively rich over time

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cCountries may have different level of GDP/person but they all grow at the same reate

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d Countries may have a different growth rate but they all have the same level of GDP/person

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