1. What is our preferred measure for cross-country welfare comparisons? a) The u
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Question
1. What is our preferred measure for cross-country welfare comparisons?
a) The unemployment rate.
b) PPP GDP per capita.
c) The capital-output ratio.
d) Inflation rates.
2. We performed calculations in class to determine how important savings rates and population growth rates were for explaining cross-country income differences. What was the main conclusion from these calculations?
a) Savings rates explained most of cross-country income differences, while population growth rates were unimportant.
b) Savings rates and population growth rates combined to explain most of cross-country income differences.
c) Savings and population growth rates explained only a modest part of cross-country income differences.
d) Savings rates and population growth rates explained none of the cross-country income differences.
3. Suppose that a country raises its investment rate. According to the Harrod-Domar model, how does this affect its output per worker in the long run?
a) It permanently raises the level but not the growth rate.
b) It permanently raises the growth rate but not the level.
c) It permanently raises both the level and the growth rate.
d) It has only temporary, not permanent effects on level and the growth rate.
5. Suppose that a country raises its productivity. According to the Solow model for education, how does this affect its output per worker in the long run?
a) It permanently raises the level but not the growth rate.
b) It permanently raises the growth rate but not the level.
c) It permanently raises both the level and the growth rate.
d) It has only temporary, not permanent effects on level and the growth rate.
6. Which of the following corrections will make India and China look much richer as compared to the United States?
a) Measuring their GDP instead of their GNP.
b) Adjusting from GDP to GDP per capita.
c) Adjusting by purchasing power parity instead of market exchange rates.
d) Accounting for differences in life expectancy
7. The Tennessee STAR experiment randomly assigned some children to large and some to small classrooms to gauge the effect of small classrooms on student achievement. Suppose that you found out that parents of children in large classrooms complained to have their children moved, or withdrew them to private schools. What would you be most directly worried about?
a) The cost of the experiment. b) The internal validity of the experiment. c) The external validity of the experiment. d) The duration of the experiment.
8. How many steady states are there in the Solow model? a) 0 b) 1 c) 2 d) 3
9. Which of the following happens first in the Demographic Transition? a) Life expectancy rises. b) Fertility falls c) Fertility experiences a “baby boom”. d) The net rate of reproduction falls.
10. What country has the lowest measured education levels? a) Burkina Faso. b) Nepal. c) Mozambique. d) Mali
Explanation / Answer
1. PPP GDP per capita( It control the method by converting the GDP to coomon mesaurable units)
2. Savings and population growth rates explained only a modest part of cross-country income differences.( Large difference in cross country income is due to difference in technology)
3.It has only temporary, not permanent effects on level and the growth rate.( Investment has only one time impact on output level)
5) It permanently raises both the level and the growth rate.(Productivity raises the ability of workers thus driving both output per worker and capital per worker)
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