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comparative gdp MCQs

Practise focused comparative gdp questions with marked answers for exam preparation and subject revision.

comparative gdp Mcqs

1. If Toyota builds a new plant in the north of England ?
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A. once the plant starts producing cars UK GDP will rise more than UK GNP

B. There has been an increase in foreign portfolio investment in the UK

C. None of these answers

D. Once the plant starts producing cars UK GDP will rise less than UK GNP

2. To increase growth, governments should do all of the following except ?
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A. encourage saving and investment

B. nationalize major industries

C. Promote free trade

D. encourage research and development

E. encourage foreigners to investment in your country

3. Which of the following describes an increase in technological knowledge ?
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A. A farmer sends his child to agricultural college and the child returns to work on the farm

B. A farmer buys another tractor

C. A farmer hires another day laborer

D. A farmer discovers that it is better to plant in the spring rather than in the fall

4. Which of the following best describes the rate of growth in productivity in the United states over the last fifty years ?
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A. Productivity growth has been steady over the last 50 years

B. Productivity grew slowly from the 1950s through the 1970s and then began to accelerate probably due to advances in computer technology

C. Productivity has been growing more slowly every decade since world War II

D. Productivity grew quickly in the 1950s and 1960s more slowly from the early 1970s through 1995 and then quickly again

5. The opportunity cost of growth is ?
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A. a reduction in current saving

B. a reduction in current investment

C. a reduction in taxes

D. a reduction in current consumption

6. When a national has very little GDP per person ?
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A. an increase in capital will likely have little impact on output

B. it has the potential to grow relatively quickly due to the catch-up-effect

C. It must be a small nation.

D. it is doomed to being relatively poor forever

E. none of these answers

7. Which of the following government policies is least likely to increase likely to increase growth in Africa ?
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A. eliminate civil war

B. All of these answers would increase growth

C. increase expenditure on public education

D. increase restrictions on the importing of American tractors and electronics

8. Which of the following statements is true ?
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A. Countries all have the same growth rate and level of output because any country can obtain the same factors of production

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

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

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

9. If in Pakistan real GDP/person in 2004 is Rs18,073 and real GDP/person is 2005 is Rs18,635 What is the growth rate of real output per person over this period ?
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A. 3.0 percent

B. 18.0 percent

C. 18.6 percent

D. 3.1 percent

10. Once a country is wealthy ?
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A. none of these answers

B. capital becomes more productive due to the catch-up- effect

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

D. it no longer needs any human capital

11. Thomas Malthus argued that ?
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A. an ever-increasing population is constrained only by the food supply resulting in chronic faminies

B. none of these answers

C. labor is the only true factor of production

D. technological progress will continuously generate improvement in productivity and living standards.

12. Which of the following statements regarding the impact of population growth on productivity is true ?
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A. There is no evidence, yet that rapid population growth stretches natural resources to the point that it limits growth in productivity

B. All of these answers

C. Rapid population growth may dilute the capital stock lowering productivity

D. Rapid population growth may promote technological progress increasing productivity.

13. A reasonable measure of the standard of living in a country is ?
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A. Real GDP

B. nominal GDP per person.

C. The growth rate of nominal GDP per person

D. real GDP per person

14. Which of the following expenditures to enhance productivity is most likely to emit a positive externality ?
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A. Naila pays her university tuition fees.

B. OGDC leases a new oil field

C. Indus Motors buys a new drill press

D. Megabank buys a new computer

15. Which of the following is an example of foreign portfolio investment ?
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A. Toyota builds a new plant in the north of England

B. JCB builds a new plant near Manchester

C. 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

D. Deutsche Bank of Germany buys some new software from UK Supplier

16. Our standards of living is most closely related to ?
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A. our supply of capital because everything of value is produced by machinery

B. our supply of natural resources because they limit production

C. our productivity because our income is equal to what we produce

D. how hard we work:

17. If a production function exhibits constant returns to scale ?
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A. doubling all of the inputs doubles output

B. doubling all of the inputs more than doubles output due to the catch-up effect

C. doubling all of the inputs has absolutely no impact on output because output is constant

D. doubling all of the inputs less than doubles output due to diminishing returns

18. For a given level of technology, we should expect an increase in productivity within a nation when there is an increase in each of the following except ?
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A. labor

B. natural resources/worker

C. human capital/worker

D. physical capital/worker

19. Copper is an example of ?
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A. a renewable natural resource

B. technology

C. physical capital

D. a non-renewable natural resource

20. Many East Asian countries are growing very quickly because ?
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A. They have always been wealthy and will continue to be wealthy, which is known as the snowball effect

B. They have enormous natural resources.

C. They are imperialists and have collected wealth from previous victories in war

D. They save and invest an unusually high percentage of their GDP

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