Comparative GDP

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1.Given that Pakistan's real GDP per capita was Rs18,073 in 2004 and increased to Rs18,635 in 2005, what is the percentage growth rate of real output per person during this period?

2.Which of the following government actions is least effective in promoting economic growth in Africa?

Boost spending on public educationEnd internal armed conflictsAll of the above measures would enhance growthTighten import controls on American tractors and electronic goods

3.Which factor is most directly linked to the standard of living?

The amount of effort we put into workThe availability of capital since machinery creates all valuable goodsOur level of productivity, as our earnings correspond to our outputThe quantity of natural resources, which restricts production

4.How has the rate of productivity growth in the United States changed over the past fifty years?

Productivity growth has remained consistent throughout the last five decades.Productivity has declined in growth rate steadily since the end of World War II.Productivity increased rapidly during the 1950s and 1960s, slowed down from the early 1970s until 1995, and then accelerated again.From the 1950s to the 1970s, productivity growth was slow, but it picked up later, likely due to improvements in computer technology.Productivity growth has shown no clear pattern over the past fifty years.

5.Which statement accurately describes the effects of population growth on productivity?

Currently, there is no proof that rapid population increase depletes natural resources enough to restrict productivity growth.All of the above statements are correct.A fast-growing population can reduce capital per worker, leading to decreased productivity.An expanding population might encourage technological innovation, thereby boosting productivity.

6.What happens to output when all inputs are increased proportionally in a production function with constant returns to scale?

Increasing all inputs by a factor of two results in output increasing by more than twice due to acceleration effects.Doubling every input leaves the output unchanged since output remains fixed.Doubling all inputs causes output to increase by less than double because of diminishing productivity.Doubling all inputs leads to exactly double the output.

7.Assuming technology remains constant, which of the following factors would not lead to higher productivity in a country if it increases?

Labor force sizeAmount of physical capital per workerLevel of human capital per workerQuantity of natural resources per worker

8.What challenge does a wealthy nation face when trying to sustain rapid economic growth?

It completely eliminates the need for skilled labor.Its capital experiences increased efficiency because of the 'catch-up effect.'None of the provided choices are correct.Growth may slow down due to diminishing returns on additional capital.

9.What is the primary reason behind the rapid economic growth of many East Asian nations?

They allocate and invest a significantly large portion of their GDP.Their longstanding wealth ensures continued prosperity, a phenomenon called the 'snowball effect.'They expanded their wealth through imperial conquests and war spoils.They possess vast amounts of natural resources.

10.Which of the following actions should a government avoid if it aims to boost economic growth?

Attract foreign investors to your nationPromote saving and capital investmentTake control of key industries through nationalizationSupport innovation and technological researchEncourage open international trade

11.Which of the following investments aimed at increasing productivity is most likely to generate a positive externality?

A large bank purchases updated computer equipment.Naila covers the cost of her higher education tuition.OGDC secures a lease on a new oil extraction site.Indus Motors acquires a new machine tool for manufacturing.

12.What is the expected impact on the UK’s GDP and GNP when Toyota opens a new manufacturing facility in northern England?

All of the above statements are incorrectThe UK has experienced a rise in foreign portfolio investmentThe UK’s GDP will increase by a smaller amount than its GNP once production beginsThe UK’s GDP will increase more than its GNP after the plant starts operatingNo change will occur in either GDP or GNP

13.Which of the following best illustrates foreign portfolio investment?

Toyota establishes a manufacturing facility in northern England.EDF from France purchases equity in Scottish & Southern Energy in the UK, which then invests the funds in constructing a new hydroelectric power plant in Scotland.Germany's Deutsche Bank acquires software from a UK-based vendor.JCB sets up a new factory close to Manchester.

14.Which option best illustrates an improvement in technological understanding?

A farmer's child attends an agricultural university and later helps on the farm.A farmer employs an additional laborer for daily work.A farmer purchases an extra tractor for the farm.A farmer learns that planting crops in spring yields better results than planting in autumn.

15.What was Thomas Malthus's main argument regarding population growth?

All of the above statements are incorrectPopulation growth is ultimately limited by the availability of food, leading to persistent faminesAdvancements in technology will consistently enhance productivity and quality of lifeLabor constitutes the sole essential factor in productionPopulation growth has no impact on resource availability

16.Which category does copper belong to?

A resource that can be replenished naturallyMan-made tools and machinery used in productionInnovations and methods applied in productionA natural resource that cannot be replaced once depleted

17.Which statement accurately describes the economic differences among countries?

All nations share identical growth rates and output levels since every country has access to the same production factors.There is significant variation in both GDP per capita levels and growth rates across countries, allowing poorer nations the potential to catch up over time.Countries differ in their GDP per capita levels, but their growth rates remain uniform.While growth rates vary among countries, they all maintain the same GDP per capita level.

18.What is the opportunity cost associated with economic growth?

A decrease in present investment levelsA decrease in present consumption levelsA decrease in tax paymentsA decrease in current savings

19.What does it imply when a country's GDP per capita is extremely low?

The country is destined to remain relatively poor indefinitelyNone of the provided choices are correctAdding more capital will probably have minimal effect on productionThe country could experience rapid growth because of the "catch-up effect"The country must be geographically small

20.Which of the following is a reliable indicator of a country's standard of living?

Real GDP per capitaNominal GDP per capitaTotal Real GDPRate of growth of nominal GDP per capita

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