Question 1

The catch-up line

Accepted Answer

A) is vertical. 
B) is horizontal. 
C) is downward sloping. 
D) is upward sloping. 
E) has a V-shape. 
A) is vertical. 
B) is horizontal. 
C) is downward sloping. 
D) is upward sloping. 
E) has a V-shape.

Question 2

Is there a geographical pattern to the distribution of income in the world?

Accepted Answer

Yes. It seems that a country i

Question 3

Why is it necessary for individual property rights to be established if there is to be economic growth?

Accepted Answer

Property rights enable busines

Question 4

The IMF is a financial intermediary.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following best explains why the Industrial Revolution began where it did?

Accepted Answer

A) Strong government leadership 
B) Colonialism and slavery 
C) A larger stock of key natural resources 
D) Capitalism 
E) The more advanced state of scientific knowledge 
A) Strong government leadership 
B) Colonialism and slavery 
C) A larger stock of key natural resources 
D) Capitalism 
E) The more advanced state of scientific knowledge

Question 6

Which of the following is not a true fact about economic development in today's world?

Accepted Answer

A) Every year, some 3 million people die for lack of immunization worldwide. 
B) Every year, some 1 million people die from malaria worldwide. 
C) Every year, some 3 million people die from water-related diseases worldwide. 
D) Every year, some 2 million people die from exposure to stove smoke inside their houses worldwide. 
E) Today there are less than 200 million people living on less than the equivalent of $2 a day worldwide. 
A) Every year, some 3 million people die for lack of immunization worldwide. 
B) Every year, some 1 million people die from malaria worldwide. 
C) Every year, some 3 million people die from water-related diseases worldwide. 
D) Every year, some 2 million people die from exposure to stove smoke inside their houses worldwide. 
E) Today there are less than 200 million people living on less than the equivalent of $2 a day worldwide.

Question 7

The informal economy in many less developed countries

Accepted Answer

A) consists of legitimate businesses that do not want to take the time to fill out the required paperwork. 
B) has better defined property rights than the formal sector. 
C) tends to be less productive than the formal economy. 
D) tends to be smaller than the formal economy. 
E) exists mainly because people are uneducated. 
A) consists of legitimate businesses that do not want to take the time to fill out the required paperwork. 
B) has better defined property rights than the formal sector. 
C) tends to be less productive than the formal economy. 
D) tends to be smaller than the formal economy. 
E) exists mainly because people are uneducated.

Question 8

The rate of population growth and the level of productivity are inversely related, all else the same.

Accepted Answer

A) True 
 B)False

Question 9

The global financial crisis that began in December of 2007 has revealed that the world is not as interconnected as most economists expected.

Accepted Answer

A) True 
 B)False

Question 10

South Korea's development in the last 40 years (or lack thereof) represents clear evidence against the economic growth theory, as its data do not fall along the catch-up line.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is the best example of direct investment?

Accepted Answer

A) A U.S.company acquires more than 10 percent ownership of a foreign company. 
B) A foreign bank lends more than 10 percent of the funds needed by a business. 
C) A foreign bank lends less than 10 percent of the funds needed by a business. 
D) A U.S.company acquires less than 10 percent ownership of a foreign company. 
E) The Bank of America extends a loan to a foreign country. 
A) A U.S.company acquires more than 10 percent ownership of a foreign company. 
B) A foreign bank lends more than 10 percent of the funds needed by a business. 
C) A foreign bank lends less than 10 percent of the funds needed by a business. 
D) A U.S.company acquires less than 10 percent ownership of a foreign company. 
E) The Bank of America extends a loan to a foreign country.

Question 12

What justifies the proposition that China is a major force in the world economy?

Accepted Answer

China's level of GDP is larger

Question 13

Portfolio investment is the purchase of capital by a foreign firm in more than a 10 percent ownership share in a domestic firm.

Accepted Answer

A) True 
 B)False

Question 14

For most of history until the industrial revolution, the rate of economic growth throughout the world has averaged

Accepted Answer

A) 1 percent. 
B) 0 percent. 
C) 3 percent. 
D) 4 percent. 
E) 2 percent. 
A) 1 percent. 
B) 0 percent. 
C) 3 percent. 
D) 4 percent. 
E) 2 percent.

Question 15

Which of the following best explains the decline in population growth in the major industrialized countries?

Accepted Answer

A) Lack of natural resources 
B) A reduction in life expectancy 
C) High income per capita 
D) Not enough leisure time 
E) The increased likelihood of both parents working 
A) Lack of natural resources 
B) A reduction in life expectancy 
C) High income per capita 
D) Not enough leisure time 
E) The increased likelihood of both parents working

Question 16

China is now the world's second largest economy and so it is classified as an advanced economy.

Accepted Answer

A) True 
 B)False

Question 17

The term developing country describes those countries that are relatively poor.

Accepted Answer

A) True 
 B)False

Question 18

People choose to have fewer children if

Accepted Answer

A) the life expectancy of their children increases. 
B) they are less educated. 
C) they are poor. 
D) child labor is a common practice. 
E) the life expectancy of their children decreases. 
A) the life expectancy of their children increases. 
B) they are less educated. 
C) they are poor. 
D) child labor is a common practice. 
E) the life expectancy of their children decreases.

Question 19

The size of the informal economy is

Accepted Answer

A) directly related to the government's willingness to support individual property rights. 
B) usually small in developing countries. 
C) directly related to the cost of setting up a legal business. 
D) inversely related to the cost of setting up a legal business. 
E) determined mainly by the drug trade. 
A) directly related to the government's willingness to support individual property rights. 
B) usually small in developing countries. 
C) directly related to the cost of setting up a legal business. 
D) inversely related to the cost of setting up a legal business. 
E) determined mainly by the drug trade.

Question 20

Poor countries have

Accepted Answer

A) the same saving rates as rich countries. 
B) lower saving rates than rich countries. 
C) frequent current account surpluses. 
D) negative saving rates. 
E) the same saving rates as rich countries, but a smaller volume of savings. 
A) the same saving rates as rich countries. 
B) lower saving rates than rich countries. 
C) frequent current account surpluses. 
D) negative saving rates. 
E) the same saving rates as rich countries, but a smaller volume of savings.

Exam 28: Economic Growth Around the World

The catch-up line

Is there a geographical pattern to the distribution of income in the world?

Why is it necessary for individual property rights to be established if there is to be economic growth?

The IMF is a financial intermediary.

Which of the following best explains why the Industrial Revolution began where it did?

Which of the following is not a true fact about economic development in today's world?

The informal economy in many less developed countries

The rate of population growth and the level of productivity are inversely related, all else the same.

The global financial crisis that began in December of 2007 has revealed that the world is not as interconnected as most economists expected.

South Korea's development in the last 40 years (or lack thereof) represents clear evidence against the economic growth theory, as its data do not fall along the catch-up line.

Which of the following statements is the best example of direct investment?

What justifies the proposition that China is a major force in the world economy?

Portfolio investment is the purchase of capital by a foreign firm in more than a 10 percent ownership share in a domestic firm.

For most of history until the industrial revolution, the rate of economic growth throughout the world has averaged

Which of the following best explains the decline in population growth in the major industrialized countries?

China is now the world's second largest economy and so it is classified as an advanced economy.

The term developing country describes those countries that are relatively poor.

People choose to have fewer children if

The size of the informal economy is

Poor countries have

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

International Trade

International Finance

Filters