Question 1

In order to achieve a high economic freedom rating, a country must

Accepted Answer

A) elect political officials democratically. 
B) protect property rights, enforce contracts even-handedly, and rely extensively on markets to allocate goods and services. 
C) provide citizens with housing, health care, and other basic goods free of charge. 
D) use the taxing power of the state to redistribute income from the rich to the poor and thereby promote income equality. 
A) elect political officials democratically. 
B) protect property rights, enforce contracts even-handedly, and rely extensively on markets to allocate goods and services. 
C) provide citizens with housing, health care, and other basic goods free of charge. 
D) use the taxing power of the state to redistribute income from the rich to the poor and thereby promote income equality.

Question 2

During 1980-2010, the per-capita incomes of less-developed countries (LDCs)

Accepted Answer

A) grew rapidly. 
B) declined. 
C) were virtually unchanged. 
D) registered a mixed growth record; some grew rapidly while others stagnated. 
A) grew rapidly. 
B) declined. 
C) were virtually unchanged. 
D) registered a mixed growth record; some grew rapidly while others stagnated.

Question 3

Which of the following will increase economic freedom?

Accepted Answer

A) an increase in tariff rates imposed on imported goods 
B) an increase in government spending as a share of the economy 
C) elimination of regulations that make it difficult to start a business 
D) an increase in the rate of inflation and its variability 
A) an increase in tariff rates imposed on imported goods 
B) an increase in government spending as a share of the economy 
C) elimination of regulations that make it difficult to start a business 
D) an increase in the rate of inflation and its variability

Question 4

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

Accepted Answer

Perhaps it is easier to answer the secon

Question 5

In a majority-rules democracy, economic thinking suggests that we should expect to see institutions and policies that

Accepted Answer

A) are short-sighted. 
B) take the long view, sacrificing current benefits to get larger future benefits. 
C) benefit the common citizen at the expense of narrow special interest groups which, after all, have fewer voters. 
D) are biased against income transfer programs, regardless of constitutional limits. 
A) are short-sighted. 
B) take the long view, sacrificing current benefits to get larger future benefits. 
C) benefit the common citizen at the expense of narrow special interest groups which, after all, have fewer voters. 
D) are biased against income transfer programs, regardless of constitutional limits.

Question 6

When making income comparisons across countries, economists generally prefer to use

Accepted Answer

A) the exchange rate conversion method. 
B) the consumer price index ratio method. 
C) the purchasing power parity method. 
D) the interest rate differential conversion method. 
A) the exchange rate conversion method. 
B) the consumer price index ratio method. 
C) the purchasing power parity method. 
D) the interest rate differential conversion method.

Question 7

Which of the following will increase economic freedom?

Accepted Answer

A) subsidies and regulations that favor business 
B) high tariff rates 
C) high marginal tax rates 
D) protection of persons and their property from aggression 
A) subsidies and regulations that favor business 
B) high tariff rates 
C) high marginal tax rates 
D) protection of persons and their property from aggression

Question 8

The per capita incomes of countries in the quartile with the most economic freedom during 1980-2010 were

Accepted Answer

A) slightly lower than those of the quartile of countries with the least economic freedom. 
B) about the same as the quartile of countries with the least economic freedom. 
C) about twice those of the countries with the least economic freedom. 
D) about eight times those of the quartile of countries with the least economic freedom. 
A) slightly lower than those of the quartile of countries with the least economic freedom. 
B) about the same as the quartile of countries with the least economic freedom. 
C) about twice those of the countries with the least economic freedom. 
D) about eight times those of the quartile of countries with the least economic freedom.

Question 9

Which of the following adopted reforms that have substantially improved their economic freedom rating since 1980?

Accepted Answer

A) Ireland 
B) Zimbabwe 
C) Venezuela 
D) Republic of Congo 
A) Ireland 
B) Zimbabwe 
C) Venezuela 
D) Republic of Congo

Question 10

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Accepted Answer

A) The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B) None of the LDCs have been able to match the per capita income growth rate of the United States. 
C) During the last two decades, the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more) have been LDCs. 
D) Both a and c are correct. 
E) All of the above are correct. 
A) The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B) None of the LDCs have been able to match the per capita income growth rate of the United States. 
C) During the last two decades, the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more) have been LDCs. 
D) Both a and c are correct. 
E) All of the above are correct.

Question 11

Compared to countries with less economic freedom, countries with more economic freedom

Accepted Answer

A) achieve higher per person income levels, but they also have higher poverty rates. 
B) grow more rapidly, but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies. 
C) achieve both higher income levels per person and lower rates of poverty. 
D) grow less rapidly and experience higher poverty rates. 
A) achieve higher per person income levels, but they also have higher poverty rates. 
B) grow more rapidly, but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies. 
C) achieve both higher income levels per person and lower rates of poverty. 
D) grow less rapidly and experience higher poverty rates.

Question 12

High income countries with larger governments as a share of GDP have generally

Accepted Answer

A) grown less rapidly than their counterparts with smaller governments. 
B) experienced less deadweight losses resulting from taxes and/or government borrowing. 
C) seen the government decrease in size as real GDP rises. 
D) been able to be more economically efficient. 
A) grown less rapidly than their counterparts with smaller governments. 
B) experienced less deadweight losses resulting from taxes and/or government borrowing. 
C) seen the government decrease in size as real GDP rises. 
D) been able to be more economically efficient.

Question 13

Countries with more economic freedom tend to invest a ____ share of their GDP and the productivity of that investment is ____ than for countries that are less free. (Fill in the blanks.)

Accepted Answer

A) larger; higher 
B) larger; lower 
C) smaller; higher 
D) smaller; lower 
A) larger; higher 
B) larger; lower 
C) smaller; higher 
D) smaller; lower

Question 14

Countries that have adopted liberal reforms and substantially increased their economic freedom rating in recent years

Accepted Answer

A) experienced falling income levels per capita during 1995-2009. 
B) grew slowly during 1995-2009. 
C) achieved impressive growth rates of real GDP per person during 1995-2009. 
D) have grown less rapidly than high income industrial economies. 
A) experienced falling income levels per capita during 1995-2009. 
B) grew slowly during 1995-2009. 
C) achieved impressive growth rates of real GDP per person during 1995-2009. 
D) have grown less rapidly than high income industrial economies.

Question 15

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

Accepted Answer

A) grow more rapidly, but experience higher poverty rates. 
B) achieve higher income levels per person but experience higher poverty rates. 
C) grow more rapidly and achieve larger poverty rate reductions. 
D) Experience less rapid rates of economic growth and higher overall poverty rates. 
A) grow more rapidly, but experience higher poverty rates. 
B) achieve higher income levels per person but experience higher poverty rates. 
C) grow more rapidly and achieve larger poverty rate reductions. 
D) Experience less rapid rates of economic growth and higher overall poverty rates.

Question 16

Which of the following about economic growth is true?

Accepted Answer

A) The rich countries are consistently getting richer, while the poor countries are getting poorer. 
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2009 period. 
C) The growth picture of LDCs is clearly one of diversity; some LDCs are growing rapidly, while others continue to stagnate. 
D) The fastest growing countries in the world are all high-income industrial economies. 
A) The rich countries are consistently getting richer, while the poor countries are getting poorer. 
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2009 period. 
C) The growth picture of LDCs is clearly one of diversity; some LDCs are growing rapidly, while others continue to stagnate. 
D) The fastest growing countries in the world are all high-income industrial economies.

Question 17

Which of the following would be most likely to improve the standard of living of a less-developed country?

Accepted Answer

A) development of strong labor unions. 
B) more foreign investment, attracted by the expectation of economic and political stability. 
C) adoption of trade barriers (higher tariffs and quotas). 
D) widespread use of price controls to allocate goods and resources. 
A) development of strong labor unions. 
B) more foreign investment, attracted by the expectation of economic and political stability. 
C) adoption of trade barriers (higher tariffs and quotas). 
D) widespread use of price controls to allocate goods and resources.

Question 18

Which of the following is true?

Accepted Answer

A) in recent decades, the rich countries of the world have consistently grown more rapidly than poor countries. 
B) no LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2005 period. 
C) during recent decades, most LDCs have stagnated economically. 
D) during 1980 through 2005, the fastest growing countries in the world were mostly LDCs. 
A) in recent decades, the rich countries of the world have consistently grown more rapidly than poor countries. 
B) no LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2005 period. 
C) during recent decades, most LDCs have stagnated economically. 
D) during 1980 through 2005, the fastest growing countries in the world were mostly LDCs.

Question 19

Which of the following provides the fuel for growth and achievement of high income levels?

Accepted Answer

A) gains from trade 
B) entrepreneurial discovery 
C) capital formation 
D) all of the above 
A) gains from trade 
B) entrepreneurial discovery 
C) capital formation 
D) all of the above

Question 20

Which of the following is a key characteristic of economic freedom?

Accepted Answer

A) subsidies and regulations that favor business 
B) central planning 
C) reliance on open markets 
D) import quotas that protect domestic businesses from rivals 
A) subsidies and regulations that favor business 
B) central planning 
C) reliance on open markets 
D) import quotas that protect domestic businesses from rivals

In order to achieve a high economic freedom rating, a country must

During 1980-2010, the per-capita incomes of less-developed countries (LDCs)

Which of the following will increase economic freedom?

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

In a majority-rules democracy, economic thinking suggests that we should expect to see institutions and policies that

When making income comparisons across countries, economists generally prefer to use

Which of the following will increase economic freedom?

The per capita incomes of countries in the quartile with the most economic freedom during 1980-2010 were

Which of the following adopted reforms that have substantially improved their economic freedom rating since 1980?

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Compared to countries with less economic freedom, countries with more economic freedom

High income countries with larger governments as a share of GDP have generally

Countries with more economic freedom tend to invest a share of their GDP and the productivity of that investment is than for countries that are less free. (Fill in the blanks.)

Countries that have adopted liberal reforms and substantially increased their economic freedom rating in recent years

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

Which of the following about economic growth is true?

Which of the following would be most likely to improve the standard of living of a less-developed country?

Which of the following is true?

Which of the following provides the fuel for growth and achievement of high income levels?

Which of the following is a key characteristic of economic freedom?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Exam 17: Institutions, Policies, and Cross-Country Differences in Income and Growth

In order to achieve a high economic freedom rating, a country must

During 1980-2010, the per-capita incomes of less-developed countries (LDCs)

Which of the following will increase economic freedom?

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

In a majority-rules democracy, economic thinking suggests that we should expect to see institutions and policies that

When making income comparisons across countries, economists generally prefer to use

Which of the following will increase economic freedom?

The per capita incomes of countries in the quartile with the most economic freedom during 1980-2010 were

Which of the following adopted reforms that have substantially improved their economic freedom rating since 1980?

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Compared to countries with less economic freedom, countries with more economic freedom

High income countries with larger governments as a share of GDP have generally

Countries with more economic freedom tend to invest a ____ share of their GDP and the productivity of that investment is ____ than for countries that are less free. (Fill in the blanks.)

Countries that have adopted liberal reforms and substantially increased their economic freedom rating in recent years

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

Which of the following about economic growth is true?

Which of the following would be most likely to improve the standard of living of a less-developed country?

Which of the following is true?

Which of the following provides the fuel for growth and achievement of high income levels?

Which of the following is a key characteristic of economic freedom?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Countries with more economic freedom tend to invest a share of their GDP and the productivity of that investment is than for countries that are less free. (Fill in the blanks.)