Question 1

Investment in both physical and human capital enhances economic growth because it:

Accepted Answer

A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages. 
A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages.

Question 2

If a country's population growth rate exceeds the growth rate in its GDP, which of the following is true?

Accepted Answer

A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above. 
A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above.

Question 3

A nation's infrastructure includes all of the following except its:

Accepted Answer

A)  market system. 
B)  educational system. 
C)  energy system. 
D)  railroad system. 
E)  religious system. 
A)  market system. 
B)  educational system. 
C)  energy system. 
D)  railroad system. 
E)  religious system.

Question 4

Which of the following best defines the vicious circle of poverty?

Accepted Answer

A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit. 
A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit.

Question 5

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

Accepted Answer

A)  The development of strong labor unions. 
B)  An increase in foreign investment. 
C)  An increase in the share of the population under 15 years of age. 
D)  Higher tariffs and the imposition of other restraints designed to restrict international trade. 
A)  The development of strong labor unions. 
B)  An increase in foreign investment. 
C)  An increase in the share of the population under 15 years of age. 
D)  Higher tariffs and the imposition of other restraints designed to restrict international trade.

Question 6

If real GDP is increasing more rapidly than population:

Accepted Answer

A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing. 
A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing.

Question 7

Which of the following is most important if the living standards of people residing in a country are going to improve?

Accepted Answer

A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP 
A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP

Question 8

Which of the following statements is true?

Accepted Answer

A)  There is no single correct strategy for economic growth and development. 
B)  In general, GDP per capita is highly correlated with alternative quality of life measures. 
C)  The World Bank is affiliated with the United Nations and makes long-term low-interest loans to LDCs. 
D)  All of these. 
A)  There is no single correct strategy for economic growth and development. 
B)  In general, GDP per capita is highly correlated with alternative quality of life measures. 
C)  The World Bank is affiliated with the United Nations and makes long-term low-interest loans to LDCs. 
D)  All of these.

Question 9

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Accepted Answer

A) True 
 B)False

Question 10

Waste systems and highways are part of a nation's infrastructure.

Accepted Answer

A) True 
 B)False

Question 11

The vicious circle of poverty is the trap that parents with low education tend to have children with low education.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a characteristic of most less-developed countries?

Accepted Answer

A)  Inadequate human capital. 
B)  Inadequate capital goods. 
C)  High population growth rate. 
D)  Inadequate water supplies. 
E)  High productivity. 
A)  Inadequate human capital. 
B)  Inadequate capital goods. 
C)  High population growth rate. 
D)  Inadequate water supplies. 
E)  High productivity.

Question 13

Of the following choices, which is the best example of a nation's economic infrastructure?

Accepted Answer

A)  Natural resources. 
B)  Highway system. 
C)  Government. 
D)  Religious and cultural beliefs. 
E)  Population growth rate. 
A)  Natural resources. 
B)  Highway system. 
C)  Government. 
D)  Religious and cultural beliefs. 
E)  Population growth rate.

Question 14

There is a significant positive relationship between ________ and __________.

Accepted Answer

A)  natural resource commodity exports, high levels of per capita GDP 
B)  investment in capital, high levels of per capita GDP 
C)  high levels of illiteracy, high levels of per capita GDP 
D)  limited government recognition of land tenure and property ownership, high levels of per capita GDP 
A)  natural resource commodity exports, high levels of per capita GDP 
B)  investment in capital, high levels of per capita GDP 
C)  high levels of illiteracy, high levels of per capita GDP 
D)  limited government recognition of land tenure and property ownership, high levels of per capita GDP

Question 15

How much of the U.S. federal budget is spent on foreign aid?

Accepted Answer

A)  About 1 percent. 
B)  About 5 percent. 
C)  About 25 percent. 
D)  About 50 percent. 
A)  About 1 percent. 
B)  About 5 percent. 
C)  About 25 percent. 
D)  About 50 percent.

Question 16

Which of the following characterizes the IACs?

Accepted Answer

A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment. 
A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment.

Question 17

A country cannot develop without a large natural resource base.

Accepted Answer

A) True 
 B)False

Question 18

Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?

Accepted Answer

A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty. 
A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty.

Question 19

Which of the following distinguishes industrially advanced countries from less-developed countries?

Accepted Answer

A)  GDP per capita. 
B)  Educational attainment of the workforce. 
C)  Extent to which capital is technologically advanced. 
D)  All of the above. 
A)  GDP per capita. 
B)  Educational attainment of the workforce. 
C)  Extent to which capital is technologically advanced. 
D)  All of the above.

Question 20

Which of the following is not evidence of the lower standard of living among less-developed countries?

Accepted Answer

A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate. 
A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate.

Investment in both physical and human capital enhances economic growth because it:

If a country's population growth rate exceeds the growth rate in its GDP, which of the following is true?

A nation's infrastructure includes all of the following except its:

Which of the following best defines the vicious circle of poverty?

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

If real GDP is increasing more rapidly than population:

Which of the following is most important if the living standards of people residing in a country are going to improve?

Which of the following statements is true?

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Waste systems and highways are part of a nation's infrastructure.

The vicious circle of poverty is the trap that parents with low education tend to have children with low education.

Which of the following is not a characteristic of most less-developed countries?

Of the following choices, which is the best example of a nation's economic infrastructure?

There is a significant positive relationship between and __.

How much of the U.S. federal budget is spent on foreign aid?

Which of the following characterizes the IACs?

A country cannot develop without a large natural resource base.

Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?

Which of the following distinguishes industrially advanced countries from less-developed countries?

Which of the following is not evidence of the lower standard of living among less-developed countries?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Filters

Exam 17: Growth and the

Investment in both physical and human capital enhances economic growth because it:

If a country's population growth rate exceeds the growth rate in its GDP, which of the following is true?

A nation's infrastructure includes all of the following except its:

Which of the following best defines the vicious circle of poverty?

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

If real GDP is increasing more rapidly than population:

Which of the following is most important if the living standards of people residing in a country are going to improve?

Which of the following statements is true?

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Waste systems and highways are part of a nation's infrastructure.

The vicious circle of poverty is the trap that parents with low education tend to have children with low education.

Which of the following is not a characteristic of most less-developed countries?

Of the following choices, which is the best example of a nation's economic infrastructure?

There is a significant positive relationship between ________ and __________.

How much of the U.S. federal budget is spent on foreign aid?

Which of the following characterizes the IACs?

A country cannot develop without a large natural resource base.

Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?

Which of the following distinguishes industrially advanced countries from less-developed countries?

Which of the following is not evidence of the lower standard of living among less-developed countries?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Filters

There is a significant positive relationship between and __.