Question 1

The rule of 72 is a formulation that allows us to know, in a very quick and simple manner, the approximate time it takes to double a number that grows at a constant rate.

Accepted Answer

A) True 
 B)False

Question 2

Based on the rule of 72, it would require 18 years for an economy to double its real output if the annual growth rate was 4%.

Accepted Answer

A) True 
 B)False

Question 3

In 2000, the real GDP for Malaysia was 93.15 trillion ringgit (MYR) and the population size was 20.5 million, then per capita real GDP for the year was approximately equal to _____.

Accepted Answer

A)  MYR 45.44 million 
B)  MYR 45.9 million 
C)  MYR 1,909.5 million 
D)  MYR 191 million 
E)  MYR 9315 million 
A)  MYR 45.44 million 
B)  MYR 45.9 million 
C)  MYR 1,909.5 million 
D)  MYR 191 million 
E)  MYR 9315 million

Question 4

Which of the following factors will increase labor productivity in the United States?

Accepted Answer

A)  An aging labor force 
B)  A decline in the number of women entering the workforce 
C)  An increase in unskilled workers 
D)  An increase in the average level of education 
E)  A decrease in the number of educated immigrants 
A)  An aging labor force 
B)  A decline in the number of women entering the workforce 
C)  An increase in unskilled workers 
D)  An increase in the average level of education 
E)  A decrease in the number of educated immigrants

Question 5

A lack of current saving can be offset by borrowing, but the availability of borrowing is limited by the prospects for future saving.

Accepted Answer

A) True 
 B)False

Question 6

Per capita real GDP does not give us information about the distribution of income in a country or about the non-monetary quality of life.

Accepted Answer

A) True 
 B)False

Question 7

The ability of a country to invest in capital goods is tied to _____.

Accepted Answer

A)  the ability to save 
B)  the size of its labor force 
C)  its abundance of natural resources 
D)  the quality of its labor force 
E)  the level of inflation 
A)  the ability to save 
B)  the size of its labor force 
C)  its abundance of natural resources 
D)  the quality of its labor force 
E)  the level of inflation

Question 8

_____ is the ratio of the economy's output to its stock of labor and capital.

Accepted Answer

A)  Productive capacity 
B)  Multifactor productivity 
C)  Marginal product of labor 
D)  Workforce productivity 
E)  Total factor productivity 
A)  Productive capacity 
B)  Multifactor productivity 
C)  Marginal product of labor 
D)  Workforce productivity 
E)  Total factor productivity

Question 9

Which of the following stands true for the determinants of growth?

Accepted Answer

A)  The long-run aggregate supply curve is a horizontal line at the potential level of real GDP. 
B)  Land can be combined with labor and capital to produce goods and services. 
C)  The labor force typically grows more rapidly in industrial countries than in developing countries because birth rates are higher in industrial countries. 
D)  The ability of a country to invest in capital goods is tied to its ability to spend. 
E)  The size of the labor force is a function of the size of the youth in the population and the percentage of that population that is in the labor force. 
A)  The long-run aggregate supply curve is a horizontal line at the potential level of real GDP. 
B)  Land can be combined with labor and capital to produce goods and services. 
C)  The labor force typically grows more rapidly in industrial countries than in developing countries because birth rates are higher in industrial countries. 
D)  The ability of a country to invest in capital goods is tied to its ability to spend. 
E)  The size of the labor force is a function of the size of the youth in the population and the percentage of that population that is in the labor force.

Question 10

If real GDP for Mexico was 19.8 trillion pesos at the end of 1999 and 21.3 trillion pesos at the end of 2000, then Mexico's economy grew at an annual rate of _____.

Accepted Answer

A)  -0.015% 
B)  4.4 % 
C)  4.2% 
D)  7.57% 
E)  3.8% 
A)  -0.015% 
B)  4.4 % 
C)  4.2% 
D)  7.57% 
E)  3.8%

Question 11

Suppose the real GDP in an economy in the year 1999 was $2,000 and the total population was 500. The economy experienced a 5% growth in real GDP and a 2% growth in its population in 2000. Calculate the change in per capita income of the economy during this period.

Accepted Answer

A)  +1% 
B)  +2.5% 
C)  -3% 
D)  +3% 
E)  -4% 
A)  +1% 
B)  +2.5% 
C)  -3% 
D)  +3% 
E)  -4%

Question 12

As more women entered the labor force in the 1980s in the United States:

Accepted Answer

A)  the number of unskilled workers increased. 
B)  the average quality of the labor force improved. 
C)  the quantity of output decreased. 
D)  the supply of skilled labor exceeded its demand. 
E)  labor productivity increased. 
A)  the number of unskilled workers increased. 
B)  the average quality of the labor force improved. 
C)  the quantity of output decreased. 
D)  the supply of skilled labor exceeded its demand. 
E)  labor productivity increased.

Question 13

_____ is the sum of capital and labor productivity.

Accepted Answer

A)  Real productivity 
B)  Total factor productivity 
C)  Manufacturing and service productivity 
D)  Agricultural and industrial productivity 
E)  Industrial productivity 
A)  Real productivity 
B)  Total factor productivity 
C)  Manufacturing and service productivity 
D)  Agricultural and industrial productivity 
E)  Industrial productivity

Question 14

Which of the following statements about the economic concept of land is not true?

Accepted Answer

A)  Land includes forests, minerals, and other natural resources. 
B)  Countries that are rich in natural resources are not always successful in exploiting these resources to produce goods and services. 
C)  Natural resources alone do not generate growth. 
D)  Abundant natural resources are necessary for economic growth. 
E)  Countries that lack natural resources need not be characterized by limited economic growth. 
A)  Land includes forests, minerals, and other natural resources. 
B)  Countries that are rich in natural resources are not always successful in exploiting these resources to produce goods and services. 
C)  Natural resources alone do not generate growth. 
D)  Abundant natural resources are necessary for economic growth. 
E)  Countries that lack natural resources need not be characterized by limited economic growth.

Question 15

Labor productivity is affected by each of the following, except:

Accepted Answer

A)  technological innovation. 
B)  change in capital stock. 
C)  change in average age of the workers. 
D)  change in educational levels. 
E)  cultural ethnicity. 
A)  technological innovation. 
B)  change in capital stock. 
C)  change in average age of the workers. 
D)  change in educational levels. 
E)  cultural ethnicity.

Question 16

What is the annual rate of economic growth in Japan if real GDP at the beginning of the year is 11.9 trillion yen and real GDP at the end of the year is 11.1 trillion yen?

Accepted Answer

A)  0.65% 
B)  -6.7% 
C)  1.9% 
D)  0.008% 
E)  -6.25% 
A)  0.65% 
B)  -6.7% 
C)  1.9% 
D)  0.008% 
E)  -6.25%

Question 17

The development of a financial market is not important in determining the economic growth of a nation.

Accepted Answer

A) True 
 B)False

Question 18

Using the rule of 72, calculate the average annual growth rate of GDP needed for a country to double its size in just four years?

Accepted Answer

A)  12 percent 
B)  4 percent 
C)  18 percent 
D)  72 percent 
E)  28 percent 
A)  12 percent 
B)  4 percent 
C)  18 percent 
D)  72 percent 
E)  28 percent

Question 19

When you are calculating how long it will take your initial bank deposit to double, the rule of 72 prescribes that you divide the annual interest rate paid on the deposit by 72.

Accepted Answer

A) True 
 B)False

Question 20

If the quality of services rises, higher prices indicate a(n) _____.

Accepted Answer

A)  decline in productivity. 
B)  decline in real GDP. 
C)  increase in national output. 
D)  decline in manufacturing output. 
E)  increase in technological progress. 
A)  decline in productivity. 
B)  decline in real GDP. 
C)  increase in national output. 
D)  decline in manufacturing output. 
E)  increase in technological progress.

Exam 16: Economic Growth

The rule of 72 is a formulation that allows us to know, in a very quick and simple manner, the approximate time it takes to double a number that grows at a constant rate.

Based on the rule of 72, it would require 18 years for an economy to double its real output if the annual growth rate was 4%.

In 2000, the real GDP for Malaysia was 93.15 trillion ringgit (MYR) and the population size was 20.5 million, then per capita real GDP for the year was approximately equal to _____.

Which of the following factors will increase labor productivity in the United States?

A lack of current saving can be offset by borrowing, but the availability of borrowing is limited by the prospects for future saving.

Per capita real GDP does not give us information about the distribution of income in a country or about the non-monetary quality of life.

The ability of a country to invest in capital goods is tied to _____.

_____ is the ratio of the economy's output to its stock of labor and capital.

Which of the following stands true for the determinants of growth?

If real GDP for Mexico was 19.8 trillion pesos at the end of 1999 and 21.3 trillion pesos at the end of 2000, then Mexico's economy grew at an annual rate of _____.

Suppose the real GDP in an economy in the year 1999 was $2,000 and the total population was 500. The economy experienced a 5% growth in real GDP and a 2% growth in its population in 2000. Calculate the change in per capita income of the economy during this period.

As more women entered the labor force in the 1980s in the United States:

_____ is the sum of capital and labor productivity.

Which of the following statements about the economic concept of land is not true?

Labor productivity is affected by each of the following, except:

What is the annual rate of economic growth in Japan if real GDP at the beginning of the year is 11.9 trillion yen and real GDP at the end of the year is 11.1 trillion yen?

The development of a financial market is not important in determining the economic growth of a nation.

Using the rule of 72, calculate the average annual growth rate of GDP needed for a country to double its size in just four years?

When you are calculating how long it will take your initial bank deposit to double, the rule of 72 prescribes that you divide the annual interest rate paid on the deposit by 72.

If the quality of services rises, higher prices indicate a(n) _____.

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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