Question 1

Real GDP per capita and other alternative measures of the quality of life are:

Accepted Answer

A)  independent. 
B)  directly correlated. 
C)  poorly correlated. 
D)  inversely related. 
A)  independent. 
B)  directly correlated. 
C)  poorly correlated. 
D)  inversely related.

Question 2

If national real GDP grows at twice the rate of population growth,

Accepted Answer

A)  real per capita GDP growth will double each year. 
B)  eventually there will be too much GDP. 
C)  real per capita GDP will double each year. 
D)  real per capita GDP will be reduced by half each year. 
A)  real per capita GDP growth will double each year. 
B)  eventually there will be too much GDP. 
C)  real per capita GDP will double each year. 
D)  real per capita GDP will be reduced by half each year.

Question 3

Investments in both physical and human capital enhance economic growth because they:

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 4

When per capita real GDP is increasing, real output is growing:

Accepted Answer

A)  more rapidly than prices. 
B)  more rapidly than population. 
C)  less rapidly than prices. 
D)  less rapidly than population. 
A)  more rapidly than prices. 
B)  more rapidly than population. 
C)  less rapidly than prices. 
D)  less rapidly than population.

Question 5

The economies of most less-developed countries (LDCs) are based on:

Accepted Answer

A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil. 
A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil.

Question 6

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

Accepted Answer

A)  high rates of illiteracy 
B)  high unemployment 
C)  low infant mortality rates 
D)  low savings and investment rates 
A)  high rates of illiteracy 
B)  high unemployment 
C)  low infant mortality rates 
D)  low savings and investment rates

Question 7

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Accepted Answer

A)  development of strong labor unions 
B)  more rapid population growth 
C)  investment expenditures that enhance the human capital of labor force participants 
D)  an international minimum wage law 
A)  development of strong labor unions 
B)  more rapid population growth 
C)  investment expenditures that enhance the human capital of labor force participants 
D)  an international minimum wage law

Question 8

Describe the vicious cycle of poverty . What are the consequences of this cycle?

Accepted Answer

The vicious cycle of poverty explains th

Question 9

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Accepted Answer

A)  United Arab Emirates 
B)  Israel 
C)  Greece 
D)  Luxembourg 
A)  United Arab Emirates 
B)  Israel 
C)  Greece 
D)  Luxembourg

Question 10

Which of the following is true ?

Accepted Answer

A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital. 
A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital.

Question 11

Which of the following is a problem when comparing GDPs per capita between nations?

Accepted Answer

A)  GDP per capita only measures income distribution. 
B)  Fluctuations in exchange rates affect differences in GDP per capita. 
C)  GDP per capita is subject to greater measurement errors for IACs compared to LDCs. 
D)  GDP per capita is likely overstated in LDCs due to families producing goods and services outside of the pricing system. 
A)  GDP per capita only measures income distribution. 
B)  Fluctuations in exchange rates affect differences in GDP per capita. 
C)  GDP per capita is subject to greater measurement errors for IACs compared to LDCs. 
D)  GDP per capita is likely overstated in LDCs due to families producing goods and services outside of the pricing system.

Question 12

Which of the following statements explains the vicious circle of poverty?

Accepted Answer

A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but countries cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods. 
A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but countries cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods.

Question 13

Exhibit 17-1 Nation of Padia
 
Exhibit 17-1 shows the production possibility curve of the nation of Padia. Based only on this information, the point which would produce the highest rate of growth would be:

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  IV 
A)  I 
B)  II 
C)  III 
D)  IV

Question 14

An outward shift of an economy's production possibilities curve is not caused by:

Accepted Answer

A)  an increase in capital. 
B)  an increase in labor. 
C)  an advance in technology. 
D)  a decrease in unemployment. 
A)  an increase in capital. 
B)  an increase in labor. 
C)  an advance in technology. 
D)  a decrease in unemployment.

Question 15

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

Accepted Answer

A)  the development of strong labor unions 
B)  a sharp increase in the legal minimum wage 
C)  an increase in expenditures on education and capital investment 
D)  rapid growth rate of the money supply 
A)  the development of strong labor unions 
B)  a sharp increase in the legal minimum wage 
C)  an increase in expenditures on education and capital investment 
D)  rapid growth rate of the money supply

Exam 30: Growth and the Less Developed Countries

Real GDP per capita and other alternative measures of the quality of life are:

If national real GDP grows at twice the rate of population growth,

Investments in both physical and human capital enhance economic growth because they:

When per capita real GDP is increasing, real output is growing:

The economies of most less-developed countries (LDCs) are based on:

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

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Describe the vicious cycle of poverty . What are the consequences of this cycle?

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Which of the following is true ?

Which of the following is a problem when comparing GDPs per capita between nations?

Which of the following statements explains the vicious circle of poverty?

Exhibit 17-1 Nation of Padia Exhibit 17-1 shows the production possibility curve of the nation of Padia. Based only on this information, the point which would produce the highest rate of growth would be:

An outward shift of an economy's production possibilities curve is not caused by:

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

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

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits Surpluses and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Understanding Direct and Inverse Relationships between Variables

Filters