Question 1

According to Solow's neoclassical growth model, a country can achieve economic growth by increasing:

Accepted Answer

A)  human capital per worker. 
B)  money supply. 
C)  physical capital per worker. 
D)  research and development. 
A)  human capital per worker. 
B)  money supply. 
C)  physical capital per worker. 
D)  research and development.

Question 2

Which of the following measures is NOT included in the Human Development Index?

Accepted Answer

A)  life expectancy 
B)  years of schooling 
C)  income per capita 
D)  healthcare spending 
A)  life expectancy 
B)  years of schooling 
C)  income per capita 
D)  healthcare spending

Question 3

Which one of the following is a solution for the lack of domestic loans that are available to businesses in developing countries because of high interest rates?

Accepted Answer

A)  expansionary monetary policy 
B)  microcredit 
C)  foreign direct investment 
D)  private equity 
A)  expansionary monetary policy 
B)  microcredit 
C)  foreign direct investment 
D)  private equity

Question 4

An increase in which of the following factors entails beneficial side effects or positive externalities that can make physical capital more productive?

Accepted Answer

A)  money supply 
B)  human capital 
C)  land 
D)  labor 
A)  money supply 
B)  human capital 
C)  land 
D)  labor

Question 5

Which of the following is a measure of income inequality?

Accepted Answer

A)  real GDP 
B)  Gini coefficient 
C)  Human Development Index 
D)  Gross Happiness Index 
A)  real GDP 
B)  Gini coefficient 
C)  Human Development Index 
D)  Gross Happiness Index

Question 6

According to economist Robert Lucas, _____ are among the reasons that physical capital does not flow easily from developed to developing countries.

Accepted Answer

A)  a lack of human capital and differences in technology 
B)  a lack of human capital and political instability 
C)  a high tax on capital and a low marginal product of capital 
D)  political instability and a low marginal product of capital 
A)  a lack of human capital and differences in technology 
B)  a lack of human capital and political instability 
C)  a high tax on capital and a low marginal product of capital 
D)  political instability and a low marginal product of capital

Question 7

Investment made to acquire lasting interest in a firm operating in another country is known as foreign _____ investment.

Accepted Answer

A)  institutional 
B)  direct 
C)  venture capital 
D)  private equity 
A)  institutional 
B)  direct 
C)  venture capital 
D)  private equity

Question 8

If all the income of a country goes to one person, then the Gini coefficient of the country will be:

Accepted Answer

A)  0. 
B)  0.5. 
C)  1. 
D)  100. 
A)  0. 
B)  0.5. 
C)  1. 
D)  100.

Question 9

The Gini coefficient is a measure of inequality that takes values between:

Accepted Answer

A)  0 and 10. 
B)  0 and 1. 
C)  1 and 10. 
D)  1 and 100. 
A)  0 and 10. 
B)  0 and 1. 
C)  1 and 10. 
D)  1 and 100.

Question 10

If the real GDP of a country increases by 5 percent and the real GDP per capita increases by 3 percent over a period of time, then we can conclude that the population of the country during this time:

Accepted Answer

A)  decreased by 2 percent. 
B)  decreased by 3 percent. 
C)  increased by 2 percent. 
D)  increased by 3 percent. 
A)  decreased by 2 percent. 
B)  decreased by 3 percent. 
C)  increased by 2 percent. 
D)  increased by 3 percent.

Question 11

Which of the following statements is NOT true?

Accepted Answer

A)  In the Solow model, developing countries have the same technology as developed countries. 
B)  In the Solow model, developing countries have the same population as developed countries. 
C)  In the Solow model, developing countries have a higher marginal product of capital. 
D)  In the Solow model, all countries converge to the same level of capital per worker. 
A)  In the Solow model, developing countries have the same technology as developed countries. 
B)  In the Solow model, developing countries have the same population as developed countries. 
C)  In the Solow model, developing countries have a higher marginal product of capital. 
D)  In the Solow model, all countries converge to the same level of capital per worker.

Question 12

In the context of growth and development, laws, rules, and customs are known as:

Accepted Answer

A)  institutions. 
B)  constitutions. 
C)  organizations. 
D)  property rights. 
A)  institutions. 
B)  constitutions. 
C)  organizations. 
D)  property rights.

Question 13

If the real GDP of a country increases by 3 percent and the population of the country increases by 2 percent over a period of time, then the real GDP per capita of the country must have:

Accepted Answer

A)  increased by 2 percent. 
B)  increased by 1 percent. 
C)  decreased by 2 percent. 
D)  decreased by 1 percent. 
A)  increased by 2 percent. 
B)  increased by 1 percent. 
C)  decreased by 2 percent. 
D)  decreased by 1 percent.

Question 14

If the population of a country increase by 2 percent and the real GDP per capita increases by 1 percent, then we can conclude that the real GDP of the country must have:

Accepted Answer

A)  decreased by 1 percent. 
B)  decreased by 3 percent. 
C)  increased by 1 percent. 
D)  increased by 3 percent. 
A)  decreased by 1 percent. 
B)  decreased by 3 percent. 
C)  increased by 1 percent. 
D)  increased by 3 percent.

Question 15

Can a country achieve economic growth indefinitely just by accumulating more physical capital per worker? Justify your answer.

Accepted Answer

No, a country cannot grow forever by acc

Question 16

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF1 and it is operating at point B, then a shift to which of the following points represents economic growth?
​
Figure: Economic Growth

Accepted Answer

A)  D 
B)  C 
C)  A 
D)  F 
A)  D 
B)  C 
C)  A 
D)  F

Question 17

The difference between debt crowdfunding and equity crowdfunding is that investors in debt crowdfunding _____ and investors in equity crowdfunding:

Accepted Answer

A)  receive interest on their loans; make donations in return for rewards. 
B)  become part owners of a business; receive interest on their loans. 
C)  receive interest on their loans; become part owners of a business. 
D)  make donations in return for rewards; become part owners of a business. 
A)  receive interest on their loans; make donations in return for rewards. 
B)  become part owners of a business; receive interest on their loans. 
C)  receive interest on their loans; become part owners of a business. 
D)  make donations in return for rewards; become part owners of a business.

Question 18

An increase in _____ does not lead economic growth.

Accepted Answer

A)  human capital and money supply 
B)  money supply and capacity utilization 
C)  capacity utilization and physical capital 
D)  human capital and physical capital 
A)  human capital and money supply 
B)  money supply and capacity utilization 
C)  capacity utilization and physical capital 
D)  human capital and physical capital

Question 19

Refer to the figure Economic Growth. The figure shows two production possibility frontiers for a country that produces sugar and aluminum. If the country's PPF is currently PPF1 and it is operating at point B, then which one of the following CANNOT shift the country to point E?
​
Figure: Economic Growth

Accepted Answer

A)  improvement in technology 
B)  increase in labor force 
C)  increase in capacity utilization 
D)  increase in physical capital 
A)  improvement in technology 
B)  increase in labor force 
C)  increase in capacity utilization 
D)  increase in physical capital

Question 20

A production possibility frontier shows the:

Accepted Answer

A)  minimum amount of resources required to produce two different goods. 
B)  maximum amount of resources required to produce two different goods. 
C)  different combinations of two goods that can be produced using all available resources. 
D)  different combinations of two goods that can be produced using least amount of resources. 
A)  minimum amount of resources required to produce two different goods. 
B)  maximum amount of resources required to produce two different goods. 
C)  different combinations of two goods that can be produced using all available resources. 
D)  different combinations of two goods that can be produced using least amount of resources.

According to Solow's neoclassical growth model, a country can achieve economic growth by increasing:

Which of the following measures is NOT included in the Human Development Index?

Which one of the following is a solution for the lack of domestic loans that are available to businesses in developing countries because of high interest rates?

An increase in which of the following factors entails beneficial side effects or positive externalities that can make physical capital more productive?

Which of the following is a measure of income inequality?

According to economist Robert Lucas, _____ are among the reasons that physical capital does not flow easily from developed to developing countries.

Investment made to acquire lasting interest in a firm operating in another country is known as foreign _____ investment.

If all the income of a country goes to one person, then the Gini coefficient of the country will be:

The Gini coefficient is a measure of inequality that takes values between:

If the real GDP of a country increases by 5 percent and the real GDP per capita increases by 3 percent over a period of time, then we can conclude that the population of the country during this time:

Which of the following statements is NOT true?

In the context of growth and development, laws, rules, and customs are known as:

If the real GDP of a country increases by 3 percent and the population of the country increases by 2 percent over a period of time, then the real GDP per capita of the country must have:

If the population of a country increase by 2 percent and the real GDP per capita increases by 1 percent, then we can conclude that the real GDP of the country must have:

Can a country achieve economic growth indefinitely just by accumulating more physical capital per worker? Justify your answer.

The difference between debt crowdfunding and equity crowdfunding is that investors in debt crowdfunding _____ and investors in equity crowdfunding:

An increase in _____ does not lead economic growth.

A production possibility frontier shows the:

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

International Trade and Finance

Filters

Exam 18: Economic Growth and Development

According to Solow's neoclassical growth model, a country can achieve economic growth by increasing:

Which of the following measures is NOT included in the Human Development Index?

Which one of the following is a solution for the lack of domestic loans that are available to businesses in developing countries because of high interest rates?

An increase in which of the following factors entails beneficial side effects or positive externalities that can make physical capital more productive?

Which of the following is a measure of income inequality?

According to economist Robert Lucas, _____ are among the reasons that physical capital does not flow easily from developed to developing countries.

Investment made to acquire lasting interest in a firm operating in another country is known as foreign _____ investment.

If all the income of a country goes to one person, then the Gini coefficient of the country will be:

The Gini coefficient is a measure of inequality that takes values between:

If the real GDP of a country increases by 5 percent and the real GDP per capita increases by 3 percent over a period of time, then we can conclude that the population of the country during this time:

Which of the following statements is NOT true?

In the context of growth and development, laws, rules, and customs are known as:

If the real GDP of a country increases by 3 percent and the population of the country increases by 2 percent over a period of time, then the real GDP per capita of the country must have:

If the population of a country increase by 2 percent and the real GDP per capita increases by 1 percent, then we can conclude that the real GDP of the country must have:

Can a country achieve economic growth indefinitely just by accumulating more physical capital per worker? Justify your answer.

The difference between debt crowdfunding and equity crowdfunding is that investors in debt crowdfunding _____ and investors in equity crowdfunding:

An increase in _____ does not lead economic growth.

A production possibility frontier shows the:

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Market Equilibrium

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

International Trade and Finance

Filters