Question 1

The following table shows levels of consumption and investment in four countries.
  
-Refer to the table above.Which country has the highest consumption rate?

Accepted Answer

A)  Country A 
B)  Country B 
C)  Country C 
D)  Country D 
A)  Country A 
B)  Country B 
C)  Country C 
D)  Country D

Question 2

Cross-country interactions produced by international trade can facilitate the transfer of ________.

Accepted Answer

A)  exponential growth 
B)  income inequality 
C)  poverty 
D)  technology 
A)  exponential growth 
B)  income inequality 
C)  poverty 
D)  technology

Question 3

In a closed economy without a government,________.

Accepted Answer

A)  consumption equals savings 
B)  consumption equals investment 
C)  saving equals investment 
D)  saving equals net exports 
A)  consumption equals savings 
B)  consumption equals investment 
C)  saving equals investment 
D)  saving equals net exports

Question 4

Which of the following statements is true?

Accepted Answer

A)  Physical capital accumulation will be high in the current year if the physical capital stock of the previous year was high. 
B)  Physical capital accumulation will be high if the physical capital stock of the previous year was low. 
C)  The rate of depreciation will be low in the current year if the investment on physical capital the previous year was high. 
D)  The rate of depreciation will be high in the current year if the investment on physical capital the previous year was low. 
A)  Physical capital accumulation will be high in the current year if the physical capital stock of the previous year was high. 
B)  Physical capital accumulation will be high if the physical capital stock of the previous year was low. 
C)  The rate of depreciation will be low in the current year if the investment on physical capital the previous year was high. 
D)  The rate of depreciation will be high in the current year if the investment on physical capital the previous year was low.

Question 5

Scenario: Two countries (A and B) have the same aggregate production function, the same level of technology, the same depreciation rate, and the same level of human capital. However, the saving rate is higher in country A than in country B.
-Refer to the scenario above.In steady-state equilibrium,which country must have the higher GDP?

Accepted Answer

A)  Country A's GDP must be higher than Country B's GDP. 
B)  Country B's GDP must be higher than Country A's GDP. 
C)  The two countries' GDPs must be equal. 
D)  There is no way to determine which country's GDP must be higher from the information given. 
A)  Country A's GDP must be higher than Country B's GDP. 
B)  Country B's GDP must be higher than Country A's GDP. 
C)  The two countries' GDPs must be equal. 
D)  There is no way to determine which country's GDP must be higher from the information given.

Question 6

Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500.
-Refer to the scenario above.If the world sustains this growth rate,approximately what will world GDP per capita be in 2020?

Accepted Answer

A)  $13,500 
B)  $15,000 
C)  $16,400 
D)  $19,000 
A)  $13,500 
B)  $15,000 
C)  $16,400 
D)  $19,000

Question 7

In which of the following countries would an economist describe income inequality as being greatest?

Accepted Answer

A)  Half of the country's citizens earn $50,000 per year, and half earn $10,000 per year. 
B)  Half of the country's citizens earn $30,000 per year, and half earn $3,000 per year. 
C)  Half of the country's citizens earn $10,000 per year, and half earn $3,000 per year. 
D)  Half of the country's citizens earn $100,000 per year, and half earn $50,000 per year. 
A)  Half of the country's citizens earn $50,000 per year, and half earn $10,000 per year. 
B)  Half of the country's citizens earn $30,000 per year, and half earn $3,000 per year. 
C)  Half of the country's citizens earn $10,000 per year, and half earn $3,000 per year. 
D)  Half of the country's citizens earn $100,000 per year, and half earn $50,000 per year.

Question 8

Singapore had a GDP per capita of $395 in 1960.It then started taking advantage of knowledge and technologies already invented in other technologically advanced countries.In 2013,its GDP per capita had increased to $52,918.The growth in Singapore's average per capita GDP is considered to be ________ growth.

Accepted Answer

A)  catch-up 
B)  sustained 
C)  instant 
D)  disguised 
A)  catch-up 
B)  sustained 
C)  instant 
D)  disguised

Question 9

How much of the growth in U.S.GDP per hour worked over the past 60 years can be attributed to technological progress?

Accepted Answer

A)  Almost all of it 
B)  At least half, but not all 
C)  Less than half, but not none 
D)  Essentially none of it 
A)  Almost all of it 
B)  At least half, but not all 
C)  Less than half, but not none 
D)  Essentially none of it

Question 10

Initially Country A has a greater GDP per capita than Country B,but the growth rate in Country A is only 1 percent,while it is 2 percent in Country B.If these growth rates continue forever,which of the following is correct?

Accepted Answer

A)  Country A will always have a higher GDP per capita than Country B. 
B)  Country B will not be able to sustain such a high growth rate. 
C)  The GDP per capita in Country B will eventually catch up to, but not overtake, that of Country A. 
D)  The GDP per capita in Country B will eventually overtake that of Country A. 
A)  Country A will always have a higher GDP per capita than Country B. 
B)  Country B will not be able to sustain such a high growth rate. 
C)  The GDP per capita in Country B will eventually catch up to, but not overtake, that of Country A. 
D)  The GDP per capita in Country B will eventually overtake that of Country A.

Question 11

Which of the following statements identifies a correct reason for demographic transition?

Accepted Answer

A)  The dependence on child labor is negligible in urban families compared to rural families. 
B)  The increase in the migration of labor from urban to rural areas reduces fertility. 
C)  The cost of rearing children is lower for urban families compared to rural families. 
D)  The transition from a rural economy to an urban economy reduces income below the subsistence level, reducing fertility and the size of families. 
A)  The dependence on child labor is negligible in urban families compared to rural families. 
B)  The increase in the migration of labor from urban to rural areas reduces fertility. 
C)  The cost of rearing children is lower for urban families compared to rural families. 
D)  The transition from a rural economy to an urban economy reduces income below the subsistence level, reducing fertility and the size of families.

Question 12

Suppose the growth in GDP per hour worked resulting from physical capital in an economy is 1 percent and the growth resulting from human capital is 2 percent.If the annual growth rate of GDP per hour worked is 5 percent,the growth resulting from technology equals ________.

Accepted Answer

A)  1 percent 
B)  2 percent 
C)  3 percent 
D)  4 percent 
A)  1 percent 
B)  2 percent 
C)  3 percent 
D)  4 percent

Question 13

According to the Solow model,given the levels of total efficiency units of labor and technology,________.

Accepted Answer

A)  increases in the saving rate is the sole reason for sustained economic growth 
B)  increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth 
C)  there is a maximum fixed level of GDP that an economy can achieve by increasing saving 
D)  the physical capital stock does not play any role in the determination of the steady-state equilibrium level of GDP 
A)  increases in the saving rate is the sole reason for sustained economic growth 
B)  increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth 
C)  there is a maximum fixed level of GDP that an economy can achieve by increasing saving 
D)  the physical capital stock does not play any role in the determination of the steady-state equilibrium level of GDP

Question 14

The following figure shows the production function and the relationship between investment and physical capital stock for a given saving rate.
  
-Refer to the figure above.If the physical capital stock is fixed at $300,the total consumption in this economy will equal ________.

Accepted Answer

A)  $2,000 
B)  $3,000 
C)  $4,000 
D)  $5,000 
A)  $2,000 
B)  $3,000 
C)  $4,000 
D)  $5,000

Question 15

Which of the following is most likely if there is a war that destroys a country's stock of physical capital to a level below the steady-state equilibrium?

Accepted Answer

A)  The GDP of this country will be equal to the steady-state equilibrium level of GDP. 
B)  The GDP of this country will be higher than the steady-state equilibrium level of GDP. 
C)  The investment in physical capital will offset the depreciating physical capital. 
D)  The investment in physical capital will be lower than the amount required to replenish the depreciating physical capital. 
A)  The GDP of this country will be equal to the steady-state equilibrium level of GDP. 
B)  The GDP of this country will be higher than the steady-state equilibrium level of GDP. 
C)  The investment in physical capital will offset the depreciating physical capital. 
D)  The investment in physical capital will be lower than the amount required to replenish the depreciating physical capital.

Question 16

In Australia,the saving rate is 15 percent,while GDP is $1.34 trillion.Total saving in Australia is closest to ________.

Accepted Answer

A)  $200 billion 
B)  $220 billion 
C)  $240 billion 
D)  $260 billion 
A)  $200 billion 
B)  $220 billion 
C)  $240 billion 
D)  $260 billion

Question 17

Assuming all else equal,if the production technology available to a nation improves,its ________.

Accepted Answer

A)  GDP decreases 
B)  stock of physical capital decreases 
C)  GDP increases 
D)  population increases 
A)  GDP decreases 
B)  stock of physical capital decreases 
C)  GDP increases 
D)  population increases

Question 18

In a closed economy without a government,income equals aggregate ________.

Accepted Answer

A)  consumption 
B)  saving 
C)  saving plus aggregate investment 
D)  saving plus aggregate consumption 
A)  consumption 
B)  saving 
C)  saving plus aggregate investment 
D)  saving plus aggregate consumption

Question 19

The price of making a telephone call has fallen dramatically over the past 100 years.This is best explained by improvements in what?

Accepted Answer

A)  Human capital 
B)  Education 
C)  Physical capital 
D)  Technology 
A)  Human capital 
B)  Education 
C)  Physical capital 
D)  Technology

Question 20

Scenario: Kenya's economy is in steady-state equilibrium. It has capital stock valued at $48 billion and GDP valued at $60 billion.
-Refer to the scenario above.If the saving rate in Kenya is 10 percent,what is the value of aggregate investment in Kenya?

Accepted Answer

A)  $1.2 billion 
B)  $4.8 billion 
C)  $6 billion 
D)  $10.8 billion 
A)  $1.2 billion 
B)  $4.8 billion 
C)  $6 billion 
D)  $10.8 billion

The following table shows levels of consumption and investment in four countries. -Refer to the table above.Which country has the highest consumption rate?

Cross-country interactions produced by international trade can facilitate the transfer of ________.

In a closed economy without a government,________.

Which of the following statements is true?

Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500. -Refer to the scenario above.If the world sustains this growth rate,approximately what will world GDP per capita be in 2020?

In which of the following countries would an economist describe income inequality as being greatest?

How much of the growth in U.S.GDP per hour worked over the past 60 years can be attributed to technological progress?

Initially Country A has a greater GDP per capita than Country B,but the growth rate in Country A is only 1 percent,while it is 2 percent in Country B.If these growth rates continue forever,which of the following is correct?

Which of the following statements identifies a correct reason for demographic transition?

Suppose the growth in GDP per hour worked resulting from physical capital in an economy is 1 percent and the growth resulting from human capital is 2 percent.If the annual growth rate of GDP per hour worked is 5 percent,the growth resulting from technology equals ________.

According to the Solow model,given the levels of total efficiency units of labor and technology,________.

The following figure shows the production function and the relationship between investment and physical capital stock for a given saving rate. -Refer to the figure above.If the physical capital stock is fixed at $300,the total consumption in this economy will equal ________.

Which of the following is most likely if there is a war that destroys a country's stock of physical capital to a level below the steady-state equilibrium?

In Australia,the saving rate is 15 percent,while GDP is $1.34 trillion.Total saving in Australia is closest to ________.

Assuming all else equal,if the production technology available to a nation improves,its ________.

In a closed economy without a government,income equals aggregate ________.

The price of making a telephone call has fallen dramatically over the past 100 years.This is best explained by improvements in what?

Scenario: Kenya's economy is in steady-state equilibrium. It has capital stock valued at $48 billion and GDP valued at $60 billion. -Refer to the scenario above.If the saving rate in Kenya is 10 percent,what is the value of aggregate investment in Kenya?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

Exam 7: Economic Growth

The following table shows levels of consumption and investment in four countries. -Refer to the table above.Which country has the highest consumption rate?

Cross-country interactions produced by international trade can facilitate the transfer of ________.

In a closed economy without a government,________.

Which of the following statements is true?

Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500. -Refer to the scenario above.If the world sustains this growth rate,approximately what will world GDP per capita be in 2020?

In which of the following countries would an economist describe income inequality as being greatest?

How much of the growth in U.S.GDP per hour worked over the past 60 years can be attributed to technological progress?

Initially Country A has a greater GDP per capita than Country B,but the growth rate in Country A is only 1 percent,while it is 2 percent in Country B.If these growth rates continue forever,which of the following is correct?

Which of the following statements identifies a correct reason for demographic transition?

Suppose the growth in GDP per hour worked resulting from physical capital in an economy is 1 percent and the growth resulting from human capital is 2 percent.If the annual growth rate of GDP per hour worked is 5 percent,the growth resulting from technology equals ________.

According to the Solow model,given the levels of total efficiency units of labor and technology,________.

The following figure shows the production function and the relationship between investment and physical capital stock for a given saving rate. -Refer to the figure above.If the physical capital stock is fixed at $300,the total consumption in this economy will equal ________.

Which of the following is most likely if there is a war that destroys a country's stock of physical capital to a level below the steady-state equilibrium?

In Australia,the saving rate is 15 percent,while GDP is $1.34 trillion.Total saving in Australia is closest to ________.

Assuming all else equal,if the production technology available to a nation improves,its ________.

In a closed economy without a government,income equals aggregate ________.

The price of making a telephone call has fallen dramatically over the past 100 years.This is best explained by improvements in what?

Scenario: Kenya's economy is in steady-state equilibrium. It has capital stock valued at $48 billion and GDP valued at $60 billion. -Refer to the scenario above.If the saving rate in Kenya is 10 percent,what is the value of aggregate investment in Kenya?

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Why Isn't the Whole World Developed?

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters