Question 1

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

Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate production functions, populations, and efficiency units of labor, but they have different technologies. The technology used in Country B is more advanced than that used in Country A.
-Refer to the scenario above.Which of the following statements will be true in steady state?

Accepted Answer

A)  Country A will have greater physical capital stock and lower GDP than Country B. 
B)  Country A will have greater physical capital stock and GDP than Country B. 
C)  Country A will have lower physical capital stock and higher GDP than Country B. 
D)  Country A will have lower physical capital stock and GDP than Country B. 
A)  Country A will have greater physical capital stock and lower GDP than Country B. 
B)  Country A will have greater physical capital stock and GDP than Country B. 
C)  Country A will have lower physical capital stock and higher GDP than Country B. 
D)  Country A will have lower physical capital stock and GDP than Country B.

Question 3

Real GDP refers to GDP adjusted for changes in ________.

Accepted Answer

A)  tax rates 
B)  prices 
C)  net imports 
D)  ruling political party 
A)  tax rates 
B)  prices 
C)  net imports 
D)  ruling political party

Question 4

Country A has experienced a greater average growth rate in GDP per capita than has Country B.Based only on this,what would you predict about how the poverty rates changed in the two countries?

Accepted Answer

A)  More than likely, the poverty rate in Country A has decreased faster than that of Country B. 
B)  Perhaps the poverty rate in Country A has decreased faster than that of Country B. 
C)  More than likely, the poverty rate in Country B has decreased faster than that of Country A. 
D)  Perhaps the poverty rate in Country B has decreased faster than that of Country A. 
A)  More than likely, the poverty rate in Country A has decreased faster than that of Country B. 
B)  Perhaps the poverty rate in Country A has decreased faster than that of Country B. 
C)  More than likely, the poverty rate in Country B has decreased faster than that of Country A. 
D)  Perhaps the poverty rate in Country B has decreased faster than that of Country A.

Question 5

A new coal-fired power plant will increase aggregate production.Which element of the aggregate production function Y = A × F(K,H)will this power plant increase?

Accepted Answer

A)  A 
B)  F 
C)  K 
D)  H 
A)  A 
B)  F 
C)  K 
D)  H

Question 6

Over the past couple of decades,which have been the most common directions of change in the poverty rate and GDP per capita across the world's nations?

Accepted Answer

A)  Most nations have increased their poverty rate and their GDP per capita. 
B)  Most nations have decreased their poverty rate and their GDP per capita. 
C)  Most nations have increased their poverty rate and decreased their GDP per capita. 
D)  Most nations have decreased their poverty rate and increased their GDP per capita. 
A)  Most nations have increased their poverty rate and their GDP per capita. 
B)  Most nations have decreased their poverty rate and their GDP per capita. 
C)  Most nations have increased their poverty rate and decreased their GDP per capita. 
D)  Most nations have decreased their poverty rate and increased their GDP per capita.

Question 7

Which of the following equations captures the aggregate physical capital stock of an economy in the current year,Kcurrent year?

Accepted Answer

A)  Kcurrent year = (1 + Depreciation rate) × Klast year + I 
B)  Kcurrent year = (1 − Depreciation rate) × Klast year + I 
C)  Kcurrent year = (1 − Depreciation rate) × Klast year × I 
D)  Kcurrent year = (1 − Depreciation rate) × Klast year − I 
A)  Kcurrent year = (1 + Depreciation rate) × Klast year + I 
B)  Kcurrent year = (1 − Depreciation rate) × Klast year + I 
C)  Kcurrent year = (1 − Depreciation rate) × Klast year × I 
D)  Kcurrent year = (1 − Depreciation rate) × Klast year − I

Question 8

Michael currently saves 5 percent of his income.Which of the following would likely lead Michael to save more of his income than he currently does?

Accepted Answer

A)  If the interest rate Michael could earn on his savings fell 
B)  If Michael learned he had just earned a promotion and a large increase in salary 
C)  If Michael anticipated that the tax rate on income in the future would fall 
D)  If Michael learned that his wife would have to stop working a year from now 
A)  If the interest rate Michael could earn on his savings fell 
B)  If Michael learned he had just earned a promotion and a large increase in salary 
C)  If Michael anticipated that the tax rate on income in the future would fall 
D)  If Michael learned that his wife would have to stop working a year from now

Question 9

Which of the following pairs of countries has used catch-up growth over the past few decades to achieve incomes that are now comparable to that of the United States?

Accepted Answer

A)  Singapore and South Korea 
B)  Mexico and Brazil 
C)  The United Kingdom and France 
D)  Kenya and Rwanda 
A)  Singapore and South Korea 
B)  Mexico and Brazil 
C)  The United Kingdom and France 
D)  Kenya and Rwanda

Question 10

A steady-state equilibrium refers to an equilibrium in which ________ remains constant over time.

Accepted Answer

A)  the GDP per capita 
B)  the stock of physical capital 
C)  inequality 
D)  the poverty rate 
A)  the GDP per capita 
B)  the stock of physical capital 
C)  inequality 
D)  the poverty rate

Question 11

Over the past couple of decades,Brazil has (1)decreased its poverty rate,and (2)experienced positive growth in GDP per capita.How does this compare to the majority of nations over this time period?

Accepted Answer

A)  Both (1) and (2) are typical of the majority of nations over this period. 
B)  Neither (1) nor (2) are typical of the majority of nations over this period. 
C)  Only (1) is typical of the majority of nations over this period. 
D)  Only (2) is typical of the majority of nations over this period. 
A)  Both (1) and (2) are typical of the majority of nations over this period. 
B)  Neither (1) nor (2) are typical of the majority of nations over this period. 
C)  Only (1) is typical of the majority of nations over this period. 
D)  Only (2) is typical of the majority of nations over this period.

Question 12

Exponential growth implies that ________.

Accepted Answer

A)  growth rates can only be positive 
B)  growth rates will alternate between positive and negative values in every consecutive time period 
C)  relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing 
D)  relatively small differences in growth rates will translate into large differences in the level of a quantity after many years of growing 
A)  growth rates can only be positive 
B)  growth rates will alternate between positive and negative values in every consecutive time period 
C)  relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing 
D)  relatively small differences in growth rates will translate into large differences in the level of a quantity after many years of growing

Question 13

Which of the following would constitute empirical evidence that higher interest rates encourage more saving?

Accepted Answer

A)  A mathematical model in which there was a positive relationship between the interest rate and the saving rate 
B)  A mathematical model in which there was a negative relationship between the interest rate and the saving rate 
C)  A cross-country study showing a positive relationship between the interest rate and the saving rate 
D)  A cross-country study showing a negative relationship between the interest rate and the saving rate 
A)  A mathematical model in which there was a positive relationship between the interest rate and the saving rate 
B)  A mathematical model in which there was a negative relationship between the interest rate and the saving rate 
C)  A cross-country study showing a positive relationship between the interest rate and the saving rate 
D)  A cross-country study showing a negative relationship between the interest rate and the saving rate

Question 14

The following table shows the GDP per capita of country X for 3 years.
  
-Refer to the table above.If country X is expected to grow by 19 percent between the years 2017 and 2018,what is the expected GDP per capita for the year 2008?

Accepted Answer

A)  $1,882 
B)  $2,439.50 
C)  $2,763.90 
D)  $3,015 
A)  $1,882 
B)  $2,439.50 
C)  $2,763.90 
D)  $3,015

Question 15

The implied growth rate for a country between 1960 and 2010 was 6 percent.This implies that ________.

Accepted Answer

A)  the country grew by at least 6 percent in any of the 50 years between 1960 to 2010 to reach the level of GDP in 2010 starting at the 1960 level 
B)  the growth rate of GDP in the country was above 6 percent between 1960 and 2010 
C)  the country grew at an average rate of 6 percent per year between 1960 and 2010 to reach the 2010 level of GDP starting at the 1960 level 
D)  the country grew at rates above 6 percent per year between 1960 and 2010 to reach the 2010 level of GDP starting at the 1960 level 
A)  the country grew by at least 6 percent in any of the 50 years between 1960 to 2010 to reach the level of GDP in 2010 starting at the 1960 level 
B)  the growth rate of GDP in the country was above 6 percent between 1960 and 2010 
C)  the country grew at an average rate of 6 percent per year between 1960 and 2010 to reach the 2010 level of GDP starting at the 1960 level 
D)  the country grew at rates above 6 percent per year between 1960 and 2010 to reach the 2010 level of GDP starting at the 1960 level

Question 16

Consider two economies: Barylia and Lithasia.The GDP per capita in Lithasia is $6,000,while the GDP per capita in Barylia is $12,000.Both countries grow exponentially at an annual rate of 10 percent.How will their GDPs vary over the next year? Is there any limitation to comparing the absolute levels of GDP per capita of both countries over the next years? If yes,what is a plausible solution?

Accepted Answer

The GDP per capita of Lithasia after 1 y

Question 17

Suppose the working-age population of a country doubles because of immigration.The country,however,neglects investment in research and development (R&D),and hence,its level of technology remains stagnant.Which of the following statements will be true of this economy?

Accepted Answer

A)  The economy cannot achieve sustained growth. 
B)  The economy will experience steady economic growth. 
C)  The economy's output will rise at an increasing rate over time. 
D)  The saving rate will remain stagnant over the years. 
A)  The economy cannot achieve sustained growth. 
B)  The economy will experience steady economic growth. 
C)  The economy's output will rise at an increasing rate over time. 
D)  The saving rate will remain stagnant over the years.

Question 18

Which of the following statements is true?

Accepted Answer

A)  Economic growth is the direct cause of declining poverty. 
B)  Economic growth is the direct cause of declining inequality. 
C)  Growth in unemployment is the direct cause of declining poverty. 
D)  There are some countries for which growth and poverty have both increased. 
A)  Economic growth is the direct cause of declining poverty. 
B)  Economic growth is the direct cause of declining inequality. 
C)  Growth in unemployment is the direct cause of declining poverty. 
D)  There are some countries for which growth and poverty have both increased.

Question 19

North Dakota's GDP per capita is $65,000,while South Dakota's GDP per capita is $48,000.Advances in technology increase North Dakota's GDP per capita over the following decade to $78,000.If South Dakota benefits in the same way from those technologies,what will South Dakota's GDP per capita be after a decade?

Accepted Answer

A)  $57,600 
B)  $61,000 
C)  $65,000 
D)  $78,000 
A)  $57,600 
B)  $61,000 
C)  $65,000 
D)  $78,000

Question 20

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 the short run,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.

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

Real GDP refers to GDP adjusted for changes in ________.

Country A has experienced a greater average growth rate in GDP per capita than has Country B.Based only on this,what would you predict about how the poverty rates changed in the two countries?

A new coal-fired power plant will increase aggregate production.Which element of the aggregate production function Y = A × F(K,H)will this power plant increase?

Over the past couple of decades,which have been the most common directions of change in the poverty rate and GDP per capita across the world's nations?

Which of the following equations captures the aggregate physical capital stock of an economy in the current year,Kcurrent year?

Michael currently saves 5 percent of his income.Which of the following would likely lead Michael to save more of his income than he currently does?

Which of the following pairs of countries has used catch-up growth over the past few decades to achieve incomes that are now comparable to that of the United States?

A steady-state equilibrium refers to an equilibrium in which ________ remains constant over time.

Over the past couple of decades,Brazil has (1)decreased its poverty rate,and (2)experienced positive growth in GDP per capita.How does this compare to the majority of nations over this time period?

Exponential growth implies that ________.

Which of the following would constitute empirical evidence that higher interest rates encourage more saving?

The following table shows the GDP per capita of country X for 3 years. -Refer to the table above.If country X is expected to grow by 19 percent between the years 2017 and 2018,what is the expected GDP per capita for the year 2008?

The implied growth rate for a country between 1960 and 2010 was 6 percent.This implies that ________.

Suppose the working-age population of a country doubles because of immigration.The country,however,neglects investment in research and development (R&D),and hence,its level of technology remains stagnant.Which of the following statements will be true of this economy?

Which of the following statements is true?

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

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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 lowest consumption rate?

Real GDP refers to GDP adjusted for changes in ________.

Country A has experienced a greater average growth rate in GDP per capita than has Country B.Based only on this,what would you predict about how the poverty rates changed in the two countries?

A new coal-fired power plant will increase aggregate production.Which element of the aggregate production function Y = A × F(K,H)will this power plant increase?

Over the past couple of decades,which have been the most common directions of change in the poverty rate and GDP per capita across the world's nations?

Which of the following equations captures the aggregate physical capital stock of an economy in the current year,Kcurrent year?

Michael currently saves 5 percent of his income.Which of the following would likely lead Michael to save more of his income than he currently does?

Which of the following pairs of countries has used catch-up growth over the past few decades to achieve incomes that are now comparable to that of the United States?

A steady-state equilibrium refers to an equilibrium in which ________ remains constant over time.

Over the past couple of decades,Brazil has (1)decreased its poverty rate,and (2)experienced positive growth in GDP per capita.How does this compare to the majority of nations over this time period?

Exponential growth implies that ________.

Which of the following would constitute empirical evidence that higher interest rates encourage more saving?

The following table shows the GDP per capita of country X for 3 years. -Refer to the table above.If country X is expected to grow by 19 percent between the years 2017 and 2018,what is the expected GDP per capita for the year 2008?

The implied growth rate for a country between 1960 and 2010 was 6 percent.This implies that ________.

Suppose the working-age population of a country doubles because of immigration.The country,however,neglects investment in research and development (R&D),and hence,its level of technology remains stagnant.Which of the following statements will be true of this economy?

Which of the following statements is true?

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