Question 1

When making income comparisons across countries,economists generally prefer to use

Accepted Answer

A) the exchange rate conversion method. 
B) the consumer price index ratio method. 
C) the purchasing power parity method. 
D) the interest rate differential conversion method. 
A) the exchange rate conversion method. 
B) the consumer price index ratio method. 
C) the purchasing power parity method. 
D) the interest rate differential conversion method.

Question 2

According to the Economic Freedom of the World (EFW)rating,which of the following countries has the highest level of economic freedom?

Accepted Answer

A) Mexico 
B) Switzerland 
C) Syria 
D) Democratic Republic of Congo 
A) Mexico 
B) Switzerland 
C) Syria 
D) Democratic Republic of Congo

Question 3

According to the Economic Freedom of the World (EFW)rating,which of the following countries has the lowest level of economic freedom?

Accepted Answer

A) Switzerland 
B) Singapore 
C) Germany 
D) Zimbabwe 
A) Switzerland 
B) Singapore 
C) Germany 
D) Zimbabwe

Question 4

Which of the following countries grew most rapidly during the 1980 through 2009 period?

Accepted Answer

A) Hong Kong,Singapore,and Ireland 
B) United Kingdom,Italy,and Canada 
C) United States,Germany,and France 
D) Brazil,Argentina,and Venezuela 
A) Hong Kong,Singapore,and Ireland 
B) United Kingdom,Italy,and Canada 
C) United States,Germany,and France 
D) Brazil,Argentina,and Venezuela

Question 5

Which of the following adopted reforms that have substantially improved their economic freedom rating since 1980?

Accepted Answer

A) Ireland 
B) China 
C) New Zealand 
D) All of the above. 
A) Ireland 
B) China 
C) New Zealand 
D) All of the above.

Question 6

If a country is going to achieve a high economic freedom rating,it must

Accepted Answer

A) follow rule of law principles and create a stable monetary environment. 
B) be a political democracy. 
C) refrain from the imposition of barriers that limit voluntary exchange. 
D) rely primarily on government expenditures and regulations (rather than markets)to allocate goods and resources. 
E) both a and c are true. 
A) follow rule of law principles and create a stable monetary environment. 
B) be a political democracy. 
C) refrain from the imposition of barriers that limit voluntary exchange. 
D) rely primarily on government expenditures and regulations (rather than markets)to allocate goods and resources. 
E) both a and c are true.

Question 7

A less-developed nation will be able to benefit substantially by adopting the technologies and the business practices that have been successful in other nations,but only if

Accepted Answer

A) its wages are low enough. 
B) its population is large enough. 
C) it first educates its citizens well,so they can use the new ideas. 
D) it improves its institutions so that investors are willing to import the capital and any expertise needed to take advantage of the advanced production techniques that are available. 
A) its wages are low enough. 
B) its population is large enough. 
C) it first educates its citizens well,so they can use the new ideas. 
D) it improves its institutions so that investors are willing to import the capital and any expertise needed to take advantage of the advanced production techniques that are available.

Question 8

Which of the following helps low income countries grow rapidly relative to high income countries?

Accepted Answer

A) Low income countries are in a better position to save a larger share of their income. 
B) Low income countries can copy (or borrow at a low cost)technologies and practices that have been successful in high income countries. 
C) Low income countries generally have legal systems that protect property rights and enforce contracts in a more evenhanded manner. 
D) Low income countries generally have more favorable weather 
A) Low income countries are in a better position to save a larger share of their income. 
B) Low income countries can copy (or borrow at a low cost)technologies and practices that have been successful in high income countries. 
C) Low income countries generally have legal systems that protect property rights and enforce contracts in a more evenhanded manner. 
D) Low income countries generally have more favorable weather

Question 9

Which of the following countries has the lowest per capita income?

Accepted Answer

A) South Korea 
B) Germany 
C) Malawi 
D) Ireland 
A) South Korea 
B) Germany 
C) Malawi 
D) Ireland

Question 10

Which of the following is true?

Accepted Answer

A) Economic freedom is present if a country is a political democracy. 
B) Economic freedom ratings indicate the consistency of a nation's institutions and policies with personal choice,freedom of exchange,and protection of private property. 
C) Economies that are highly free tend to grow less rapidly than those with less economic freedom. 
D) All of the above are correct. 
A) Economic freedom is present if a country is a political democracy. 
B) Economic freedom ratings indicate the consistency of a nation's institutions and policies with personal choice,freedom of exchange,and protection of private property. 
C) Economies that are highly free tend to grow less rapidly than those with less economic freedom. 
D) All of the above are correct.

Question 11

Which of the following is true?

Accepted Answer

A) Low income countries that have adopted institutions and policies consistent with economic freedom have grown rapidly. 
B) Low-income countries that have adopted institutions and policies consistent with economic freedom have failed to grow more rapidly than economies that are relatively unfree. 
C) Economic freedom appears to improve the performance of developed economies,but not those that are less developed. 
D) Economic freedom appears to improve the performance of less developed economies,but not those that already have a high degree of development. 
A) Low income countries that have adopted institutions and policies consistent with economic freedom have grown rapidly. 
B) Low-income countries that have adopted institutions and policies consistent with economic freedom have failed to grow more rapidly than economies that are relatively unfree. 
C) Economic freedom appears to improve the performance of developed economies,but not those that are less developed. 
D) Economic freedom appears to improve the performance of less developed economies,but not those that already have a high degree of development.

Question 12

Which of the following countries have liberalized their economies and substantially improved their economic freedom rating since 1990?

Accepted Answer

A) Argentina and Brazil 
B) Zimbabwe and the Republic of Congo. 
C) Estonia and India 
D) Italy and France 
A) Argentina and Brazil 
B) Zimbabwe and the Republic of Congo. 
C) Estonia and India 
D) Italy and France

Question 13

Which of the following will increase economic freedom?

Accepted Answer

A) institutions and policies supportive of voluntary exchange 
B) high tariff rates 
C) high taxes 
D) rapid and unpredictable inflation 
E) all of the above 
A) institutions and policies supportive of voluntary exchange 
B) high tariff rates 
C) high taxes 
D) rapid and unpredictable inflation 
E) all of the above

Question 14

Democracy tends to best promote economic freedom when there is

Accepted Answer

A) checks on the power of both the executive and legislative majorities. 
B) constitutional protection of private property rights. 
C) political decentralization. 
D) all of the above. 
A) checks on the power of both the executive and legislative majorities. 
B) constitutional protection of private property rights. 
C) political decentralization. 
D) all of the above.

Question 15

Income per person in the United States is approximately ____ that of Sierra Leone,Malawi,and Niger,three of the world's poorest countries.

Accepted Answer

A) the same as 
B) double 
C) ten times 
D) fifty times 
A) the same as 
B) double 
C) ten times 
D) fifty times

Question 16

Which of the following is one of the reasons to believe that institutional change is more likely now than in the past?

Accepted Answer

A) Previously colonized countries are now in the position to make their own institutional and policy choices. 
B) The prevalence of communism is growing around the world. 
C) Increasing transportation and communication costs have weakened the importance of institutions and policies as there is less worldwide competition for investment. 
D) All of the above. 
A) Previously colonized countries are now in the position to make their own institutional and policy choices. 
B) The prevalence of communism is growing around the world. 
C) Increasing transportation and communication costs have weakened the importance of institutions and policies as there is less worldwide competition for investment. 
D) All of the above.

Question 17

Which of the following economies was most economically free during 1980-2009?

Accepted Answer

A) Singapore 
B) Russia 
C) Iran 
D) Myanmar 
A) Singapore 
B) Russia 
C) Iran 
D) Myanmar

Question 18

Which of the following is one of the reasons to believe that institutional change is more likely now than in the past?

Accepted Answer

A) The colonial era is over and countries are in the position to make their own institutional choices. 
B) The collapse of communism has expanded the opportunity for institutional change. 
C) Reductions in transportation and communication costs have increased the importance of institutions and policies. 
D) All of the above are true. 
A) The colonial era is over and countries are in the position to make their own institutional choices. 
B) The collapse of communism has expanded the opportunity for institutional change. 
C) Reductions in transportation and communication costs have increased the importance of institutions and policies. 
D) All of the above are true.

Question 19

Realization of gains from trade,entrepreneurial discovery,and investment are largely dependent on

Accepted Answer

A) competitive elections and political democracy. 
B) the presence of institutions and policies consistent with economic freedom. 
C) the use of tariffs and quotas to protect domestic businesses from competition with foreigners. 
D) the use of government planning to direct investments into worthwhile projects. 
A) competitive elections and political democracy. 
B) the presence of institutions and policies consistent with economic freedom. 
C) the use of tariffs and quotas to protect domestic businesses from competition with foreigners. 
D) the use of government planning to direct investments into worthwhile projects.

Question 20

Which of the following will increase economic freedom?

Accepted Answer

A) low rates of inflation and easy access to money that maintains its purchasing power 
B) high tariff rates 
C) government spending that comprises a large share of the economy 
D) rapid and unpredictable inflation 
A) low rates of inflation and easy access to money that maintains its purchasing power 
B) high tariff rates 
C) government spending that comprises a large share of the economy 
D) rapid and unpredictable inflation

Exam 17: Institutions,policies,and Cross-Country Differences in Income and Growth

When making income comparisons across countries,economists generally prefer to use

According to the Economic Freedom of the World (EFW)rating,which of the following countries has the highest level of economic freedom?

According to the Economic Freedom of the World (EFW)rating,which of the following countries has the lowest level of economic freedom?

Which of the following countries grew most rapidly during the 1980 through 2009 period?

Which of the following adopted reforms that have substantially improved their economic freedom rating since 1980?

If a country is going to achieve a high economic freedom rating,it must

A less-developed nation will be able to benefit substantially by adopting the technologies and the business practices that have been successful in other nations,but only if

Which of the following helps low income countries grow rapidly relative to high income countries?

Which of the following countries has the lowest per capita income?

Which of the following is true?

Which of the following is true?

Which of the following countries have liberalized their economies and substantially improved their economic freedom rating since 1990?

Which of the following will increase economic freedom?

Democracy tends to best promote economic freedom when there is

Income per person in the United States is approximately ____ that of Sierra Leone,Malawi,and Niger,three of the world's poorest countries.

Which of the following is one of the reasons to believe that institutional change is more likely now than in the past?

Which of the following economies was most economically free during 1980-2009?

Which of the following is one of the reasons to believe that institutional change is more likely now than in the past?

Realization of gains from trade,entrepreneurial discovery,and investment are largely dependent on

Which of the following will increase economic freedom?

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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