Question 1

Democracy tends to best promote freedom when there is

Accepted Answer

A) unrestrained executive and legislative majority power. 
B) constitutional protection of private property rights. 
C) a large and centralized government sector. 
D) all of the above. 
A) unrestrained executive and legislative majority power. 
B) constitutional protection of private property rights. 
C) a large and centralized government sector. 
D) all of the above.

Question 2

Which of the following would contribute to a higher Economic Freedom of the World (EFW)rating for a country?

Accepted Answer

A) low taxes 
B) rapid inflation 
C) high tariffs on imported goods 
D) government spending being a large share of the economy 
A) low taxes 
B) rapid inflation 
C) high tariffs on imported goods 
D) government spending being a large share of the economy

Question 3

Since the mid-1980s,the overall Economic Freedom of the World (EFW)ratings of most countries have been increasing due to

Accepted Answer

A) more stable monetary policies. 
B) lower tax rates. 
C) trade liberalization. 
D) All of the above. 
A) more stable monetary policies. 
B) lower tax rates. 
C) trade liberalization. 
D) All of the above.

Question 4

In order to achieve a high economic freedom rating,a country must

Accepted Answer

A) provide secure protection of privately owned property and evenhanded enforcement of contracts. 
B) refrain from creating barriers that limit domestic and international trade. 
C) rely more fully on markets rather than governments to allocate goods and resources. 
D) all of the above. 
A) provide secure protection of privately owned property and evenhanded enforcement of contracts. 
B) refrain from creating barriers that limit domestic and international trade. 
C) rely more fully on markets rather than governments to allocate goods and resources. 
D) all of the above.

Question 5

According to the Economic Freedom of the World measure,between 2000 and 2009 the economic freedom of the United States

Accepted Answer

A) declined and its rank fell from third to tenth during this period. 
B) increased,and the U.S.became the freest economy in the world during this decade. 
C) was largely unchanged and the U.S.remained the third freest economy in the world,behind only Hong Kong and Singapore. 
D) decreased,but the U.S.was still the freest economy in the world in 2009. 
A) declined and its rank fell from third to tenth during this period. 
B) increased,and the U.S.became the freest economy in the world during this decade. 
C) was largely unchanged and the U.S.remained the third freest economy in the world,behind only Hong Kong and Singapore. 
D) decreased,but the U.S.was still the freest economy in the world in 2009.

Question 6

Which of the following will increase economic freedom?

Accepted Answer

A) subsidies and regulations that favor business 
B) high tariff rates 
C) high marginal tax rates 
D) protection of persons and their property from aggression 
A) subsidies and regulations that favor business 
B) high tariff rates 
C) high marginal tax rates 
D) protection of persons and their property from aggression

Question 7

Compared to countries with less economic freedom,countries with more economic freedom

Accepted Answer

A) achieve higher per person income levels,but they also have higher poverty rates. 
B) grow more rapidly,but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies. 
C) achieve both higher income levels per person and lower rates of poverty. 
D) grow less rapidly and experience higher poverty rates. 
A) achieve higher per person income levels,but they also have higher poverty rates. 
B) grow more rapidly,but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies. 
C) achieve both higher income levels per person and lower rates of poverty. 
D) grow less rapidly and experience higher poverty rates.

Question 8

Which of the following economies is most economically free?

Accepted Answer

A) Hong-Kong 
B) Russia 
C) Algeria 
D) Myanmar 
A) Hong-Kong 
B) Russia 
C) Algeria 
D) Myanmar

Question 9

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) Singapore 
B) Brazil 
C) Myanmar 
D) Democratic Republic of Congo 
A) Singapore 
B) Brazil 
C) Myanmar 
D) Democratic Republic of Congo

Question 10

Which of the following countries have the highest per person income levels?

Accepted Answer

A) China and Russia 
B) France and Germany 
C) Ireland and the United States 
D) Australia and Japan 
A) China and Russia 
B) France and Germany 
C) Ireland and the United States 
D) Australia and Japan

Question 11

Which of the following economies have the highest degree of economic freedom?

Accepted Answer

A) Hong Kong and Singapore 
B) Argentina and Brazil 
C) Germany and Italy 
D) Russia and Nigeria 
A) Hong Kong and Singapore 
B) Argentina and Brazil 
C) Germany and Italy 
D) Russia and Nigeria

Question 12

Countries with more economic freedom during 1980-2009 tended to

Accepted Answer

A) grow more rapidly,but the 2009 income levels of the freer economies were still lower than those that were less free. 
B) achieve higher levels of income but the growth rates of the less free economies have been more rapid in recent years. 
C) achieve both more rapid growth and higher income levels than those that were less free. 
D) grow less rapidly and the 2009 income levels of the freer economies were lower than those that were less free. 
A) grow more rapidly,but the 2009 income levels of the freer economies were still lower than those that were less free. 
B) achieve higher levels of income but the growth rates of the less free economies have been more rapid in recent years. 
C) achieve both more rapid growth and higher income levels than those that were less free. 
D) grow less rapidly and the 2009 income levels of the freer economies were lower than those that were less free.

Question 13

The purchasing power parity method of comparing income levels across countries

Accepted Answer

A) calculates the cost of purchasing a common bundle of goods in each country and then uses this price index to convert each country's income to a common currency. 
B) uses the exchange rate to convert the income level of each country to a common currency. 
C) uses the prime interest rate in each country to convert the income level of each country to a common currency. 
D) calculates the ratio of imports relative to exports in each country and then uses this ratio to convert each country's income to a common currency. 
A) calculates the cost of purchasing a common bundle of goods in each country and then uses this price index to convert each country's income to a common currency. 
B) uses the exchange rate to convert the income level of each country to a common currency. 
C) uses the prime interest rate in each country to convert the income level of each country to a common currency. 
D) calculates the ratio of imports relative to exports in each country and then uses this ratio to convert each country's income to a common currency.

Question 14

Compared to those with less economic freedom,countries with more economic freedom generally have ____ per capita GDP levels and ____ growth rates.

Accepted Answer

A) lower;less rapid 
B) lower;more rapid 
C) higher;less rapid 
D) higher;more rapid 
A) lower;less rapid 
B) lower;more rapid 
C) higher;less rapid 
D) higher;more rapid

Question 15

Other things constant,countries that invest more will grow

Accepted Answer

A) more rapidly. 
B) less rapidly. 
C) at the same rate. 
D) at exactly 2% per year. 
A) more rapidly. 
B) less rapidly. 
C) at the same rate. 
D) at exactly 2% per year.

Question 16

Which of the following is true regarding the growth record of LDCs over the past 25 years?

Accepted Answer

A) All have been growing rapidly. 
B) All have experienced negative growth rates. 
C) Some are among the highest growth countries,whereas others are among the lowest. 
D) None of the above. 
A) All have been growing rapidly. 
B) All have experienced negative growth rates. 
C) Some are among the highest growth countries,whereas others are among the lowest. 
D) None of the above.

Question 17

In order to achieve a high economic freedom rating,a country must

Accepted Answer

A) elect political officials democratically. 
B) protect property rights,enforce contracts even-handedly,and rely extensively on markets to allocate goods and services. 
C) provide citizens with housing,health care,and other basic goods free of charge. 
D) use the taxing power of the state to redistribute income from the rich to the poor and thereby promote income equality. 
A) elect political officials democratically. 
B) protect property rights,enforce contracts even-handedly,and rely extensively on markets to allocate goods and services. 
C) provide citizens with housing,health care,and other basic goods free of charge. 
D) use the taxing power of the state to redistribute income from the rich to the poor and thereby promote income equality.

Question 18

Which of the following countries had the highest growth rate of per capita GDP over the past 27 years?

Accepted Answer

A) China 
B) Madagascar 
C) Haiti 
D) United States 
A) China 
B) Madagascar 
C) Haiti 
D) United States

Question 19

The income per person in the quartile of countries with the most economic freedom was approximately ____ times the figure for the least free group of countries.

Accepted Answer

A) 2 
B) 4 
C) 5 
D) 8 
A) 2 
B) 4 
C) 5 
D) 8

Question 20

Some low-income countries generally remain poor because

Accepted Answer

A) their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B) they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C) they are poorly endowed with natural resources,which are essential for long-term growth. 
D) when the average income level is low,workers have little incentive to earn higher incomes. 
A) their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B) they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C) they are poorly endowed with natural resources,which are essential for long-term growth. 
D) when the average income level is low,workers have little incentive to earn higher incomes.

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

Democracy tends to best promote freedom when there is

Which of the following would contribute to a higher Economic Freedom of the World (EFW)rating for a country?

Since the mid-1980s,the overall Economic Freedom of the World (EFW)ratings of most countries have been increasing due to

In order to achieve a high economic freedom rating,a country must

According to the Economic Freedom of the World measure,between 2000 and 2009 the economic freedom of the United States

Which of the following will increase economic freedom?

Compared to countries with less economic freedom,countries with more economic freedom

Which of the following economies is most economically free?

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

Which of the following countries have the highest per person income levels?

Which of the following economies have the highest degree of economic freedom?

Countries with more economic freedom during 1980-2009 tended to

The purchasing power parity method of comparing income levels across countries

Compared to those with less economic freedom,countries with more economic freedom generally have ____ per capita GDP levels and ____ growth rates.

Other things constant,countries that invest more will grow

Which of the following is true regarding the growth record of LDCs over the past 25 years?

In order to achieve a high economic freedom rating,a country must

Which of the following countries had the highest growth rate of per capita GDP over the past 27 years?

The income per person in the quartile of countries with the most economic freedom was approximately ____ times the figure for the least free group of countries.

Some low-income countries generally remain poor because

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The Economics of Collective Decision-Making

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Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

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Fiscal Policy: the Keynesian View and Historical Perspective

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Modern Macroeconomics and Monetary Policy

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Education: Problems and Performance

Earnings Differences Between Men and Women

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Filters

Compared to those with less economic freedom,countries with more economic freedom generally have per capita GDP levels and growth rates.