Question 1

Which of the following is true?

Accepted Answer

A) In 1960,the per capita income levels of Hong Kong and Singapore were greater than those of the United States and Canada. 
B) The economies of Hong Kong and Singapore have grown slowly in recent decades. 
C) Economic freedom ratings indicate that both Hong Kong and Singapore rank among the world's freest economies. 
D) Economic freedom ratings indicate that Nigeria and Venezuela rank among the world's freest economies. 
A) In 1960,the per capita income levels of Hong Kong and Singapore were greater than those of the United States and Canada. 
B) The economies of Hong Kong and Singapore have grown slowly in recent decades. 
C) Economic freedom ratings indicate that both Hong Kong and Singapore rank among the world's freest economies. 
D) Economic freedom ratings indicate that Nigeria and Venezuela rank among the world's freest economies.

Question 2

Which of the following is true in regards to Singapore?

Accepted Answer

A) It has a high level of economic freedom,but a low rate of economic growth. 
B) It has a low level of economic freedom,but a high rate of economic growth. 
C) It has both a high level of economic freedom and a high rate of economic growth. 
D) It has both a low level of economic freedom and a low rate of economic growth. 
A) It has a high level of economic freedom,but a low rate of economic growth. 
B) It has a low level of economic freedom,but a high rate of economic growth. 
C) It has both a high level of economic freedom and a high rate of economic growth. 
D) It has both a low level of economic freedom and a low rate of economic growth.

Question 3

(I)Historically,countries with colonial settlers who planned on staying for long periods of time set up sound economic institutions. (II)Countries with harsh environments not suitable for permanent settlements resulted in colonial settlers adopting weaker and less productive economic institutions before leaving.

Accepted Answer

A) I is true;II is false. 
B) I is false;II is true. 
C) Both I and II are true. 
D) Both I and II are false. 
A) I is true;II is false. 
B) I is false;II is true. 
C) Both I and II are true. 
D) Both I and II are false.

Question 4

Which of the following is true?

Accepted Answer

A) The developed nations are growing rapidly and the less-developed nations are stagnating. 
B) Most of the countries that have achieved the highest growth rates in the world during the last quarter of a century were classified as LDCs in 1980. 
C) It is an oversimplification to divide the world into the growing,developed nations and the stagnating,less-developed nations. 
D) Both b and c are true. 
E) All of the above are true. 
A) The developed nations are growing rapidly and the less-developed nations are stagnating. 
B) Most of the countries that have achieved the highest growth rates in the world during the last quarter of a century were classified as LDCs in 1980. 
C) It is an oversimplification to divide the world into the growing,developed nations and the stagnating,less-developed nations. 
D) Both b and c are true. 
E) All of the above are true.

Question 5

These two countries adopted reforms that liberalized their economies during the 1960s and they eventually became two of the world's freest economies.The two economies are

Accepted Answer

A) Russia and India. 
B) Nigeria and Zimbabwe 
C) Hong Kong and Singapore 
D) Brazil and Venezuela 
A) Russia and India. 
B) Nigeria and Zimbabwe 
C) Hong Kong and Singapore 
D) Brazil and Venezuela

Question 6

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

Accepted Answer

A) Malawi 
B) Niger 
C) Ireland 
D) Mexico 
A) Malawi 
B) Niger 
C) Ireland 
D) Mexico

Question 7

Which of the following is true?

Accepted Answer

A) The rich countries are consistently getting richer,while the poor countries are getting poorer. 
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2009 period. 
C) The growth picture of LDCs is clearly one of diversity;some LDCs are growing rapidly,while others continue to stagnate. 
D) The fastest growing countries in the world are all high-income industrial economies. 
A) The rich countries are consistently getting richer,while the poor countries are getting poorer. 
B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2009 period. 
C) The growth picture of LDCs is clearly one of diversity;some LDCs are growing rapidly,while others continue to stagnate. 
D) The fastest growing countries in the world are all high-income industrial economies.

Question 8

Researchers have found that countries that were settled by Europeans who planned on staying permanently were

Accepted Answer

A) more likely to protect private ownership rights and limit the power of the government. 
B) less likely to protect private ownership rights and limit the power of the government. 
C) more likely to protect private ownership,but less likely to limit the power of the government. 
D) less likely to protect private ownership,but more likely to limit the power of the government. 
A) more likely to protect private ownership rights and limit the power of the government. 
B) less likely to protect private ownership rights and limit the power of the government. 
C) more likely to protect private ownership,but less likely to limit the power of the government. 
D) less likely to protect private ownership,but more likely to limit the power of the government.

Question 9

The rapid growth rates of less developed countries (LDCs)after adopting institutions and policies more favorable to economic freedom and voluntary exchange is not surprising when one considers that

Accepted Answer

A) LDCs can emulate and borrow successful practices and technologies from other,more developed nations. 
B) foreign aid payments to a less developed country are nearly always expanded rapidly when the country begins to increase its income level. 
C) the governments of LDCs play a larger role in economic planning,when economic freedom rises. 
D) economic theory indicates that improvements in institutions normally result from economic growth,rather than growth stemming from better institutions. 
A) LDCs can emulate and borrow successful practices and technologies from other,more developed nations. 
B) foreign aid payments to a less developed country are nearly always expanded rapidly when the country begins to increase its income level. 
C) the governments of LDCs play a larger role in economic planning,when economic freedom rises. 
D) economic theory indicates that improvements in institutions normally result from economic growth,rather than growth stemming from better institutions.

Question 10

The Economic Freedom of the World index is a measure of the consistency of a nation's institutions and policies with

Accepted Answer

A) political democracy. 
B) economic freedom. 
C) an Egalitarian distribution of income. 
D) economic nationalism. 
A) political democracy. 
B) economic freedom. 
C) an Egalitarian distribution of income. 
D) economic nationalism.

Question 11

In a majority-rules democracy,economic thinking suggests that we should expect to see institutions and policies that

Accepted Answer

A) are short-sighted. 
B) take the long view,sacrificing current benefits to get larger future benefits. 
C) benefit the common citizen at the expense of narrow special interest groups which,after all,have fewer voters. 
D) are biased against income transfer programs,regardless of constitutional limits. 
A) are short-sighted. 
B) take the long view,sacrificing current benefits to get larger future benefits. 
C) benefit the common citizen at the expense of narrow special interest groups which,after all,have fewer voters. 
D) are biased against income transfer programs,regardless of constitutional limits.

Question 12

Which of the following is true concerning the growth record of less developed countries (LDCs)during the last several decades?

Accepted Answer

A) The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B) None of the LDCs have been able to match the per capita income growth rate of the United States. 
C) During the last two decades,the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more)have been LDCs. 
D) Both a and c are correct. 
E) All of the above are correct. 
A) The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B) None of the LDCs have been able to match the per capita income growth rate of the United States. 
C) During the last two decades,the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more)have been LDCs. 
D) Both a and c are correct. 
E) All of the above are correct.

Question 13

What is the Economic Freedom of the World index designed to measure? What will determine whether the rating of a country will be high or low on this index?

Accepted Answer

The Economic Freedom of the World index

Question 14

How does investment as a share of GDP in countries with more economic freedom compare with economies that are less free? How does the productivity of investment in the freer economies compare with its productivity in the less free economies? How will this influence differences in growth rates and income levels? Explain.

Accepted Answer

Both investment as a share of GDP and th

Question 15

Compared to high-income developed countries,the per person income levels of poorer less developed countries are somewhat understated because

Accepted Answer

A) the GDP figures omit the production within the household sector,which is generally larger in the high-income countries. 
B) the GDP figures omit the production within the household sector,which is generally larger in the poorer countries. 
C) the GDP figures omit net exports,which are generally larger in the high income countries. 
D) the GDP figures omit net exports,which are generally larger in the poorer countries. 
A) the GDP figures omit the production within the household sector,which is generally larger in the high-income countries. 
B) the GDP figures omit the production within the household sector,which is generally larger in the poorer countries. 
C) the GDP figures omit net exports,which are generally larger in the high income countries. 
D) the GDP figures omit net exports,which are generally larger in the poorer countries.

Question 16

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

Accepted Answer

A) Argentina,Brazil,and Mexico 
B) China and India 
C) France and Germany 
D) Ireland,Norway,and the United States 
A) Argentina,Brazil,and Mexico 
B) China and India 
C) France and Germany 
D) Ireland,Norway,and the United States

Question 17

During 1980 through 2009,

Accepted Answer

A) the per capita income of high-income industrial countries declined. 
B) the fastest growing economies in the world were LDCs. 
C) almost all LDCs grew more rapidly than the high-income industrial economies. 
D) most of the countries with rapid growth rates during the last two decades were located in South America. 
A) the per capita income of high-income industrial countries declined. 
B) the fastest growing economies in the world were LDCs. 
C) almost all LDCs grew more rapidly than the high-income industrial economies. 
D) most of the countries with rapid growth rates during the last two decades were located in South America.

Question 18

What are some of the key economic factors that characterize countries with poor growth records?

Accepted Answer

Low-growth countries tend to share certa

Question 19

One-third of the world's population live in China and India.How did the growth rate of these two countries compare with the growth of high income industrial countries during 1980-2009?

Accepted Answer

A) Per capita GDP increased less rapidly in China and India than in the high income industrial countries. 
B) Per capita GDP increased more rapidly in China and India than in the high income industrial countries. 
C) China grew more rapidly than the high income industrial countries,but India grew less rapidly. 
D) India grew more rapidly than the high income industrial countries,but China grew less. 
A) Per capita GDP increased less rapidly in China and India than in the high income industrial countries. 
B) Per capita GDP increased more rapidly in China and India than in the high income industrial countries. 
C) China grew more rapidly than the high income industrial countries,but India grew less rapidly. 
D) India grew more rapidly than the high income industrial countries,but China grew less.

Question 20

Which of the following is true regarding investment?

Accepted Answer

A) Investment tends to have a larger impact on economic growth in countries with high levels of economic freedom because it is channeled to more productive uses. 
B) Countries who see large inflows of foreign direct investment tend to have negative rates of economic growth as the foreign companies mainly take profits and resources out of the country. 
C) Investment tends to be larger in countries with low levels of economic freedom because of the low wages present in these countries. 
D) None of the above. 
A) Investment tends to have a larger impact on economic growth in countries with high levels of economic freedom because it is channeled to more productive uses. 
B) Countries who see large inflows of foreign direct investment tend to have negative rates of economic growth as the foreign companies mainly take profits and resources out of the country. 
C) Investment tends to be larger in countries with low levels of economic freedom because of the low wages present in these countries. 
D) None of the above.

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

Which of the following is true?

Which of the following is true in regards to Singapore?

Which of the following is true?

These two countries adopted reforms that liberalized their economies during the 1960s and they eventually became two of the world's freest economies.The two economies are

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

Which of the following is true?

Researchers have found that countries that were settled by Europeans who planned on staying permanently were

The rapid growth rates of less developed countries (LDCs)after adopting institutions and policies more favorable to economic freedom and voluntary exchange is not surprising when one considers that

The Economic Freedom of the World index is a measure of the consistency of a nation's institutions and policies with

In a majority-rules democracy,economic thinking suggests that we should expect to see institutions and policies that

Which of the following is true concerning the growth record of less developed countries (LDCs)during the last several decades?

What is the Economic Freedom of the World index designed to measure? What will determine whether the rating of a country will be high or low on this index?

Compared to high-income developed countries,the per person income levels of poorer less developed countries are somewhat understated because

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

During 1980 through 2009,

What are some of the key economic factors that characterize countries with poor growth records?

One-third of the world's population live in China and India.How did the growth rate of these two countries compare with the growth of high income industrial countries during 1980-2009?

Which of the following is true regarding investment?

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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