Question 1

Which of the following statements is FALSE?

Accepted Answer

A)  Saving helps create economic growth. 
B)  Improvements in quality of education are important for economic growth. 
C)  Free international trade helps create economic growth. 
D)  Faster population growth is the key to growth in real GDP per person. 
E)  Economic freedom requires property rights. 
A)  Saving helps create economic growth. 
B)  Improvements in quality of education are important for economic growth. 
C)  Free international trade helps create economic growth. 
D)  Faster population growth is the key to growth in real GDP per person. 
E)  Economic freedom requires property rights.

Question 2

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Accepted Answer

A)  63 years 
B)  77.7 years 
C)  70 years 
D)  109 years 
E)  100 years. 
A)  63 years 
B)  77.7 years 
C)  70 years 
D)  109 years 
E)  100 years.

Question 3

Classical growth theory predicts that in the long run there will be

Accepted Answer

A)  zero economic growth. 
B)  positive economic growth. 
C)  negative economic growth. 
D)  sustained increases in the productivity growth rate 
E)  sustained increases in economic growth. 
A)  zero economic growth. 
B)  positive economic growth. 
C)  negative economic growth. 
D)  sustained increases in the productivity growth rate 
E)  sustained increases in economic growth.

Question 4

For economic freedom to exist,

Accepted Answer

A)  copyright laws must be abolished and markets supervised by the government. 
B)  democracy must exist. 
C)  property rights must be protected and markets must be free. 
D)  human capital must be given away free. 
E)  money must be free. 
A)  copyright laws must be abolished and markets supervised by the government. 
B)  democracy must exist. 
C)  property rights must be protected and markets must be free. 
D)  human capital must be given away free. 
E)  money must be free.

Question 5

$$\begin{array} { c c c } 
& \begin{array} { c } 
\text { Employment } \
\text { Year }
\end{array} & \begin{array} { c } 
\text { Real GDP } \
\text { (millions of people) (billions of 2005 francs) }
\end{array} \
\hline 1998 & 58.85 & 8,243.9 \
1997 & 58.61 & 7,992.2 \
\hline
\end{array}$$
-If a country experiences a real GDP growth rate of 4 percent, real GDP will double in

Accepted Answer

A)  14 years. 
B)  17.5 years. 
C)  23.3 years. 
D)  35 years. 
E)  25 years. 
A)  14 years. 
B)  17.5 years. 
C)  23.3 years. 
D)  35 years. 
E)  25 years.

Question 6

Which theory of economic growth emphasizes that technological innovations result from people's choices?
i. Classical growth theory
ii. Neoclassical growth theory
iii. New growth theory

Accepted Answer

A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and ii 
A)  i only 
B)  ii only 
C)  iii only 
D)  ii and iii 
E)  i and ii

Question 7

This year, real GDP per person in Country A is eight times real GDP per person in Country B.If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year?

Accepted Answer

A)  14 years 
B)  28 years 
C)  56 years 
D)  42 years 
E)  It will never reach Country A's level of GDP per person 
A)  14 years 
B)  28 years 
C)  56 years 
D)  42 years 
E)  It will never reach Country A's level of GDP per person

Question 8

Classical growth theory predicts that increases in real GDP per person will

Accepted Answer

A)  not last because higher income leads to a population explosion. 
B)  last because higher growth leads to new technology. 
C)  last because people make choices in the pursuit of higher profits. 
D)  not last because higher income encourages smaller families and a lower population growth rate. 
E)  last only if the government directs firms to make more investments in capital and new technology. 
A)  not last because higher income leads to a population explosion. 
B)  last because higher growth leads to new technology. 
C)  last because people make choices in the pursuit of higher profits. 
D)  not last because higher income encourages smaller families and a lower population growth rate. 
E)  last only if the government directs firms to make more investments in capital and new technology.

Question 9

The new growth theory's comparison of the economy to a perpetual motion machine implies that

Accepted Answer

A)  permanent growth is not possible. 
B)  the economy will forever create and destroy jobs. 
C)  overpopulation will eventually overtake the resources of the planet. 
D)  technology changes just happen. 
E)  labor productivity has no influence on the economy. 
A)  permanent growth is not possible. 
B)  the economy will forever create and destroy jobs. 
C)  overpopulation will eventually overtake the resources of the planet. 
D)  technology changes just happen. 
E)  labor productivity has no influence on the economy.

Question 10

A government policy that taxes saving in order to discourage saving and encourage spending will ________.

Accepted Answer

A)  slow economic growth 
B)  speed economic growth 
C)  create a greater incentive for people to specialize 
D)  strengthen people's property rights 
E)  increase the growth rate of capital 
A)  slow economic growth 
B)  speed economic growth 
C)  create a greater incentive for people to specialize 
D)  strengthen people's property rights 
E)  increase the growth rate of capital

Question 11

According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?

Accepted Answer

A)  It will take 11.6 years fewer. 
B)  It will take 35 years fewer. 
C)  It will take 58.3 years fewer. 
D)  It will take 20 years fewer. 
E)  It will take 17.9 years fewer. 
A)  It will take 11.6 years fewer. 
B)  It will take 35 years fewer. 
C)  It will take 58.3 years fewer. 
D)  It will take 20 years fewer. 
E)  It will take 17.9 years fewer.

Question 12

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year, what is its growth rate of real GDP per person?

Accepted Answer

Last year real GDP per person equaled ($

Question 13

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

Accepted Answer

A)  don't have enough natural resources. 
B)  don't have strong military power to force people to work harder. 
C)  don't have social institutions with a strong rule of law and economic freedom. 
D)  strongly encouraged international trade. 
E)  don't have a strong central government. 
A)  don't have enough natural resources. 
B)  don't have strong military power to force people to work harder. 
C)  don't have social institutions with a strong rule of law and economic freedom. 
D)  strongly encouraged international trade. 
E)  don't have a strong central government.

Question 14

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

Accepted Answer

A)  4 percent. 
B)  2 percent. 
C)  0.5 percent. 
D)  -3 percent. 
E)  8 percent. 
A)  4 percent. 
B)  2 percent. 
C)  0.5 percent. 
D)  -3 percent. 
E)  8 percent.

Question 15

Economic growth in Cuba has been slow; what can best explain the slow growth?

Accepted Answer

A)  Lack of economic resources 
B)  Lack of incentive mechanisms and economic freedom 
C)  Labor productivity is low. 
D)  A non-democratic form of government 
E)  Too much competition within the economy 
A)  Lack of economic resources 
B)  Lack of incentive mechanisms and economic freedom 
C)  Labor productivity is low. 
D)  A non-democratic form of government 
E)  Too much competition within the economy

Question 16

At its most basic level, economic growth depends on

Accepted Answer

A)  creating the right incentives. 
B)  saving by the government. 
C)  government leadership. 
D)  government's fixing prices to encourage stability. 
E)  political freedom. 
A)  creating the right incentives. 
B)  saving by the government. 
C)  government leadership. 
D)  government's fixing prices to encourage stability. 
E)  political freedom.

Question 17

Growth in physical capital depends most directly upon the

Accepted Answer

A)  amount of saving and investment. 
B)  number of firms in the nation. 
C)  speed of population growth. 
D)  amount of government expenditures. 
E)  level of human capital. 
A)  amount of saving and investment. 
B)  number of firms in the nation. 
C)  speed of population growth. 
D)  amount of government expenditures. 
E)  level of human capital.

Question 18

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year.The economic growth rate between these years has been

Accepted Answer

A)  10.31 percent. 
B)  4.65 percent. 
C)  5.67 percent. 
D)  7.67 percent. 
E)  $0.4 trillion. 
A)  10.31 percent. 
B)  4.65 percent. 
C)  5.67 percent. 
D)  7.67 percent. 
E)  $0.4 trillion.

Question 19

The quantity of real GDP produced by one hour of labor is defined as

Accepted Answer

A)  real GDP per person. 
B)  the advance in technology. 
C)  the growth rate of technology. 
D)  labor productivity. 
E)  economic growth. 
A)  real GDP per person. 
B)  the advance in technology. 
C)  the growth rate of technology. 
D)  labor productivity. 
E)  economic growth.

Question 20

Countries that enjoy economic growth

Accepted Answer

A)  have property rights and markets which provide incentives for discovering new technologies. 
B)  have economies that allow the government to make decisions in everyone's best interests. 
C)  restrict international trade so that domestic industries can grow. 
D)  place high taxes on saving and investment. 
E)  place controls on property rights so that firms are protected from competition. 
A)  have property rights and markets which provide incentives for discovering new technologies. 
B)  have economies that allow the government to make decisions in everyone's best interests. 
C)  restrict international trade so that domestic industries can grow. 
D)  place high taxes on saving and investment. 
E)  place controls on property rights so that firms are protected from competition.

Which of the following statements is FALSE?

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Classical growth theory predicts that in the long run there will be

For economic freedom to exist,

Employment Year Real GDP (millions of people) (billions of 2005 francs) 1998 58.85 8,243.9 1997 58.61 7,992.2 -If a country experiences a real GDP growth rate of 4 percent, real GDP will double in

Which theory of economic growth emphasizes that technological innovations result from people's choices? i. Classical growth theory ii. Neoclassical growth theory iii. New growth theory

This year, real GDP per person in Country A is eight times real GDP per person in Country B.If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year?

Classical growth theory predicts that increases in real GDP per person will

The new growth theory's comparison of the economy to a perpetual motion machine implies that

A government policy that taxes saving in order to discourage saving and encourage spending will ________.

According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year, what is its growth rate of real GDP per person?

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

Economic growth in Cuba has been slow; what can best explain the slow growth?

At its most basic level, economic growth depends on

Growth in physical capital depends most directly upon the

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year.The economic growth rate between these years has been

The quantity of real GDP produced by one hour of labor is defined as

Countries that enjoy economic growth

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 9: Economic Growth

Which of the following statements is FALSE?

Approximately how long will it take Ethiopia to double its real GDP per person of $100 if its growth rate of real GDP per person is 0.9 percent?

Classical growth theory predicts that in the long run there will be

For economic freedom to exist,

Employment Year Real GDP (millions of people) (billions of 2005 francs) 1998 58.85 8,243.9 1997 58.61 7,992.2 -If a country experiences a real GDP growth rate of 4 percent, real GDP will double in

Which theory of economic growth emphasizes that technological innovations result from people's choices? i. Classical growth theory ii. Neoclassical growth theory iii. New growth theory

This year, real GDP per person in Country A is eight times real GDP per person in Country B.If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year?

Classical growth theory predicts that increases in real GDP per person will

The new growth theory's comparison of the economy to a perpetual motion machine implies that

A government policy that taxes saving in order to discourage saving and encourage spending will ________.

According to the Rule of 70, if a country grows at 2.0 percent per year instead of 1.5 percent per year, how many fewer years will it take to double its level of real GDP?

A nation's population was 250 million last year and is 255 million this year.If its real GDP was $8.5 trillion last year and is $8.8 trillion this year, what is its growth rate of real GDP per person?

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

If real GDP grows at a rate of 6 percent and population grows at a rate of 2 percent, then real GDP per person grows at a rate of

Economic growth in Cuba has been slow; what can best explain the slow growth?

At its most basic level, economic growth depends on

Growth in physical capital depends most directly upon the

Real GDP is $9 trillion in the current year and $8.6 trillion in the previous year.The economic growth rate between these years has been

The quantity of real GDP produced by one hour of labor is defined as

Countries that enjoy economic growth

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and the Natural Unemployment Rate

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters