Question 1

To encourage economic development a country should do all of the following EXCEPT

Accepted Answer

A) invest in human capital. 
B) limit the amount of imports allowed into the country. 
C) allow creative destruction to run its course. 
D) establish a system of property rights. 
A) invest in human capital. 
B) limit the amount of imports allowed into the country. 
C) allow creative destruction to run its course. 
D) establish a system of property rights.

Question 2

Free trade is viewed as key to economic development because

Accepted Answer

A) it encourages a faster spread of technology. 
B) it encourages a country's exports only. 
C) it brings in expensive new technology. 
D) none of the above is correct. 
A) it encourages a faster spread of technology. 
B) it encourages a country's exports only. 
C) it brings in expensive new technology. 
D) none of the above is correct.

Question 3

New growth theory is concerned with

Accepted Answer

A) finding a good way to measure economic growth. 
B) increasing the savings rate in the U.S. 
C) understanding the forces that increase productivity. 
D) understanding how compounding works. 
A) finding a good way to measure economic growth. 
B) increasing the savings rate in the U.S. 
C) understanding the forces that increase productivity. 
D) understanding how compounding works.

Question 4

Labor productivity measures

Accepted Answer

A) the growth of per capita real GDP. 
B) the growth of real output. 
C) real output per labor hour. 
D) the growth in the quantity of labor. 
A) the growth of per capita real GDP. 
B) the growth of real output. 
C) real output per labor hour. 
D) the growth in the quantity of labor.

Question 5

Which of the following is TRUE?

Accepted Answer

A) Real standards of living can increase without any positive economic growth. 
B) Real growth rates fail to account for by price level changes. 
C) Real and nominal values are not related. 
D) Real standards of living decrease with positive economic growth. 
A) Real standards of living can increase without any positive economic growth. 
B) Real growth rates fail to account for by price level changes. 
C) Real and nominal values are not related. 
D) Real standards of living decrease with positive economic growth.

Question 6

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP)calculations account for this shortening of the average workweek?

Accepted Answer

A) Real Gross Domestic Product (GDP)does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP)does. 
B) Neither real Gross Domestic Product (GDP)nor per capita real Gross Domestic Product (GDP)includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C) Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP)gains. 
D) Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP)will understate the nation's actual economic growth. 
A) Real Gross Domestic Product (GDP)does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP)does. 
B) Neither real Gross Domestic Product (GDP)nor per capita real Gross Domestic Product (GDP)includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C) Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP)gains. 
D) Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP)will understate the nation's actual economic growth.

Question 7

According to the text, the relationship between economic growth and the degree of how closed an economy is

Accepted Answer

A) positive. 
B) negative. 
C) constant. 
D) unstable. 
A) positive. 
B) negative. 
C) constant. 
D) unstable.

Question 8

Which of the following is most likely to reduce the rate of economic growth?

Accepted Answer

A) a high domestic saving rate 
B) investment in human capital 
C) subsidies for R&D activities 
D) slow technological progress 
A) a high domestic saving rate 
B) investment in human capital 
C) subsidies for R&D activities 
D) slow technological progress

Question 9

Explain the relationship between economic growth and labor productivity.

Accepted Answer

Economic growth equals the sum of the gr

Question 10

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 11

There are a number of benefits that usually accompany economic growth. The following are such benefits EXCEPT

Accepted Answer

A) increase in literacy. 
B) increased expected life-spans. 
C) political stability. 
D) urban congestion. 
A) increase in literacy. 
B) increased expected life-spans. 
C) political stability. 
D) urban congestion.

Question 12

Per capita real GDP is a measure of

Accepted Answer

A) economic welfare. 
B) cost of living standards. 
C) cultural harmony. 
D) productive activity. 
A) economic welfare. 
B) cost of living standards. 
C) cultural harmony. 
D) productive activity.

Question 13

Which of the following factors are considered under "new growth theory"?

Accepted Answer

A) technology 
B) research 
C) innovation 
D) All of the above are correct. 
A) technology 
B) research 
C) innovation 
D) All of the above are correct.

Question 14

One of the implications of new growth theory is that economic growth arises from

Accepted Answer

A) limits on international trade. 
B) investments in knowledge. 
C) financial safety nets for the poor, such as Medicaid. 
D) reductions in the birth rate. 
A) limits on international trade. 
B) investments in knowledge. 
C) financial safety nets for the poor, such as Medicaid. 
D) reductions in the birth rate.

Question 15

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

Accepted Answer

A) allow the government control of the innovations. 
B) give confidence to inventors that they will profit from their innovation. 
C) give confidence to consumers that the products they buy are safe. 
D) give businesses loans to buy new machinery. 
A) allow the government control of the innovations. 
B) give confidence to inventors that they will profit from their innovation. 
C) give confidence to consumers that the products they buy are safe. 
D) give businesses loans to buy new machinery.

Question 16

To raise economic development, developing countries should

Accepted Answer

A) focus on their comparative advantage. 
B) focus on producing service goods. 
C) produce goods that are capital intensive and not labor intensive. 
D) not focus on economic growth. 
A) focus on their comparative advantage. 
B) focus on producing service goods. 
C) produce goods that are capital intensive and not labor intensive. 
D) not focus on economic growth.

Question 17

The historical record for the United States since 1900 shows

Accepted Answer

A) mostly positive economic growth, with two substantial periods of negative economic growth. 
B) economic growth for about half the years and economic decline for the other half. 
C) growth until 1970 and then a period of constant per capita real GDP. 
D) continuous economic growth, although at different rates, throughout the entire century. 
A) mostly positive economic growth, with two substantial periods of negative economic growth. 
B) economic growth for about half the years and economic decline for the other half. 
C) growth until 1970 and then a period of constant per capita real GDP. 
D) continuous economic growth, although at different rates, throughout the entire century.

Question 18

Giving up consumption today for consumption tomorrow accelerates economic growth by

Accepted Answer

A) having the economy produce no consumer goods. 
B) increasing saving out of disposable income. 
C) increasing the expected rate of inflation. 
D) rapid expansion of the money supply. 
A) having the economy produce no consumer goods. 
B) increasing saving out of disposable income. 
C) increasing the expected rate of inflation. 
D) rapid expansion of the money supply.

Question 19

Explain Paul Romer's ideas concerning economic growth.

Accepted Answer

Romer argues that knowledge is a factor

Question 20

It is likely that a small increase in a country's saving rate will have

Accepted Answer

A) a large effect on per capita real GDP many years later because the increase in saving leads to a slightly higher rate of economic growth which has large effects over time. 
B) a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth. 
C) a small effect on per capita real GDP many years later because the increase in saving will have very little effect on the growth rate. 
D) a small effect on per capita real GDP many years later because the increase in saving will be offset in later years by a decrease in the saving rate. 
A) a large effect on per capita real GDP many years later because the increase in saving leads to a slightly higher rate of economic growth which has large effects over time. 
B) a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth. 
C) a small effect on per capita real GDP many years later because the increase in saving will have very little effect on the growth rate. 
D) a small effect on per capita real GDP many years later because the increase in saving will be offset in later years by a decrease in the saving rate.

To encourage economic development a country should do all of the following EXCEPT

Free trade is viewed as key to economic development because

New growth theory is concerned with

Labor productivity measures

Which of the following is TRUE?

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP)calculations account for this shortening of the average workweek?

According to the text, the relationship between economic growth and the degree of how closed an economy is

Which of the following is most likely to reduce the rate of economic growth?

Explain the relationship between economic growth and labor productivity.

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

There are a number of benefits that usually accompany economic growth. The following are such benefits EXCEPT

Per capita real GDP is a measure of

Which of the following factors are considered under "new growth theory"?

One of the implications of new growth theory is that economic growth arises from

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

To raise economic development, developing countries should

The historical record for the United States since 1900 shows

Giving up consumption today for consumption tomorrow accelerates economic growth by

Explain Paul Romer's ideas concerning economic growth.

It is likely that a small increase in a country's saving rate will have

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 8: Global Economic Growth and Development

To encourage economic development a country should do all of the following EXCEPT

Free trade is viewed as key to economic development because

New growth theory is concerned with

Labor productivity measures

Which of the following is TRUE?

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP)calculations account for this shortening of the average workweek?

According to the text, the relationship between economic growth and the degree of how closed an economy is

Which of the following is most likely to reduce the rate of economic growth?

Explain the relationship between economic growth and labor productivity.

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

There are a number of benefits that usually accompany economic growth. The following are such benefits EXCEPT

Per capita real GDP is a measure of

Which of the following factors are considered under "new growth theory"?

One of the implications of new growth theory is that economic growth arises from

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

To raise economic development, developing countries should

The historical record for the United States since 1900 shows

Giving up consumption today for consumption tomorrow accelerates economic growth by

Explain Paul Romer's ideas concerning economic growth.

It is likely that a small increase in a country's saving rate will have

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters