Question 1

Which of the following best represents economic growth?

Accepted Answer

A) a movement down a given production possibilities curve. 
B) a movement up a given production possibilities curve. 
C) an outward or, equivalently, a rightward shift of the production possibilities curve. 
D) an inward or, equivalently, leftward shift of the production possibilities curve. 
A) a movement down a given production possibilities curve. 
B) a movement up a given production possibilities curve. 
C) an outward or, equivalently, a rightward shift of the production possibilities curve. 
D) an inward or, equivalently, leftward shift of the production possibilities curve.

Question 2

Economic growth may overstate changes in the standard of living if

Accepted Answer

A) people are retiring at a younger age. 
B) the average workweek is increasing. 
C) the number of students attending college is increasing. 
D) expected life spans are increasing. 
A) people are retiring at a younger age. 
B) the average workweek is increasing. 
C) the number of students attending college is increasing. 
D) expected life spans are increasing.

Question 3

The new growth theory of economic growth examines the interaction of

Accepted Answer

A) labor and population. 
B) regulations and capital expansion. 
C) resources and labor productivity. 
D) technology, research, and innovation. 
A) labor and population. 
B) regulations and capital expansion. 
C) resources and labor productivity. 
D) technology, research, and innovation.

Question 4

Using a production possibilities curve, economic growth is represented by

Accepted Answer

A) an outward shift in the curve. 
B) a movement along the curve. 
C) an inward shift of the curve. 
D) a pivot of the curve. 
A) an outward shift in the curve. 
B) a movement along the curve. 
C) an inward shift of the curve. 
D) a pivot of the curve.

Question 5

An example of a cost of economic growth is

Accepted Answer

A) longer life spans. 
B) political instability. 
C) alienation. 
D) increases in illiteracy. 
A) longer life spans. 
B) political instability. 
C) alienation. 
D) increases in illiteracy.

Question 6

Which of the following is a TRUE statement?

Accepted Answer

A) The most important sources of economic growth are the quantity and quality of the land and other natural resources a country controls. 
B) The most important source of economic growth is the rate of population growth since a growing population stimulates demand for goods and services, and provides the labor to produce the goods and services. 
C) The most important sources of economic growth are the new ideas generated by entrepreneurs in an economic system that permits them to capture the rewards of their entrepreneurial activities. 
D) The most important source of economic growth is the extent to which the government directly enters into decisions where research and development activities should be directed and who should be involved in research and development activity. 
A) The most important sources of economic growth are the quantity and quality of the land and other natural resources a country controls. 
B) The most important source of economic growth is the rate of population growth since a growing population stimulates demand for goods and services, and provides the labor to produce the goods and services. 
C) The most important sources of economic growth are the new ideas generated by entrepreneurs in an economic system that permits them to capture the rewards of their entrepreneurial activities. 
D) The most important source of economic growth is the extent to which the government directly enters into decisions where research and development activities should be directed and who should be involved in research and development activity.

Question 7

What can be expected to happen in a country that enacts trade barriers?

Accepted Answer

A) The rate of immigration will increase. 
B) The rate of technological innovation will increase. 
C) The rate of economic growth will decrease. 
D) The rate of population growth will decrease. 
A) The rate of immigration will increase. 
B) The rate of technological innovation will increase. 
C) The rate of economic growth will decrease. 
D) The rate of population growth will decrease.

Question 8

The reason that patents are granted is

Accepted Answer

A) to encourage a high rate of consumption. 
B) to protect new techniques developed through research and development. 
C) to encourage free trade. 
D) to increase the labor force. 
A) to encourage a high rate of consumption. 
B) to protect new techniques developed through research and development. 
C) to encourage free trade. 
D) to increase the labor force.

Question 9

How does innovation differ from invention?
 Why is innovation required for economic growth?

Accepted Answer

Innovation involves the transformation o

Question 10

Which of the following factors would economists consider "key" to economic development?

Accepted Answer

A) expansionary monetary policy 
B) establishing a system of property rights 
C) policies that promote consumption expenditures by households 
D) All of the above are correct. 
A) expansionary monetary policy 
B) establishing a system of property rights 
C) policies that promote consumption expenditures by households 
D) All of the above are correct.

Question 11

Which of the following variables can be used to measure labor productivity?

Accepted Answer

A) real GDP 
B) number of workers 
C) number of labor hours 
D) all of the above 
A) real GDP 
B) number of workers 
C) number of labor hours 
D) all of the above

Question 12

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Accepted Answer

A) plentiful natural resources 
B) openness to international trade 
C) an educated population 
D) All of the above are correct. 
A) plentiful natural resources 
B) openness to international trade 
C) an educated population 
D) All of the above are correct.

Question 13

Of the following views on the effects of immigration on the receiving nation's economic growth, which have NOT been suggested by economists Michael Kremer and Julian Simon?

Accepted Answer

A) Technological progress is driven by population growth. 
B) Immigrants raise the standard of living of a nation's native population. 
C) Immigration increases a nation's labor pool and encourages ingenuity. 
D) Immigration costs the local population jobs and greatly lowers their incomes. 
A) Technological progress is driven by population growth. 
B) Immigrants raise the standard of living of a nation's native population. 
C) Immigration increases a nation's labor pool and encourages ingenuity. 
D) Immigration costs the local population jobs and greatly lowers their incomes.

Question 14

Which of the following is NOT a stage of development that modern rich nations have gone through?

Accepted Answer

A) service stage 
B) agricultural stage 
C) manufacturing stage 
D) inflation stage 
A) service stage 
B) agricultural stage 
C) manufacturing stage 
D) inflation stage

Question 15

A system of private property rights

Accepted Answer

A) encourages economic growth by creating incentives to invest in capital and to be innovative. 
B) discourages economic growth by discouraging the development of new ideas and ways of doing things. 
C) reduces the efficiency of government, which reduces the growth rate of the economy over time. 
D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain. 
A) encourages economic growth by creating incentives to invest in capital and to be innovative. 
B) discourages economic growth by discouraging the development of new ideas and ways of doing things. 
C) reduces the efficiency of government, which reduces the growth rate of the economy over time. 
D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.

Question 16

The transformation of an invention into something that benefits the economy is known as

Accepted Answer

A) an innovation. 
B) a patent. 
C) an externality. 
D) a compounder. 
A) an innovation. 
B) a patent. 
C) an externality. 
D) a compounder.

Question 17

Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer

Accepted Answer

A) argues that an investment-knowledge cycle allows a once-and-for-all increase in investment to permanently raise a country's growth rate, while traditional theory argues that a once-and-for-all increase in investment leads to a higher standard of living but not to a higher growth rate. 
B) argues, that investment is not important in promoting growth, but that the acquisition of knowledge is the sole determinant of economic growth. 
C) argues, that an investment-knowledge cycle exists which requires that investment rates keep increasing or else growth rates will fall, while traditional theory argues that growth rates will not fall, although they will not increase either. 
D) emphasizes investment rates while traditional theory emphasizes the importance of knowledge as a factor of production. 
A) argues that an investment-knowledge cycle allows a once-and-for-all increase in investment to permanently raise a country's growth rate, while traditional theory argues that a once-and-for-all increase in investment leads to a higher standard of living but not to a higher growth rate. 
B) argues, that investment is not important in promoting growth, but that the acquisition of knowledge is the sole determinant of economic growth. 
C) argues, that an investment-knowledge cycle exists which requires that investment rates keep increasing or else growth rates will fall, while traditional theory argues that growth rates will not fall, although they will not increase either. 
D) emphasizes investment rates while traditional theory emphasizes the importance of knowledge as a factor of production.

Question 18

Which one of the following describes the current state of economic development in the United States?

Accepted Answer

A) The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B) Employment is declining in the manufacturing sector and growing in the service sector. 
C) Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D) The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace. 
A) The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B) Employment is declining in the manufacturing sector and growing in the service sector. 
C) Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D) The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace.

Question 19

Economists have found that as a nation's per capita real Gross Domestic Product (GDP)increases

Accepted Answer

A) the rate of population growth declines. 
B) the rate of population growth experiences dramatic increases. 
C) there is no effect on population growth. 
D) the rate of population growth increases at the same rate as economic growth. 
A) the rate of population growth declines. 
B) the rate of population growth experiences dramatic increases. 
C) there is no effect on population growth. 
D) the rate of population growth increases at the same rate as economic growth.

Question 20

Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?

Accepted Answer

A) because the faster-growing countries gain a political advantage over poorer countries, and use that advantage for their economic gain 
B) because the annual growth rate is compounded over time 
C) because the slower-growing countries save too much 
D) because the slower-growing countries don't export enough 
A) because the faster-growing countries gain a political advantage over poorer countries, and use that advantage for their economic gain 
B) because the annual growth rate is compounded over time 
C) because the slower-growing countries save too much 
D) because the slower-growing countries don't export enough

Which of the following best represents economic growth?

Economic growth may overstate changes in the standard of living if

The new growth theory of economic growth examines the interaction of

Using a production possibilities curve, economic growth is represented by

An example of a cost of economic growth is

Which of the following is a TRUE statement?

What can be expected to happen in a country that enacts trade barriers?

The reason that patents are granted is

How does innovation differ from invention? Why is innovation required for economic growth?

Which of the following factors would economists consider "key" to economic development?

Which of the following variables can be used to measure labor productivity?

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Of the following views on the effects of immigration on the receiving nation's economic growth, which have NOT been suggested by economists Michael Kremer and Julian Simon?

Which of the following is NOT a stage of development that modern rich nations have gone through?

A system of private property rights

The transformation of an invention into something that benefits the economy is known as

Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer

Which one of the following describes the current state of economic development in the United States?

Economists have found that as a nation's per capita real Gross Domestic Product (GDP)increases

Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?

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

Exam 8: Global Economic Growth and Development

Which of the following best represents economic growth?

Economic growth may overstate changes in the standard of living if

The new growth theory of economic growth examines the interaction of

Using a production possibilities curve, economic growth is represented by

An example of a cost of economic growth is

Which of the following is a TRUE statement?

What can be expected to happen in a country that enacts trade barriers?

The reason that patents are granted is

How does innovation differ from invention? Why is innovation required for economic growth?

Which of the following factors would economists consider "key" to economic development?

Which of the following variables can be used to measure labor productivity?

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Of the following views on the effects of immigration on the receiving nation's economic growth, which have NOT been suggested by economists Michael Kremer and Julian Simon?

Which of the following is NOT a stage of development that modern rich nations have gone through?

A system of private property rights

The transformation of an invention into something that benefits the economy is known as

Paul Romer's theory on the importance of knowledge differs from traditional theory in that Romer

Which one of the following describes the current state of economic development in the United States?

Economists have found that as a nation's per capita real Gross Domestic Product (GDP)increases

Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?

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