Question 1

In order for Ethiopia to increase its future economic growth,it must choose a point that is

Accepted Answer

A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve. 
A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve. B

Question 2

When a nation's political environment is more favorable,it will:

Accepted Answer

A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of the above. 
A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of the above. D

Question 3

Which of the following is infrastructure?

Accepted Answer

A)  Police. 
B)  Training and education. 
C)  Highways. 
D)  All of the above. 
E)  None of the above. 
A)  Police. 
B)  Training and education. 
C)  Highways. 
D)  All of the above. 
E)  None of the above. C

Question 4

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Accepted Answer

A)  Higher tax rates. 
B)  A higher rate of investment. 
C)  A smaller trade sector. 
D)  Greater use of taxation to transfer income from the rich to the poor. 
A)  Higher tax rates. 
B)  A higher rate of investment. 
C)  A smaller trade sector. 
D)  Greater use of taxation to transfer income from the rich to the poor.

Question 5

Suppose Embryonica is an LDC with few skilled workers,a primitive banking system,and very little electric power.What do we know for sure that Embryonica is lacking?

Accepted Answer

A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty. 
A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty.

Question 6

If an economy's population grows at 3 percent and GDP grows at 4 percent,then:

Accepted Answer

A)  per capita real GDP is declining. 
B)  the economy's standard of living is decreasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment. 
A)  per capita real GDP is declining. 
B)  the economy's standard of living is decreasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment.

Question 7

A country with a high GDP per capita can be classified as an industrially advanced country (IAC)regardless of its industrial development.

Accepted Answer

A) True 
 B)False

Question 8

In general,GDP per capita is not highly correlated with alternative measures of quality of life.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a true statement?

Accepted Answer

A)  The LDC classification is of the questionable accuracy. 
B)  GDP per capita ignores the degree of income distribution. 
C)  GDP per capita is affected by exchange rate changes. 
D)  GDP per capita does not account for the difference in the cost of living among nations. 
E)  All of the above are true. 
A)  The LDC classification is of the questionable accuracy. 
B)  GDP per capita ignores the degree of income distribution. 
C)  GDP per capita is affected by exchange rate changes. 
D)  GDP per capita does not account for the difference in the cost of living among nations. 
E)  All of the above are true.

Question 10

"Countries are poor because they cannot afford to save and invest" is called the:

Accepted Answer

A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit. 
A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit.

Question 11

Which of the following is infrastructure?

Accepted Answer

A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of the above. 
A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of the above.

Question 12

If real GDP is increasing more rapidly than population:

Accepted Answer

A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing. 
A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing.

Question 13

To grow and prosper,less-developed countries must not:

Accepted Answer

A)  invest in human capital. 
B)  build a strong infrastructure. 
C)  shift resources out of the production of consumer goods and into the production of capital goods. 
D)  shift resources out of the production of capital goods and into the production of consumer goods 
E)  improve the quality of the water supply 
A)  invest in human capital. 
B)  build a strong infrastructure. 
C)  shift resources out of the production of consumer goods and into the production of capital goods. 
D)  shift resources out of the production of capital goods and into the production of consumer goods 
E)  improve the quality of the water supply

Question 14

Which of the following characterizes the IACs?

Accepted Answer

A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment. 
A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment.

Question 15

There is a direct link between a nation's per capita real GDP and its:

Accepted Answer

A) c and e. 
B) c,d,and e. 
C) human capital investment. 
D) population. 
E) life expectancy. 
A) c and e. 
B) c,d,and e. 
C) human capital investment. 
D) population. 
E) life expectancy.

Question 16

Which of the following is correct?

Accepted Answer

A)  Economic development is more quantitative than economic growth. 
B)  A country cannot achieve economic growth with a limited base of natural resources. 
C)  Infrastructure is capital provide by the private sector. 
D)  All of the above are true. 
E)  All of the above are false. 
A)  Economic development is more quantitative than economic growth. 
B)  A country cannot achieve economic growth with a limited base of natural resources. 
C)  Infrastructure is capital provide by the private sector. 
D)  All of the above are true. 
E)  All of the above are false.

Question 17

If an economy's population grows at 3 percent and real GDP grows at 2 percent,then:

Accepted Answer

A)  per capita real GDP is declining. 
B)  the economy's standard of living is increasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment. 
A)  per capita real GDP is declining. 
B)  the economy's standard of living is increasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment.

Question 18

According to the text,Singapore is classified as a less developed country (LDC).

Accepted Answer

A) True 
 B)False

Question 19

Investment in both physical and human capital enhances economic growth because it:

Accepted Answer

A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages. 
A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages.

Question 20

A nation's infrastructure includes all of the following except its:

Accepted Answer

A)  market system. 
B)  educational system. 
C)  energy system. 
D)  railroad system. 
E)  religious system. 
A)  market system. 
B)  educational system. 
C)  energy system. 
D)  railroad system. 
E)  religious system.

Exam 23: Growth and the Less-Developed Countries

In order for Ethiopia to increase its future economic growth,it must choose a point that is

When a nation's political environment is more favorable,it will:

Which of the following is infrastructure?

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Suppose Embryonica is an LDC with few skilled workers,a primitive banking system,and very little electric power.What do we know for sure that Embryonica is lacking?

If an economy's population grows at 3 percent and GDP grows at 4 percent,then:

A country with a high GDP per capita can be classified as an industrially advanced country (IAC)regardless of its industrial development.

In general,GDP per capita is not highly correlated with alternative measures of quality of life.

Which of the following is a true statement?

"Countries are poor because they cannot afford to save and invest" is called the:

Which of the following is infrastructure?

If real GDP is increasing more rapidly than population:

To grow and prosper,less-developed countries must not:

Which of the following characterizes the IACs?

There is a direct link between a nation's per capita real GDP and its:

Which of the following is correct?

If an economy's population grows at 3 percent and real GDP grows at 2 percent,then:

According to the text,Singapore is classified as a less developed country (LDC).

Investment in both physical and human capital enhances economic growth because it:

A nation's infrastructure includes all of the following except its:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

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