Question 1

Foreign residents can benefit from U.S. research and development activity because

Accepted Answer

A)  they ignore U.S. patent laws and steal the technology. 
B)  they can import the goods, obtaining inputs at lower cost than they would otherwise. 
C)  countries usually share patented ideas. 
D)  patents do a poor job of protecting the inventor. 
A)  they ignore U.S. patent laws and steal the technology. 
B)  they can import the goods, obtaining inputs at lower cost than they would otherwise. 
C)  countries usually share patented ideas. 
D)  patents do a poor job of protecting the inventor. B

Question 2

According to economist Paul Romer, economies that wish to experience growth must

Accepted Answer

A)  invest most of their savings in national defense. 
B)  invest in knowledge. 
C)  drastically lower their standards of living. 
D)  become command economies. 
A)  invest most of their savings in national defense. 
B)  invest in knowledge. 
C)  drastically lower their standards of living. 
D)  become command economies. B

Question 3

The reason that differences in economic growth rates are important in the long run is that

Accepted Answer

A)  growth compounds over time. 
B)  population naturally shrinks in most countries. 
C)  real GDP usually drops when adjusted for inflation. 
D)  nominal GDP typically increases faster than real GDP. 
A)  growth compounds over time. 
B)  population naturally shrinks in most countries. 
C)  real GDP usually drops when adjusted for inflation. 
D)  nominal GDP typically increases faster than real GDP. A

Question 4

For developing countries, one of the more effective ways to become more developed is

Accepted Answer

A)  to invest in secondary schools. 
B)  to invest more in the military. 
C)  to increase trade barriers. 
D)  to reduce direct foreign investment. 
A)  to invest in secondary schools. 
B)  to invest more in the military. 
C)  to increase trade barriers. 
D)  to reduce direct foreign investment.

Question 5

The reason that the government offers inventors exclusive rights to their product for a period of time is to

Accepted Answer

A)  reduce market concentration. 
B)  increase profits of certain companies. 
C)  maximize consumer utility. 
D)  promote innovation. 
A)  reduce market concentration. 
B)  increase profits of certain companies. 
C)  maximize consumer utility. 
D)  promote innovation.

Question 6

Labor productivity increases when

Accepted Answer

A)  the average number of hours people work goes up. 
B)  the unemployment rate decreases. 
C)  the average output produced per worker during a specified time period increases. 
D)  the average output produced per worker during a specified time period decreases. 
A)  the average number of hours people work goes up. 
B)  the unemployment rate decreases. 
C)  the average output produced per worker during a specified time period increases. 
D)  the average output produced per worker during a specified time period decreases.

Question 7

What are the shortcomings of using changes in per capita real GDP to measure economic growth?

Accepted Answer

GDP does not include all goods and servi

Question 8

Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?

Accepted Answer

A)  Countries with higher rates of entrepreneurship have higher rates of poverty. 
B)  Countries with higher rates of entrepreneurship have lower rates of immigration. 
C)  Countries with higher rates of entrepreneurship have lower rates of economic growth. 
D)  Countries that protect the property rights of entrepreneurs will have higher rates of economic growth. 
A)  Countries with higher rates of entrepreneurship have higher rates of poverty. 
B)  Countries with higher rates of entrepreneurship have lower rates of immigration. 
C)  Countries with higher rates of entrepreneurship have lower rates of economic growth. 
D)  Countries that protect the property rights of entrepreneurs will have higher rates of economic growth.

Question 9

All of the following are listed in the text as being keys to economic development EXCEPT

Accepted Answer

A)  a system of property rights. 
B)  an educated population. 
C)  an open economy. 
D)  a higher level of protectionism. 
A)  a system of property rights. 
B)  an educated population. 
C)  an open economy. 
D)  a higher level of protectionism.

Question 10

Entrepreneurship functions better when

Accepted Answer

A)  patent laws are not strongly enforced since they make imitation difficult. 
B)  government provides technical support to entrepreneurs. 
C)  a system of private property rights permits entrepreneurs to capture the rewards from their entrepreneurial activities. 
D)  universities provide research that is closely interrelated with the entrepreneurial activities. 
A)  patent laws are not strongly enforced since they make imitation difficult. 
B)  government provides technical support to entrepreneurs. 
C)  a system of private property rights permits entrepreneurs to capture the rewards from their entrepreneurial activities. 
D)  universities provide research that is closely interrelated with the entrepreneurial activities.

Question 11

If population growth is greater than the growth of real output,

Accepted Answer

A)  real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product (GDP). 
B)  the production possibilities curve is shifting to the left. 
C)  real per capita Gross Domestic Product (GDP) growth will be greater than the growth of real Gross Domestic Product (GDP). 
D)  real per capita Gross Domestic Product (GDP) and real Gross Domestic Product (GDP) will be growing at the same rate. 
A)  real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product (GDP). 
B)  the production possibilities curve is shifting to the left. 
C)  real per capita Gross Domestic Product (GDP) growth will be greater than the growth of real Gross Domestic Product (GDP). 
D)  real per capita Gross Domestic Product (GDP) and real Gross Domestic Product (GDP) will be growing at the same rate.

Question 12

In order for a nation to be able to consume more in the future, it needs to

Accepted Answer

A)  consume less today in aggregate and save the difference between consumption and income. 
B)  consume more today in aggregate and borrow the difference between consumption and income. 
C)  produce more today in aggregate and save the difference between consumption and production. 
D)  produce less today in aggregate and save the difference between consumption and income. 
A)  consume less today in aggregate and save the difference between consumption and income. 
B)  consume more today in aggregate and borrow the difference between consumption and income. 
C)  produce more today in aggregate and save the difference between consumption and production. 
D)  produce less today in aggregate and save the difference between consumption and income.

Question 13

According to the text, Ethiopia probably has a low per capita real Gross Domestic Product (GDP) because

Accepted Answer

A)  it has too many resources. 
B)  it has a corrupt government. 
C)  it has a low rate of saving. 
D)  there are too many skilled workers in the country. 
A)  it has too many resources. 
B)  it has a corrupt government. 
C)  it has a low rate of saving. 
D)  there are too many skilled workers in the country.

Question 14

Which one of the following is true?

Accepted Answer

A)  For every country that experiences an increase in its growth rate, there must be another experiencing a decline. 
B)  Small changes in the annual growth rate amount to a measurable difference in the long-term growth trend of a country. 
C)  Restricting imports will enhance a country's economic growth. 
D)  A well-defined system of property rights benefits only the wealthy, and consequently it produces income inequality that will stifle economic growth. 
A)  For every country that experiences an increase in its growth rate, there must be another experiencing a decline. 
B)  Small changes in the annual growth rate amount to a measurable difference in the long-term growth trend of a country. 
C)  Restricting imports will enhance a country's economic growth. 
D)  A well-defined system of property rights benefits only the wealthy, and consequently it produces income inequality that will stifle economic growth.

Question 15

According to the text, data supports the conclusion that lower trade barriers

Accepted Answer

A)  help boost per capita real Gross Domestic Product (GDP) growth. 
B)  help to increase welfare payments. 
C)  decrease the standard of living in the country. 
D)  decrease life expectancy. 
A)  help boost per capita real Gross Domestic Product (GDP) growth. 
B)  help to increase welfare payments. 
C)  decrease the standard of living in the country. 
D)  decrease life expectancy.

Question 16

The three stages of economic development include

Accepted Answer

A)  the agriculture stage, the manufacturing stage, and the service sector stage. 
B)  the computerized stage, the agriculture stage, and the manufacturing stage. 
C)  the feudal stage, the agriculture stage, and the totalitarian stage. 
D)  the agriculture stage, the manufacturing stage, and the socialist stage. 
A)  the agriculture stage, the manufacturing stage, and the service sector stage. 
B)  the computerized stage, the agriculture stage, and the manufacturing stage. 
C)  the feudal stage, the agriculture stage, and the totalitarian stage. 
D)  the agriculture stage, the manufacturing stage, and the socialist stage.

Question 17

Limiting protectionism means

Accepted Answer

A)  reducing trade barriers. 
B)  reducing corruption. 
C)  reducing consumer fraud. 
D)  reducing political dishonesty. 
A)  reducing trade barriers. 
B)  reducing corruption. 
C)  reducing consumer fraud. 
D)  reducing political dishonesty.

Question 18

Economists typically agree that the special protection given to owners of patents tends to

Accepted Answer

A)  reduce expenditures on research and development. 
B)  increase expenditures on research and development. 
C)  reduce economic growth. 
D)  reduce productivity. 
A)  reduce expenditures on research and development. 
B)  increase expenditures on research and development. 
C)  reduce economic growth. 
D)  reduce productivity.

Question 19

-Refer to the above table. Which country had the highest growth rate of real Gross Domestic Product (GDP) from 2012 to 2013?

Accepted Answer

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

Question 20

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.

Exam 9: Global Economic Growth and Development

Foreign residents can benefit from U.S. research and development activity because

According to economist Paul Romer, economies that wish to experience growth must

The reason that differences in economic growth rates are important in the long run is that

For developing countries, one of the more effective ways to become more developed is

The reason that the government offers inventors exclusive rights to their product for a period of time is to

Labor productivity increases when

What are the shortcomings of using changes in per capita real GDP to measure economic growth?

Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?

All of the following are listed in the text as being keys to economic development EXCEPT

Entrepreneurship functions better when

If population growth is greater than the growth of real output,

In order for a nation to be able to consume more in the future, it needs to

According to the text, Ethiopia probably has a low per capita real Gross Domestic Product (GDP) because

Which one of the following is true?

According to the text, data supports the conclusion that lower trade barriers

The three stages of economic development include

Limiting protectionism means

Economists typically agree that the special protection given to owners of patents tends to

-Refer to the above table. Which country had the highest growth rate of real Gross Domestic Product (GDP) from 2012 to 2013?

Economic growth may overstate changes in the standard of living if

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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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