Question 1

Entrepreneurship functions better when

Accepted Answer

A)  the government performs the entrepreneurial function. 
B)  there is a well-defined property rights system. 
C)  saving is relatively low. 
D)  most of the population has low levels of education. 
A)  the government performs the entrepreneurial function. 
B)  there is a well-defined property rights system. 
C)  saving is relatively low. 
D)  most of the population has low levels of education.

Question 2

Why are economic growth and saving related?

Accepted Answer

To consume more in the future

Question 3

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 4

A patent is a government protection that gives

Accepted Answer

A)  consumers the right to sue when products are unsafe. 
B)  inventors exclusive rights to their product for a time. 
C)  monopolies the right to be sole producers due to economies of scale. 
D)  companies the right to produce any good they choose. 
A)  consumers the right to sue when products are unsafe. 
B)  inventors exclusive rights to their product for a time. 
C)  monopolies the right to be sole producers due to economies of scale. 
D)  companies the right to produce any good they choose.

Question 5

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 6

Economic growth can be depicted as

Accepted Answer

A)  a movement up on the production possibilities curve. 
B)  a movement down on the production possibilities curve. 
C)  an outward shift on the production possibilities curve. 
D)  an inward shift on the production possibilities curve. 
A)  a movement up on the production possibilities curve. 
B)  a movement down on the production possibilities curve. 
C)  an outward shift on the production possibilities curve. 
D)  an inward shift on the production possibilities curve.

Question 7

Which of the following do development economists NOT recommend to nations seeking to increase their rates of economic growth?

Accepted Answer

A)  protecting home producers from international competition 
B)  letting creative destruction run its course 
C)  promoting increased education 
D)  promoting private property rights 
A)  protecting home producers from international competition 
B)  letting creative destruction run its course 
C)  promoting increased education 
D)  promoting private property rights

Question 8

Economic growth depends on

Accepted Answer

A)  low tax rates. 
B)  high government spending. 
C)  high rates of consumption. 
D)  increases in the capital stock as a result of saving. 
A)  low tax rates. 
B)  high government spending. 
C)  high rates of consumption. 
D)  increases in the capital stock as a result of saving.

Question 9

The formula for the computation of labor productivity is

Accepted Answer

A)  real GDP/population. 
B)  real GDP/number of workers. 
C)  nominal GDP/population. 
D)  nominal GDP/number of workers. 
A)  real GDP/population. 
B)  real GDP/number of workers. 
C)  nominal GDP/population. 
D)  nominal GDP/number of workers.

Question 10

Is it possible to see gains in a nation's real standard of living without any positive economic growth?

Accepted Answer

A)  No. Without economic growth a nation's standard of living cannot improve. 
B)  Yes, but only if the government prints more money so people feel wealthier. 
C)  Yes. If workers can produce the same level of output in fewer work hours, leisure time gains could push up the real standard of living. 
D)  None of the above. 
A)  No. Without economic growth a nation's standard of living cannot improve. 
B)  Yes, but only if the government prints more money so people feel wealthier. 
C)  Yes. If workers can produce the same level of output in fewer work hours, leisure time gains could push up the real standard of living. 
D)  None of the above.

Question 11

If all income is consumed in a year, then

Accepted Answer

A)  investment spending will increase. 
B)  income next year will increase. 
C)  investment spending will be zero. 
D)  any investment spending will be done by the government. 
A)  investment spending will increase. 
B)  income next year will increase. 
C)  investment spending will be zero. 
D)  any investment spending will be done by the government.

Question 12

A patent is

Accepted Answer

A)  a government protection that gives an inventor the exclusive right to the invention for a limited time period. 
B)  a government protection that gives an inventor the exclusive right to the invention for an unlimited time period. 
C)  the right to make a product and sell it at a reasonable price. 
D)  a recognizable right to the profits associated with a new product or new way of making goods granted by business associations. 
A)  a government protection that gives an inventor the exclusive right to the invention for a limited time period. 
B)  a government protection that gives an inventor the exclusive right to the invention for an unlimited time period. 
C)  the right to make a product and sell it at a reasonable price. 
D)  a recognizable right to the profits associated with a new product or new way of making goods granted by business associations.

Question 13

-Refer to the above table. Which country had the largest increase in per capita real GDP between 2012 and 2013?

Accepted Answer

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

Question 14

The study of development economics is to understand

Accepted Answer

A)  why some products are successful in the market as soon as they are developed, whereas others do not catch on for years. 
B)  why most of the patents on record have been given to men rather than to women. 
C)  why some countries are rich and others are poor. 
D)  the personality factors that lead people to become entrepreneurs. 
A)  why some products are successful in the market as soon as they are developed, whereas others do not catch on for years. 
B)  why most of the patents on record have been given to men rather than to women. 
C)  why some countries are rich and others are poor. 
D)  the personality factors that lead people to become entrepreneurs.

Question 15

A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

Accepted Answer

A)  an innovation. 
B)  a copyright. 
C)  a patent. 
D)  a trademark. 
A)  an innovation. 
B)  a copyright. 
C)  a patent. 
D)  a trademark.

Question 16

Research indicates that

Accepted Answer

A)  countries with lower tariff rates experience higher rates of economic growth. 
B)  countries with lower tariff rates experience lower rates of economic growth. 
C)  there is no relationship between the level of tariff rates and economic growth. 
D)  countries with higher tariff rates experience higher rates of economic growth. 
A)  countries with lower tariff rates experience higher rates of economic growth. 
B)  countries with lower tariff rates experience lower rates of economic growth. 
C)  there is no relationship between the level of tariff rates and economic growth. 
D)  countries with higher tariff rates experience higher rates of economic growth.

Question 17

Of the following, which best explains why Thomas Malthus was incorrect in his prediction that population would outstrip food supplies?

Accepted Answer

A)  Malthus failed to realize that that human population would increase considerably. 
B)  Malthus failed to recognize that economic growth is accompanied by smaller family sizes. 
C)  Malthus incorrectly believed that economic growth would reduce birthrates. 
D)  Malthus incorrectly predicted that modernization would increase the demand for children. 
A)  Malthus failed to realize that that human population would increase considerably. 
B)  Malthus failed to recognize that economic growth is accompanied by smaller family sizes. 
C)  Malthus incorrectly believed that economic growth would reduce birthrates. 
D)  Malthus incorrectly predicted that modernization would increase the demand for children.

Question 18

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 19

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 20

In order to be able to consume more in the future, you have to consume

Accepted Answer

A)  less today and save the difference. 
B)  more today to increase supply. 
C)  more consumer goods. 
D)  fewer capital goods. 
A)  less today and save the difference. 
B)  more today to increase supply. 
C)  more consumer goods. 
D)  fewer capital goods.

Exam 9: Global Economic Growth and Development

Entrepreneurship functions better when

Why are economic growth and saving related?

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

A patent is a government protection that gives

To raise economic development, developing countries should

Economic growth can be depicted as

Which of the following do development economists NOT recommend to nations seeking to increase their rates of economic growth?

Economic growth depends on

The formula for the computation of labor productivity is

Is it possible to see gains in a nation's real standard of living without any positive economic growth?

If all income is consumed in a year, then

A patent is

-Refer to the above table. Which country had the largest increase in per capita real GDP between 2012 and 2013?

The study of development economics is to understand

A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

Research indicates that

Of the following, which best explains why Thomas Malthus was incorrect in his prediction that population would outstrip food supplies?

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

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

In order to be able to consume more in the future, you have to consume

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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