Question 1

Does economic growth have any negative side effects?

Accepted Answer

A)  No. Every person in a nation experiencing economic growth will benefit. 
B)  No, because where negative side effects do occur, a nation's government is required to neutralize them. 
C)  Quite possibly. Some say economic growth puts people on a never-ending quest to satisfy newly created wants, so we always feel disappointed with our lives. 
D)  Yes, but only for the poorest segment of a nation's population. 
A)  No. Every person in a nation experiencing economic growth will benefit. 
B)  No, because where negative side effects do occur, a nation's government is required to neutralize them. 
C)  Quite possibly. Some say economic growth puts people on a never-ending quest to satisfy newly created wants, so we always feel disappointed with our lives. 
D)  Yes, but only for the poorest segment of a nation's population.

Question 2

When comparing across countries, the higher the rate of saving,

Accepted Answer

A)  the lower the level of per capita real Gross Domestic Product (GDP). 
B)  the higher the level of per capita real Gross Domestic Product (GDP). 
C)  the less industrialized the country. 
D)  the lower the productivity rates. 
A)  the lower the level of per capita real Gross Domestic Product (GDP). 
B)  the higher the level of per capita real Gross Domestic Product (GDP). 
C)  the less industrialized the country. 
D)  the lower the productivity rates.

Question 3

Economic growth is measured by

Accepted Answer

A)  increases in GDP. 
B)  increases in per capita real GDP. 
C)  increases in the population. 
D)  increases in the value of the total output of society. 
A)  increases in GDP. 
B)  increases in per capita real GDP. 
C)  increases in the population. 
D)  increases in the value of the total output of society.

Question 4

Which one of the following does NOT appear to contribute to economic growth?

Accepted Answer

A)  innovation 
B)  knowledge 
C)  protectionism 
D)  a system of well-defined property rights 
A)  innovation 
B)  knowledge 
C)  protectionism 
D)  a system of well-defined property rights

Question 5

Of the following nations, the country with the highest saving rate is

Accepted Answer

A)  the United States. 
B)  Japan. 
C)  Mexico. 
D)  Ethiopia. 
A)  the United States. 
B)  Japan. 
C)  Mexico. 
D)  Ethiopia.

Question 6

Firms are more likely to devote resources to research and development when

Accepted Answer

A)  the country is in recession. 
B)  they expect to earn rewards from successful research and development. 
C)  it is easy to copy new techniques of other firms. 
D)  the country has been experiencing slow economic growth in order to spur economic growth. 
A)  the country is in recession. 
B)  they expect to earn rewards from successful research and development. 
C)  it is easy to copy new techniques of other firms. 
D)  the country has been experiencing slow economic growth in order to spur economic growth.

Question 7

According to new growth theory, economic growth is driven by

Accepted Answer

A)  positive externalities. 
B)  the division of labor. 
C)  higher birth rates. 
D)  new ideas. 
A)  positive externalities. 
B)  the division of labor. 
C)  higher birth rates. 
D)  new ideas.

Question 8

All of the following are factors that raise economic development EXCEPT

Accepted Answer

A)  establishing a legal system. 
B)  an educated work force. 
C)  reducing trade barriers. 
D)  government control of the country's resources. 
A)  establishing a legal system. 
B)  an educated work force. 
C)  reducing trade barriers. 
D)  government control of the country's resources.

Question 9

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.

Question 10

New growth theory argues that

Accepted Answer

A)  growth is due to the proper government policies concerning interest rates. 
B)  growth relies on maintaining lower growth rates of population, especially in less developed countries. 
C)  technology cannot be looked at as an outside factor without an explanation of what drives it. 
D)  technology is the key factor that explains growth but technology is beyond economic explanation itself. 
A)  growth is due to the proper government policies concerning interest rates. 
B)  growth relies on maintaining lower growth rates of population, especially in less developed countries. 
C)  technology cannot be looked at as an outside factor without an explanation of what drives it. 
D)  technology is the key factor that explains growth but technology is beyond economic explanation itself.

Question 11

Explain the relationship between economic growth and labor productivity.

Accepted Answer

Economic growth equals the sum of the gr

Question 12

When analyzing stages of economic development in the United States, it appears that we have entered the "tertiary stage." This is a stage marked by a shift toward

Accepted Answer

A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  population increases. 
A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  population increases.

Question 13

The new growth theory examines the role of

Accepted Answer

A)  technology in economic growth. 
B)  natural resources in economic growth. 
C)  exports in economic growth. 
D)  government in economic growth. 
A)  technology in economic growth. 
B)  natural resources in economic growth. 
C)  exports in economic growth. 
D)  government in economic growth.

Question 14

According to the new growth theory, economic growth will continue with

Accepted Answer

A)  the development of new ideas. 
B)  increases in population growth. 
C)  increases in interest rates. 
D)  an increased focus on labor-intensive jobs. 
A)  the development of new ideas. 
B)  increases in population growth. 
C)  increases in interest rates. 
D)  an increased focus on labor-intensive jobs.

Question 15

A good estimate of the world's population that lives on less than an inflation-adjusted$1.5 per day is

Accepted Answer

A)  20 percent. 
B)  40 percent. 
C)  50 percent. 
D)  80 percent. 
A)  20 percent. 
B)  40 percent. 
C)  50 percent. 
D)  80 percent.

Question 16

Which one of the following is true?

Accepted Answer

A)  Saving deters economic growth, because it takes money out of circulation. 
B)  Saving enables economic growth by providing for investment in the capital stock. 
C)  International comparisons have found no relationship between the rate of saving and the level of per capita real GDP. 
D)  Economies with sophisticated credit markets, such as the United States, have no need for saving. 
A)  Saving deters economic growth, because it takes money out of circulation. 
B)  Saving enables economic growth by providing for investment in the capital stock. 
C)  International comparisons have found no relationship between the rate of saving and the level of per capita real GDP. 
D)  Economies with sophisticated credit markets, such as the United States, have no need for saving.

Question 17

-Refer to the above table. How long would it take for a country to triple its GDP if the GDP grew at a 20 percent rate?

Accepted Answer

A)  2 years 
B)  4 years 
C)  6 years 
D)  10 years 
A)  2 years 
B)  4 years 
C)  6 years 
D)  10 years

Question 18

Costs associated with economic growth include all of the following EXCEPT

Accepted Answer

A)  environmental pollution. 
B)  psychological problems such as depression. 
C)  urban congestion. 
D)  improved health care. 
A)  environmental pollution. 
B)  psychological problems such as depression. 
C)  urban congestion. 
D)  improved health care.

Question 19

Real standards of living can increase

Accepted Answer

A)  if the country is producing the same amount they traditionally have and are enjoying more leisure time. 
B)  only if there is positive economic growth. 
C)  if there is positive growth in the manufacturing sector. 
D)  only at the cost of increased urban congestion. 
A)  if the country is producing the same amount they traditionally have and are enjoying more leisure time. 
B)  only if there is positive economic growth. 
C)  if there is positive growth in the manufacturing sector. 
D)  only at the cost of increased urban congestion.

Question 20

Which of the following does free trade encourage?

Accepted Answer

A)  More rapid spread of technology 
B)  Higher rates of economic growth 
C)  Domestic industries' access to larger markets 
D)  All of the above 
A)  More rapid spread of technology 
B)  Higher rates of economic growth 
C)  Domestic industries' access to larger markets 
D)  All of the above

Exam 9: Global Economic Growth and Development

Does economic growth have any negative side effects?

When comparing across countries, the higher the rate of saving,

Economic growth is measured by

Which one of the following does NOT appear to contribute to economic growth?

Of the following nations, the country with the highest saving rate is

Firms are more likely to devote resources to research and development when

According to new growth theory, economic growth is driven by

All of the following are factors that raise economic development EXCEPT

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

New growth theory argues that

Explain the relationship between economic growth and labor productivity.

When analyzing stages of economic development in the United States, it appears that we have entered the "tertiary stage." This is a stage marked by a shift toward

The new growth theory examines the role of

According to the new growth theory, economic growth will continue with

A good estimate of the world's population that lives on less than an inflation-adjusted$1.5 per day is

Which one of the following is true?

-Refer to the above table. How long would it take for a country to triple its GDP if the GDP grew at a 20 percent rate?

Costs associated with economic growth include all of the following EXCEPT

Real standards of living can increase

Which of the following does free trade encourage?

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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