Question 1

Which of the following nations has experienced the highest average annual rate of growth of per capita real GDP since 1990?

Accepted Answer

A)  India 
B)  United States 
C)  China 
D)  Germany 
A)  India 
B)  United States 
C)  China 
D)  Germany

Question 2

Improvements in labor productivity

Accepted Answer

A)  affect the level of wages, but do not affect the rate of economic growth. 
B)  affect the level of profit, but do not affect the rate of economic growth. 
C)  hinder economic growth, because they cause unemployment. 
D)  contribute to economic growth. 
A)  affect the level of wages, but do not affect the rate of economic growth. 
B)  affect the level of profit, but do not affect the rate of economic growth. 
C)  hinder economic growth, because they cause unemployment. 
D)  contribute to economic growth.

Question 3

Traditionally, economists regarded improvements in technology as

Accepted Answer

A)  the most important factor that helped explain economic growth, and basically the only factor that would cause economic growth. 
B)  an outside factor that helped explain economic growth. 
C)  an important factor in explaining economic growth that was due to economic forces that also could easily be explained. 
D)  unrelated to economic growth in any systematic way. 
A)  the most important factor that helped explain economic growth, and basically the only factor that would cause economic growth. 
B)  an outside factor that helped explain economic growth. 
C)  an important factor in explaining economic growth that was due to economic forces that also could easily be explained. 
D)  unrelated to economic growth in any systematic way.

Question 4

Which of the following is an obstacle to economic development?

Accepted Answer

A)  poorly defined property rights 
B)  foreign direct investment 
C)  immigration 
D)  openness to trade 
A)  poorly defined property rights 
B)  foreign direct investment 
C)  immigration 
D)  openness to trade

Question 5

Which of the following variables is used to measure economic growth?

Accepted Answer

A)  nominal GDP 
B)  nominal GDP per capita 
C)  real GDP 
D)  real GDP per capita 
A)  nominal GDP 
B)  nominal GDP per capita 
C)  real GDP 
D)  real GDP per capita

Question 6

Which of the following is NOT an obstacle to economic development?

Accepted Answer

A)  lack of entrepreneurship 
B)  political instability 
C)  corruption 
D)  a central bank 
A)  lack of entrepreneurship 
B)  political instability 
C)  corruption 
D)  a central bank

Question 7

Labor productivity is commonly measured as

Accepted Answer

A)  the number of workers divided by real GDP. 
B)  the change in real GDP divided by change in number of workers. 
C)  nominal GDP divided by number of workers. 
D)  real GDP divided by number of workers. 
A)  the number of workers divided by real GDP. 
B)  the change in real GDP divided by change in number of workers. 
C)  nominal GDP divided by number of workers. 
D)  real GDP divided by number of workers.

Question 8

The term "economic" growth refers to increases in

Accepted Answer

A)  resources use. 
B)  nominal income. 
C)  satisfaction. 
D)  productive capacity. 
A)  resources use. 
B)  nominal income. 
C)  satisfaction. 
D)  productive capacity.

Question 9

Economic growth is usually defined as

Accepted Answer

A)  the rate of increase in output divided by the increase in labor. 
B)  the increase in output over time, as measured by real per capita Gross Domestic Product (GDP). 
C)  the increase in input availability. 
D)  the reduction in the real cost of necessities. 
A)  the rate of increase in output divided by the increase in labor. 
B)  the increase in output over time, as measured by real per capita Gross Domestic Product (GDP). 
C)  the increase in input availability. 
D)  the reduction in the real cost of necessities.

Question 10

The per capita GDP for Hungary in 2011 was $12,000 and in 2012 was $12,360. How much did the economy grow in 2012?

Accepted Answer

A)  97 percent 
B)  3 percent 
C)  2 percent 
D)  1 percent 
A)  97 percent 
B)  3 percent 
C)  2 percent 
D)  1 percent

Question 11

An outward shift of the production possibilities curve represents

Accepted Answer

A)  economic contraction. 
B)  economic growth. 
C)  economic recession. 
D)  economic inflation. 
A)  economic contraction. 
B)  economic growth. 
C)  economic recession. 
D)  economic inflation.

Question 12

Higher saving rates mean higher future growth rates because

Accepted Answer

A)  the interest earned from savings gives you more wealth. 
B)  the banks have more money to distribute to their shareholders. 
C)  saving contributes to less investment, which yields a larger capital stock. 
D)  saving contributes to more investment, which yields a larger capital stock. 
A)  the interest earned from savings gives you more wealth. 
B)  the banks have more money to distribute to their shareholders. 
C)  saving contributes to less investment, which yields a larger capital stock. 
D)  saving contributes to more investment, which yields a larger capital stock.

Question 13

Suppose two countries have per capita real GDP of $20,000 in 2010. Country A has a growth rate of 4 percent and Country B has a growth rate of 5 percent. By 2013, the per capita real GDPs for the two countries, respectively, are (rounded)

Accepted Answer

A)  $21,630 and $22,050. 
B)  $22,400 and $23,000. 
C)  $22,500 and $23,150. 
D)  $25,000 and $26,500. 
A)  $21,630 and $22,050. 
B)  $22,400 and $23,000. 
C)  $22,500 and $23,150. 
D)  $25,000 and $26,500.

Question 14

According to your text, which of the following countries currently has the highest annual per capita Gross Domestic Product (GDP) growth rate?

Accepted Answer

A)  China 
B)  Japan 
C)  Germany 
D)  United States 
A)  China 
B)  Japan 
C)  Germany 
D)  United States

Question 15

What is the real GDP after four years if Country X's average annual growth rate is 8.6 percent and the initial real GDP was $2,756.0 million?

Accepted Answer

A)  $2,993.0 million 
B)  $3,833.5 million 
C)  $1,077.5 million 
D)  $3,250.4 million 
A)  $2,993.0 million 
B)  $3,833.5 million 
C)  $1,077.5 million 
D)  $3,250.4 million

Question 16

Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that

Accepted Answer

A)  life expectancies are the same in both countries. 
B)  economic well being is the same in both countries. 
C)  living standards may differ in the two countries because we don't know how income is distributed in the countries. 
D)  living standards in the two countries are probably identical, or very close to each other. 
A)  life expectancies are the same in both countries. 
B)  economic well being is the same in both countries. 
C)  living standards may differ in the two countries because we don't know how income is distributed in the countries. 
D)  living standards in the two countries are probably identical, or very close to each other.

Question 17

Many countries find it difficult to achieve economic growth. This is because economic growth

Accepted Answer

A)  is not understood well by economists, so it is difficult to advise policy makers on the best policies to pursue. 
B)  requires saving, and saving means less consumption today. A poor country may find it difficult to consume less today. 
C)  appears to be predetermined and not subject to factors that policy makers can have any affect on. 
D)  depends on technological change and technological change depends on noneconomic factors such as the growth rate of scientific knowledge. 
A)  is not understood well by economists, so it is difficult to advise policy makers on the best policies to pursue. 
B)  requires saving, and saving means less consumption today. A poor country may find it difficult to consume less today. 
C)  appears to be predetermined and not subject to factors that policy makers can have any affect on. 
D)  depends on technological change and technological change depends on noneconomic factors such as the growth rate of scientific knowledge.

Question 18

A change in the growth rate of a country of one percentage point annually has

Accepted Answer

A)  very little impact on the economy of a country. 
B)  a large impact in the future due to compounding. 
C)  a small impact in the current year, and smaller impact in the future because of compounding. 
D)  a large impact on the economy in the current year, but not in the future. 
A)  very little impact on the economy of a country. 
B)  a large impact in the future due to compounding. 
C)  a small impact in the current year, and smaller impact in the future because of compounding. 
D)  a large impact on the economy in the current year, but not in the future.

Question 19

Free trade

Accepted Answer

A)  hurts economic growth because foreigners are not bound by the same patent laws as we are. 
B)  helps economic growth by encouraging the sharing of technology and industrial ideas. 
C)  hurts economic growth because foreign countries can produce goods with lower labor costs. 
D)  helps economic growth by increasing tariffs. 
A)  hurts economic growth because foreigners are not bound by the same patent laws as we are. 
B)  helps economic growth by encouraging the sharing of technology and industrial ideas. 
C)  hurts economic growth because foreign countries can produce goods with lower labor costs. 
D)  helps economic growth by increasing tariffs.

Question 20

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

Exam 9: Global Economic Growth and Development

Which of the following nations has experienced the highest average annual rate of growth of per capita real GDP since 1990?

Improvements in labor productivity

Traditionally, economists regarded improvements in technology as

Which of the following is an obstacle to economic development?

Which of the following variables is used to measure economic growth?

Which of the following is NOT an obstacle to economic development?

Labor productivity is commonly measured as

The term "economic" growth refers to increases in

Economic growth is usually defined as

The per capita GDP for Hungary in 2011 was $12,000 and in 2012 was $12,360. How much did the economy grow in 2012?

An outward shift of the production possibilities curve represents

Higher saving rates mean higher future growth rates because

Suppose two countries have per capita real GDP of $20,000 in 2010. Country A has a growth rate of 4 percent and Country B has a growth rate of 5 percent. By 2013, the per capita real GDPs for the two countries, respectively, are (rounded)

According to your text, which of the following countries currently has the highest annual per capita Gross Domestic Product (GDP) growth rate?

What is the real GDP after four years if Country X's average annual growth rate is 8.6 percent and the initial real GDP was $2,756.0 million?

Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that

Many countries find it difficult to achieve economic growth. This is because economic growth

A change in the growth rate of a country of one percentage point annually has

Free trade

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

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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