Question 1

Which one of the following helps preserve incentives to develop new technologies?

Accepted Answer

A)  patents 
B)  tariffs 
C)  quantity restrictions on imports 
D)  income taxes 
A)  patents 
B)  tariffs 
C)  quantity restrictions on imports 
D)  income taxes

Question 2

Productivity relates to

Accepted Answer

A)  working harder over time. 
B)  working longer over time. 
C)  producing the same output with fewer labor hours. 
D)  producing the same output with more labor hours. 
A)  working harder over time. 
B)  working longer over time. 
C)  producing the same output with fewer labor hours. 
D)  producing the same output with more labor hours.

Question 3

To encourage economic development a country should do all of the following EXCEPT

Accepted Answer

A)  invest in human capital. 
B)  limit the amount of imports allowed into the country. 
C)  allow creative destruction to run its course. 
D)  establish a system of property rights. 
A)  invest in human capital. 
B)  limit the amount of imports allowed into the country. 
C)  allow creative destruction to run its course. 
D)  establish a system of property rights.

Question 4

Suppose per capita real GDP grows by 7% per year. Based on the Rule of 70, approximately how many years will it take for the level of per capita real GDP to double?

Accepted Answer

A)  4.9 years 
B)  7 years 
C)  10 years 
D)  none of the above 
A)  4.9 years 
B)  7 years 
C)  10 years 
D)  none of the above

Question 5

The study of factors that contribute to the economic development of a country is

Accepted Answer

A)  population growth economics. 
B)  development economics. 
C)  the theory of technological advancements. 
D)  the new technology theory. 
A)  population growth economics. 
B)  development economics. 
C)  the theory of technological advancements. 
D)  the new technology theory.

Question 6

A higher rate of saving should lead to

Accepted Answer

A)  higher current consumption. 
B)  less growth. 
C)  more investment, higher capital growth, and more future consumption. 
D)  a higher price level and reduced future consumption. 
A)  higher current consumption. 
B)  less growth. 
C)  more investment, higher capital growth, and more future consumption. 
D)  a higher price level and reduced future consumption.

Question 7

When Country X has high economic growth, this country has

Accepted Answer

A)  a high level of real Gross Domestic Product (GDP). 
B)  a high level of per capita real Gross Domestic Product (GDP). 
C)  a large increase in per capita real Gross Domestic Product (GDP). 
D)  a large increase in personal income. 
A)  a high level of real Gross Domestic Product (GDP). 
B)  a high level of per capita real Gross Domestic Product (GDP). 
C)  a large increase in per capita real Gross Domestic Product (GDP). 
D)  a large increase in personal income.

Question 8

What did Malthus say about population growth?

Accepted Answer

A)  Population growth is the key to a nation's economic growth. 
B)  Population growth is not a problem if food production keeps up, and Malthus predicted that it would. 
C)  Population growth is a huge problem if housing and medical care don't also increase. 
D)  The population would grow faster than food supplies, which would be a recipe for disaster. 
A)  Population growth is the key to a nation's economic growth. 
B)  Population growth is not a problem if food production keeps up, and Malthus predicted that it would. 
C)  Population growth is a huge problem if housing and medical care don't also increase. 
D)  The population would grow faster than food supplies, which would be a recipe for disaster.

Question 9

Would a new growth theorist expect economic growth to be very rapid in one of the Communist nations before the fall of Communism? Why or why not?

Accepted Answer

No. These centrally planned economies di

Question 10

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Accepted Answer

Disagree. Wealthier nations often have s

Question 11

Other things being equal, an increase in consumption spending implies

Accepted Answer

A)  a decline in saving. 
B)  a decline in government spending. 
C)  a higher standard of living in the future. 
D)  that economic growth will soon increase. 
A)  a decline in saving. 
B)  a decline in government spending. 
C)  a higher standard of living in the future. 
D)  that economic growth will soon increase.

Question 12

According to new growth theorists, more technological improvements can be brought about by

Accepted Answer

A)  a government policy that encourages increased consumption. 
B)  government policies that lead to increases in human capital. 
C)  tougher immigration laws. 
D)  the government taking a more active role in regulating industries. 
A)  a government policy that encourages increased consumption. 
B)  government policies that lead to increases in human capital. 
C)  tougher immigration laws. 
D)  the government taking a more active role in regulating industries.

Question 13

Innovation is

Accepted Answer

A)  always financed by the government. 
B)  an invention financed by the sale of bonds. 
C)  the transformation of an invention into something useful. 
D)  an invention financed by the sale of stock certificates. 
A)  always financed by the government. 
B)  an invention financed by the sale of bonds. 
C)  the transformation of an invention into something useful. 
D)  an invention financed by the sale of stock certificates.

Question 14

The study of factors that contribute to the economic growth of a country is known as

Accepted Answer

A)  natural resource economics. 
B)  entrepreneurial economics. 
C)  development economics. 
D)  savings economics. 
A)  natural resource economics. 
B)  entrepreneurial economics. 
C)  development economics. 
D)  savings economics.

Question 15

The modification of manufacturing processes so as to reduce the resulting environmental damage is an endeavor that requires capital investment, labor inputs, and technology. What then follows from this statement?

Accepted Answer

A)  Economic growth can benefit the environment. 
B)  Environmental damage is a regrettable but necessary side effect of economic growth. 
C)  The condition of the environment will be better in slower-growing countries. 
D)  The way to reduce pollution is to educate people about its effects. 
A)  Economic growth can benefit the environment. 
B)  Environmental damage is a regrettable but necessary side effect of economic growth. 
C)  The condition of the environment will be better in slower-growing countries. 
D)  The way to reduce pollution is to educate people about its effects.

Question 16

The measurement of economic growth cannot take into account

Accepted Answer

A)  the service sector of an economy. 
B)  productive activity in an economy. 
C)  cultural aspects of life in a country. 
D)  differences in inflation rates across countries. 
A)  the service sector of an economy. 
B)  productive activity in an economy. 
C)  cultural aspects of life in a country. 
D)  differences in inflation rates across countries.

Question 17

Using a production possibilities curve, economic growth is represented by

Accepted Answer

A)  an outward shift in the curve. 
B)  a movement along the curve. 
C)  an inward shift of the curve. 
D)  a pivot of the curve. 
A)  an outward shift in the curve. 
B)  a movement along the curve. 
C)  an inward shift of the curve. 
D)  a pivot of the curve.

Question 18

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?

Accepted Answer

A)  a decrease in economic growth 
B)  an increase in labor productivity 
C)  a reduction in the saving rate 
D)  an increase in population growth 
A)  a decrease in economic growth 
B)  an increase in labor productivity 
C)  a reduction in the saving rate 
D)  an increase in population growth

Question 19

Which of the following best represents economic growth?

Accepted Answer

A)  a movement down a given production possibilities curve. 
B)  a movement up a given production possibilities curve. 
C)  an outward or, equivalently, a rightward shift of the production possibilities curve. 
D)  an inward or, equivalently, leftward shift of the production possibilities curve. 
A)  a movement down a given production possibilities curve. 
B)  a movement up a given production possibilities curve. 
C)  an outward or, equivalently, a rightward shift of the production possibilities curve. 
D)  an inward or, equivalently, leftward shift of the production possibilities curve.

Question 20

One reason that economists encourage free trade is that

Accepted Answer

A)  it encourages a more rapid spread of technology. 
B)  it allows us to exploit the workers of less developed countries. 
C)  we can sell more goods. 
D)  it increases our capital stock. 
A)  it encourages a more rapid spread of technology. 
B)  it allows us to exploit the workers of less developed countries. 
C)  we can sell more goods. 
D)  it increases our capital stock.

Exam 9: Global Economic Growth and Development

Which one of the following helps preserve incentives to develop new technologies?

Productivity relates to

To encourage economic development a country should do all of the following EXCEPT

Suppose per capita real GDP grows by 7% per year. Based on the Rule of 70, approximately how many years will it take for the level of per capita real GDP to double?

The study of factors that contribute to the economic development of a country is

A higher rate of saving should lead to

When Country X has high economic growth, this country has

What did Malthus say about population growth?

Would a new growth theorist expect economic growth to be very rapid in one of the Communist nations before the fall of Communism? Why or why not?

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Other things being equal, an increase in consumption spending implies

According to new growth theorists, more technological improvements can be brought about by

Innovation is

The study of factors that contribute to the economic growth of a country is known as

The modification of manufacturing processes so as to reduce the resulting environmental damage is an endeavor that requires capital investment, labor inputs, and technology. What then follows from this statement?

The measurement of economic growth cannot take into account

Using a production possibilities curve, economic growth is represented by

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?

Which of the following best represents economic growth?

One reason that economists encourage free trade is that

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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