Question 1

Regarding the role of saving in economic growth, studies indicate that

Accepted Answer

A)  there is a positive relationship between economic growth and saving. 
B)  there is no relationship between economic growth and saving. 
C)  there is a negative relationship between economic growth and saving. 
D)  there is both a positive and a negative relationship between economic growth and saving. 
A)  there is a positive relationship between economic growth and saving. 
B)  there is no relationship between economic growth and saving. 
C)  there is a negative relationship between economic growth and saving. 
D)  there is both a positive and a negative relationship between economic growth and saving.

Question 2

An important factor in determining a country's rate of economic growth is

Accepted Answer

A)  the diversity of its population. 
B)  its rate of saving. 
C)  the size of its labor force. 
D)  the proportion of the adult population that is working. 
A)  the diversity of its population. 
B)  its rate of saving. 
C)  the size of its labor force. 
D)  the proportion of the adult population that is working.

Question 3

According to the new growth theory,

Accepted Answer

A)  technology should be considered as a factor of production. 
B)  technology plays a minor role in economic development. 
C)  technology provides few rewards to the society. 
D)  technology is a natural by-product of invention. 
A)  technology should be considered as a factor of production. 
B)  technology plays a minor role in economic development. 
C)  technology provides few rewards to the society. 
D)  technology is a natural by-product of invention.

Question 4

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

Accepted Answer

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

Question 5

Thomas Robert Malthus believed

Accepted Answer

A)  that food supplies would always be more than sufficient to feed the world's population. 
B)  that the world's population would eventually outstrip food supplies. 
C)  that population growth was good for the world. 
D)  that population growth would eventually lead to an increase in the quality of life for everyone. 
A)  that food supplies would always be more than sufficient to feed the world's population. 
B)  that the world's population would eventually outstrip food supplies. 
C)  that population growth was good for the world. 
D)  that population growth would eventually lead to an increase in the quality of life for everyone.

Question 6

Countries are concerned about small changes in their average annual growth rates in per capita income because

Accepted Answer

A)  growth rates tend to decline over time. 
B)  the power of compounding means small changes have large effects over time. 
C)  the faster a country grows today, the less it will be able to consume in the future. 
D)  growth rates are a factor in U.N. participation. 
A)  growth rates tend to decline over time. 
B)  the power of compounding means small changes have large effects over time. 
C)  the faster a country grows today, the less it will be able to consume in the future. 
D)  growth rates are a factor in U.N. participation.

Question 7

Which of the following is NOT associated with the new growth theory?

Accepted Answer

A)  Natural resources 
B)  Research 
C)  Technology 
D)  Innovation 
A)  Natural resources 
B)  Research 
C)  Technology 
D)  Innovation

Question 8

Which one of the following describes the current state of economic development in the United States?

Accepted Answer

A)  The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B)  Employment is declining in the manufacturing sector and growing in the service sector. 
C)  Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D)  The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace. 
A)  The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B)  Employment is declining in the manufacturing sector and growing in the service sector. 
C)  Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D)  The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace.

Question 9

A country has had its per capital real GDP remain constant for several years. During this period this country

Accepted Answer

A)  has not experienced any economic growth. 
B)  may have experienced economic growth if the average hours worked per week have fallen. 
C)  will have experienced an inward shift of the production possibilities curve. 
D)  will have an increase in the number of poor people. 
A)  has not experienced any economic growth. 
B)  may have experienced economic growth if the average hours worked per week have fallen. 
C)  will have experienced an inward shift of the production possibilities curve. 
D)  will have an increase in the number of poor people.

Question 10

In the United States, the main contributor to economic growth is due to the growth in

Accepted Answer

A)  physical capital. 
B)  education (human capital). 
C)  labor resources. 
D)  capital and labor productivity. 
A)  physical capital. 
B)  education (human capital). 
C)  labor resources. 
D)  capital and labor productivity.

Question 11

According to the United Nations, the largest expected growth in population for the coming decades will occur on which continent?

Accepted Answer

A)  Europe 
B)  South America 
C)  North America 
D)  Africa 
A)  Europe 
B)  South America 
C)  North America 
D)  Africa

Question 12

Which of the following is a benefit of economic growth?

Accepted Answer

A)  reduction in illiteracy 
B)  reduction in poverty 
C)  improved health 
D)  all of the above 
A)  reduction in illiteracy 
B)  reduction in poverty 
C)  improved health 
D)  all of the above

Question 13

All of the following will cause the reported growth rate in a country to change EXCEPT

Accepted Answer

A)  population changes. 
B)  changes in the number of poor people in the country. 
C)  a shift of the production possibilities curve. 
D)  changes in productivity. 
A)  population changes. 
B)  changes in the number of poor people in the country. 
C)  a shift of the production possibilities curve. 
D)  changes in productivity.

Question 14

An increase in growth rates will cause the production possibilities curve to

Accepted Answer

A)  shift inward. 
B)  become steeper. 
C)  become flatter. 
D)  shift outward. 
A)  shift inward. 
B)  become steeper. 
C)  become flatter. 
D)  shift outward.

Question 15

Well-defined property rights give entrepreneurs the incentive to

Accepted Answer

A)  engage in risky business endeavors in order to accumulate future wealth. 
B)  use the eminent domain laws to seize property for public use. 
C)  lobby Congress in order to increase environmental regulations. 
D)  evade taxes. 
A)  engage in risky business endeavors in order to accumulate future wealth. 
B)  use the eminent domain laws to seize property for public use. 
C)  lobby Congress in order to increase environmental regulations. 
D)  evade taxes.

Question 16

Labor productivity can best be calculated as

Accepted Answer

A)  real Gross Domestic Product (GDP) / Gross Domestic Product (GDP) price index. 
B)  real Gross Domestic Product (GDP) / number of workers. 
C)  number of workers / hours of work. 
D)  real wages / hours of work. 
A)  real Gross Domestic Product (GDP) / Gross Domestic Product (GDP) price index. 
B)  real Gross Domestic Product (GDP) / number of workers. 
C)  number of workers / hours of work. 
D)  real wages / hours of work.

Question 17

A government grant that gives an inventor the exclusive right or privilege to make, use, or sell his or her invention is known as

Accepted Answer

A)  a positive externality. 
B)  a negative externality. 
C)  a protectionism clause. 
D)  a patent. 
A)  a positive externality. 
B)  a negative externality. 
C)  a protectionism clause. 
D)  a patent.

Question 18

Suppose per capita real GDP grows by 3.5% 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 (i.e., increase by 100%)?

Accepted Answer

A)  3.5 years 
B)  10 years 
C)  20 years 
D)  35 years 
A)  3.5 years 
B)  10 years 
C)  20 years 
D)  35 years

Question 19

The federal government awards a patent holder the exclusive right to make, use, and sell an invention for a period of

Accepted Answer

A)  20 years. 
B)  17 years. 
C)  unlimited period. 
D)  100 years. 
A)  20 years. 
B)  17 years. 
C)  unlimited period. 
D)  100 years.

Question 20

Other things held constant, higher saving rates lead to

Accepted Answer

A)  a lower standard of living. 
B)  increases in the number of hours workers work. 
C)  decreases in real per capita GDP. 
D)  higher living standards. 
A)  a lower standard of living. 
B)  increases in the number of hours workers work. 
C)  decreases in real per capita GDP. 
D)  higher living standards.

Exam 9: Global Economic Growth and Development

Regarding the role of saving in economic growth, studies indicate that

An important factor in determining a country's rate of economic growth is

According to the new growth theory,

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

Thomas Robert Malthus believed

Countries are concerned about small changes in their average annual growth rates in per capita income because

Which of the following is NOT associated with the new growth theory?

Which one of the following describes the current state of economic development in the United States?

A country has had its per capital real GDP remain constant for several years. During this period this country

In the United States, the main contributor to economic growth is due to the growth in

According to the United Nations, the largest expected growth in population for the coming decades will occur on which continent?

Which of the following is a benefit of economic growth?

All of the following will cause the reported growth rate in a country to change EXCEPT

An increase in growth rates will cause the production possibilities curve to

Well-defined property rights give entrepreneurs the incentive to

Labor productivity can best be calculated as

A government grant that gives an inventor the exclusive right or privilege to make, use, or sell his or her invention is known as

Suppose per capita real GDP grows by 3.5% 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 (i.e., increase by 100%)?

The federal government awards a patent holder the exclusive right to make, use, and sell an invention for a period of

Other things held constant, higher saving rates lead to

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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