Question 1

Have Malthus' predictions about population growth come true?

Accepted Answer

A)  No, because modern birth control has limited population growth in all nations. 
B)  Yes, as evidenced by the famine and food shortages affecting every nation today. 
C)  No, because the world's food supply has grown much more rapidly than Malthus foresaw. 
D)  Yes. The world's food supply, measured by calories per person, continues to fall. 
A)  No, because modern birth control has limited population growth in all nations. 
B)  Yes, as evidenced by the famine and food shortages affecting every nation today. 
C)  No, because the world's food supply has grown much more rapidly than Malthus foresaw. 
D)  Yes. The world's food supply, measured by calories per person, continues to fall.

Question 2

Which of the following contributes to economic growth?

Accepted Answer

A)  increase in labor productivity 
B)  increase in consumer spending 
C)  increase in labor regulations restricting the hours of overtime allowed 
D)  increase in environmental protection policies 
A)  increase in labor productivity 
B)  increase in consumer spending 
C)  increase in labor regulations restricting the hours of overtime allowed 
D)  increase in environmental protection policies

Question 3

Which of the following statements is NOT consistent with new growth theorists' beliefs?

Accepted Answer

A)  Innovation can lead to lower productivity costs. 
B)  Inventions are much more important than innovation. 
C)  Technology must be understood in terms of what drives it. 
D)  Rewards lead to technological advances. 
A)  Innovation can lead to lower productivity costs. 
B)  Inventions are much more important than innovation. 
C)  Technology must be understood in terms of what drives it. 
D)  Rewards lead to technological advances.

Question 4

According to the text, the relationship between economic growth and the degree of how closed an economy is

Accepted Answer

A)  positive. 
B)  negative. 
C)  constant. 
D)  unstable. 
A)  positive. 
B)  negative. 
C)  constant. 
D)  unstable.

Question 5

Labor productivity increases when

Accepted Answer

A)  the population increases. 
B)  output increases even if the labor force has decreased. 
C)  output increases at the same rate as the labor force increases. 
D)  output increases faster than population increases. 
A)  the population increases. 
B)  output increases even if the labor force has decreased. 
C)  output increases at the same rate as the labor force increases. 
D)  output increases faster than population increases.

Question 6

Suppose that Country A and Country B each had the same per capita real Gross Domestic Product (GDP) of $10,000 in 2008. Country A's per capital real Gross Domestic Product (GDP) had a growth rate of 3 percent per year and Country B's per capital real Gross Domestic Product (GDP) had a growth rate of 4 percent per year. By 2013, the per-capita real Gross Domestic Product (GDP) for the two countries, respectively, were

Accepted Answer

A)  $11,941 and $12,653. 
B)  $11,593 and $12,167. 
C)  $10,300 and $10,400. 
D)  $14,000 and $16,000. 
A)  $11,941 and $12,653. 
B)  $11,593 and $12,167. 
C)  $10,300 and $10,400. 
D)  $14,000 and $16,000.

Question 7

Economic growth occurs as a result of all of the following EXCEPT

Accepted Answer

A)  more labor hours. 
B)  growth of capital. 
C)  technological progress. 
D)  less saving. 
A)  more labor hours. 
B)  growth of capital. 
C)  technological progress. 
D)  less saving.

Question 8

A reduction in a country's saving rate will tend to cause which of the following in the long run?

Accepted Answer

A)  an increase in the standard of living 
B)  a reduction in economic growth 
C)  an increase in labor productivity 
D)  an increase in per capita real GDP 
A)  an increase in the standard of living 
B)  a reduction in economic growth 
C)  an increase in labor productivity 
D)  an increase in per capita real GDP

Question 9

When looking at economic growth in a country, the distribution of output and income

Accepted Answer

A)  generally follows predictable patterns. 
B)  is not taken into consideration. 
C)  is skewed toward the lowest quintile of the population. 
D)  is shared equally. 
A)  generally follows predictable patterns. 
B)  is not taken into consideration. 
C)  is skewed toward the lowest quintile of the population. 
D)  is shared equally.

Question 10

-Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year. After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars?

Accepted Answer

A)  B is 8 times larger, or $175,000 larger on a real per capita basis. 
B)  B is 12 times larger, or $230,000 larger on a real per capita basis. 
C)  B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis. 
D)  B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis. 
A)  B is 8 times larger, or $175,000 larger on a real per capita basis. 
B)  B is 12 times larger, or $230,000 larger on a real per capita basis. 
C)  B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis. 
D)  B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis.

Question 11

Graphically, economic growth is represented as

Accepted Answer

A)  a movement along the production possibilities curve. 
B)  a movement from a point inside the production possibilities curve to a point on the curve itself. 
C)  an inward shift of the production possibilities curve. 
D)  an outward shift of the production possibilities curve. 
A)  a movement along the production possibilities curve. 
B)  a movement from a point inside the production possibilities curve to a point on the curve itself. 
C)  an inward shift of the production possibilities curve. 
D)  an outward shift of the production possibilities curve.

Question 12

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

Accepted Answer

A)  allow the government control of the innovations. 
B)  give confidence to inventors that they will profit from their innovation. 
C)  give confidence to consumers that the products they buy are safe. 
D)  give businesses loans to buy new machinery. 
A)  allow the government control of the innovations. 
B)  give confidence to inventors that they will profit from their innovation. 
C)  give confidence to consumers that the products they buy are safe. 
D)  give businesses loans to buy new machinery.

Question 13

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has

Accepted Answer

A)  decreased. 
B)  increased. 
C)  stayed the same. 
D)  decreased in the manufacturing sector but increased in the service sector. 
A)  decreased. 
B)  increased. 
C)  stayed the same. 
D)  decreased in the manufacturing sector but increased in the service sector.

Question 14

There has been some concern in the United States that people are not saving enough. This is a concern because

Accepted Answer

A)  decreases in saving lead to decreases in labor productivity. 
B)  decreases in saving lead to decreases in investment. 
C)  decreases in saving lead to increases in the capital stock. 
D)  decreases in saving lead to increases in consumption in the future. 
A)  decreases in saving lead to decreases in labor productivity. 
B)  decreases in saving lead to decreases in investment. 
C)  decreases in saving lead to increases in the capital stock. 
D)  decreases in saving lead to increases in consumption in the future.

Question 15

Which of the following are mentioned as forces of the new growth theory that influence economic growth? I. Technology
II) Research
III) Innovations

Accepted Answer

A)  I only 
B)  I and II only 
C)  I and III only 
D)  II and III only 
E)  I, II, and III 
A)  I only 
B)  I and II only 
C)  I and III only 
D)  II and III only 
E)  I, II, and III

Question 16

Which of the following is true of trends in the number of new U.S. patents?

Accepted Answer

A)  There was a steady increase in new patents throughout the 1970s. 
B)  There was a surge in new patents in the latter part of the 1990s. 
C)  The number of new patents granted each year has remained unchanged since the early 1970s. 
D)  The number of new patents granted each year declined by more than 50 percent after 2001. 
A)  There was a steady increase in new patents throughout the 1970s. 
B)  There was a surge in new patents in the latter part of the 1990s. 
C)  The number of new patents granted each year has remained unchanged since the early 1970s. 
D)  The number of new patents granted each year declined by more than 50 percent after 2001.

Question 17

One of the implications of new growth theory is that economic growth arises from

Accepted Answer

A)  limits on international trade. 
B)  investments in knowledge. 
C)  financial safety nets for the poor, such as Medicaid. 
D)  reductions in the birth rate. 
A)  limits on international trade. 
B)  investments in knowledge. 
C)  financial safety nets for the poor, such as Medicaid. 
D)  reductions in the birth rate.

Question 18

-Refer to the above table. Two countries have per capita real GDPs in 2010 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2060?

Accepted Answer

A)  A: $40,000; B: $60,000 
B)  A: $35,550; B: $57,500 
C)  A: $24,000; B: $35,200 
D)  A: $15,000; B: $30,000 
A)  A: $40,000; B: $60,000 
B)  A: $35,550; B: $57,500 
C)  A: $24,000; B: $35,200 
D)  A: $15,000; B: $30,000

Question 19

An outward shift of the production possibilities curve demonstrates

Accepted Answer

A)  a recession. 
B)  an increased rate of inflation. 
C)  economic growth. 
D)  a cyclical shock. 
A)  a recession. 
B)  an increased rate of inflation. 
C)  economic growth. 
D)  a cyclical shock.

Question 20

Which one of the following is true?

Accepted Answer

A)  As a country becomes more prosperous, it experiences a higher birth rate. 
B)  Over the past century, the supply of food has grown more quickly than has the demand for food. 
C)  Over the past century, the real price of food has risen, reflecting the pressure of population growth on food supplies. 
D)  Over the next half-century, it is expected that population growth in industrially advanced nations will outpace population growth in developing countries. 
A)  As a country becomes more prosperous, it experiences a higher birth rate. 
B)  Over the past century, the supply of food has grown more quickly than has the demand for food. 
C)  Over the past century, the real price of food has risen, reflecting the pressure of population growth on food supplies. 
D)  Over the next half-century, it is expected that population growth in industrially advanced nations will outpace population growth in developing countries.

Exam 9: Global Economic Growth and Development

Have Malthus' predictions about population growth come true?

Which of the following contributes to economic growth?

Which of the following statements is NOT consistent with new growth theorists' beliefs?

According to the text, the relationship between economic growth and the degree of how closed an economy is

Labor productivity increases when

Economic growth occurs as a result of all of the following EXCEPT

A reduction in a country's saving rate will tend to cause which of the following in the long run?

When looking at economic growth in a country, the distribution of output and income

-Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year. After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars?

Graphically, economic growth is represented as

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has

There has been some concern in the United States that people are not saving enough. This is a concern because

Which of the following are mentioned as forces of the new growth theory that influence economic growth? I. Technology II) Research III) Innovations

Which of the following is true of trends in the number of new U.S. patents?

One of the implications of new growth theory is that economic growth arises from

-Refer to the above table. Two countries have per capita real GDPs in 2010 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2060?

An outward shift of the production possibilities curve demonstrates

Which one of the following is true?

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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