Question 1

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

Accepted Answer

A) True 
 B)False

Question 2

Between 1990 and 2005 the price of oil was low relative to prices in the 1970s and 1980s, and consumers responded by buying large, fuel-inefficient vehicles.

Accepted Answer

A) True 
 B)False

Question 3

Economists are optimistic that growth can continue in the face of resource scarcity because:

Accepted Answer

A) the oil industry vastly understates the level of oil reserves. 
B) prices of scarce resources fall and provide incentives to use more of those resources. 
C) prices of scarce resources rise and provide incentives to find alternative energy sources. 
D) resource scarcity no longer limits economic growth. 
A) the oil industry vastly understates the level of oil reserves. 
B) prices of scarce resources fall and provide incentives to use more of those resources. 
C) prices of scarce resources rise and provide incentives to find alternative energy sources. 
D) resource scarcity no longer limits economic growth.

Question 4

The skills, training, and education possessed by workers that contribute to economic growth are known as:

Accepted Answer

A) saving. 
B) human capital. 
C) natural resources. 
D) output of labor. 
A) saving. 
B) human capital. 
C) natural resources. 
D) output of labor.

Question 5

An example of human capital is a person's:

Accepted Answer

A) money. 
B) job skills. 
C) capital goods or machines. 
D) stocks and bonds. 
A) money. 
B) job skills. 
C) capital goods or machines. 
D) stocks and bonds.

Question 6

After the price of oil increased in the 1970s, the growth rate of the United States declined substantially.

Accepted Answer

A) True 
 B)False

Question 7

Today, more than _____ of the world's population lives in countries poorer than the United States was a century ago.

Accepted Answer

A) one-fifth 
B) one-third 
C) one-half 
D) two-fifths 
A) one-fifth 
B) one-third 
C) one-half 
D) two-fifths

Question 8

Which of the following will NOT increase the productivity of labor?

Accepted Answer

A) technological improvements 
B) an increase in the capital stock 
C) improvements in education 
D) an increase in the size of the labor force 
A) technological improvements 
B) an increase in the capital stock 
C) improvements in education 
D) an increase in the size of the labor force

Question 9

Use the following to answer questions :
Figure: Nations A and B  
-(Figure: Nations A and
B) Look at the figure Nations A and B. Suppose that in 1960 each nation had $100 of physical capital for each worker and in 2010 each nation had $400 of physical capital per worker. Compute the growth of real GDP per capita for both nations.

Accepted Answer

Nation A: ($5,000 -

Question 10

Between 1980 and 1994, growth rates of real GDP per capita in sub-Saharan Africa ranged from 20% to 30%.

Accepted Answer

A) True 
 B)False

Question 11

Malthus' predictions have proved to be true, and they explain why U.S. productivity growth slowed between the 1970s and the mid-1990s.

Accepted Answer

A) True 
 B)False

Question 12

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have higher growth rates.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following factors have contributed to the lack of economic growth in Latin America?
I. lack of natural resources
II. high rates of savings that led to insufficient consumption of goods and services
III. political instability

Accepted Answer

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

Question 14

To find the approximate number of years it takes the economy to double:

Accepted Answer

A) divide its growth rate by 70. 
B) divide 70 by its growth rate. 
C) divide its growth rate by 100. 
D) multiply its growth rate by 20. 
A) divide its growth rate by 70. 
B) divide 70 by its growth rate. 
C) divide its growth rate by 100. 
D) multiply its growth rate by 20.

Question 15

According to the rule of 70, if a country has an average growth rate of 7%, its real GDP per capita will double in:

Accepted Answer

A) 7 years. 
B) 10 years. 
C) 14 years. 
D) 2 years. 
A) 7 years. 
B) 10 years. 
C) 14 years. 
D) 2 years.

Question 16

The convergence hypothesis is:

Accepted Answer

A) wrong, because Latin American and African countries have not been able to grow. 
B) not wrong, but education, infrastructure, and the rule of law are not equal among nations. 
C) not wrong, but because poorer nations are involved in so many destabilizing incidents like wars, disease, and famines, they will never be able to catch up with the rest of the world. 
D) wrong, because poorer nations' income seems to get worse over time and the richer nations' income get better. 
A) wrong, because Latin American and African countries have not been able to grow. 
B) not wrong, but education, infrastructure, and the rule of law are not equal among nations. 
C) not wrong, but because poorer nations are involved in so many destabilizing incidents like wars, disease, and famines, they will never be able to catch up with the rest of the world. 
D) wrong, because poorer nations' income seems to get worse over time and the richer nations' income get better.

Question 17

Use the following to answer questions :  
-(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. During 2010, assuming no changes in the price level, aggregate output per capita in Kenya grew at a rate of:

Accepted Answer

A) 0.6%. 
B) 2.6%. 
C) 5.2%. 
D) 7.8%. 
A) 0.6%. 
B) 2.6%. 
C) 5.2%. 
D) 7.8%.

Question 18

Use the following to answer questions :
Scenario: Growth Rates
Suppose that real GDP per capita of the United States is $32,000 and its growth rate is 2% per year. Real GDP per capita of China is $4,000, and its annual growth rate is 7%.
-(Scenario: Growth Rates) Look at the scenario Growth Rates. According to the rule of 70, how large will China's real GDP per capita be in 20 years?

Accepted Answer

A) $5,600 
B) $8,000 
C) $16,000 
D) $28,000 
A) $5,600 
B) $8,000 
C) $16,000 
D) $28,000

Question 19

Use the following to answer questions :  
-(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output per capita at the end of 2010, assuming no changes in the price level, was:

Accepted Answer

A) $7,000. 
B) $7,005. 
C) $795. 
D) $7,490. 
A) $7,000. 
B) $7,005. 
C) $795. 
D) $7,490.

Question 20

An increase in capital stock would:

Accepted Answer

A) shift the production function upward. 
B) shift the production function inward. 
C) shift the production function downward. 
D) cause a movement to the right along a stationary production function. 
A) shift the production function upward. 
B) shift the production function inward. 
C) shift the production function downward. 
D) cause a movement to the right along a stationary production function.

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

Between 1990 and 2005 the price of oil was low relative to prices in the 1970s and 1980s, and consumers responded by buying large, fuel-inefficient vehicles.

Economists are optimistic that growth can continue in the face of resource scarcity because:

The skills, training, and education possessed by workers that contribute to economic growth are known as:

An example of human capital is a person's:

After the price of oil increased in the 1970s, the growth rate of the United States declined substantially.

Today, more than _____ of the world's population lives in countries poorer than the United States was a century ago.

Which of the following will NOT increase the productivity of labor?

Between 1980 and 1994, growth rates of real GDP per capita in sub-Saharan Africa ranged from 20% to 30%.

Malthus' predictions have proved to be true, and they explain why U.S. productivity growth slowed between the 1970s and the mid-1990s.

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have higher growth rates.

Which of the following factors have contributed to the lack of economic growth in Latin America? I. lack of natural resources II. high rates of savings that led to insufficient consumption of goods and services III. political instability

To find the approximate number of years it takes the economy to double:

According to the rule of 70, if a country has an average growth rate of 7%, its real GDP per capita will double in:

The convergence hypothesis is:

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. During 2010, assuming no changes in the price level, aggregate output per capita in Kenya grew at a rate of:

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output per capita at the end of 2010, assuming no changes in the price level, was:

An increase in capital stock would:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 9: Long-Run Economic Growth

Because the gap in real GDP per capita between Western Europe, North America, and parts of Asia is widening, the convergence hypothesis is wrong.

Between 1990 and 2005 the price of oil was low relative to prices in the 1970s and 1980s, and consumers responded by buying large, fuel-inefficient vehicles.

Economists are optimistic that growth can continue in the face of resource scarcity because:

The skills, training, and education possessed by workers that contribute to economic growth are known as:

An example of human capital is a person's:

After the price of oil increased in the 1970s, the growth rate of the United States declined substantially.

Today, more than _____ of the world's population lives in countries poorer than the United States was a century ago.

Which of the following will NOT increase the productivity of labor?

Between 1980 and 1994, growth rates of real GDP per capita in sub-Saharan Africa ranged from 20% to 30%.

Malthus' predictions have proved to be true, and they explain why U.S. productivity growth slowed between the 1970s and the mid-1990s.

According to the convergence hypothesis, differences in GDP per capita among countries tend to narrow over time because countries that start with a lower real GDP per capita tend to have higher growth rates.

Which of the following factors have contributed to the lack of economic growth in Latin America? I. lack of natural resources II. high rates of savings that led to insufficient consumption of goods and services III. political instability

To find the approximate number of years it takes the economy to double:

According to the rule of 70, if a country has an average growth rate of 7%, its real GDP per capita will double in:

The convergence hypothesis is:

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. During 2010, assuming no changes in the price level, aggregate output per capita in Kenya grew at a rate of:

Use the following to answer questions : -(Table: Kenya's Economy in 2010) Look at the table Kenya's Economy in 2010. Aggregate output per capita at the end of 2010, assuming no changes in the price level, was:

An increase in capital stock would:

First Principles

Economic Models

Supply and Demand

International Trade 5

Macroeconomics: the Big Picture

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters