Question 1

History has shown that when collective property rights are converted to private property rights:

Accepted Answer

A)  investment in physical capital increases. 
B)  work effort increases. 
C)  productivity increases. 
D)  work effort,investment,and productivity all increase. 
A)  investment in physical capital increases. 
B)  work effort increases. 
C)  productivity increases. 
D)  work effort,investment,and productivity all increase.

Question 2

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society?

Accepted Answer

A)  well-defined property rights 
B)  political stability 
C)  low inflation 
D)  competitive markets 
A)  well-defined property rights 
B)  political stability 
C)  low inflation 
D)  competitive markets

Question 3

The difference between human capital and technological knowledge is that human capital relates to skills and education that reside within an individual,while technological knowledge is ideas and discoveries about how the world works.

Accepted Answer

A) True 
 B)False

Question 4

The United States has had sustained long-run economic growth for over 200 years.It would be impossible for a poor country today to catch up to the United States level of per capita real GDP.

Accepted Answer

A) True 
 B)False

Question 5

If the GDP of country X is 4 times the GDP of country Y and if the GDP of country X remains constant while GDP of country Y grows at a rate of 7% per year,which of the following statements is true?

Accepted Answer

A)  Country Y's GDP will be equal to country X's GDP in 10 years. 
B)  Country Y's GDP will be equal to country X's GDP in 20 years. 
C)  Country Y's GDP will be equal to country X's GDP in 40 years. 
D)  Country Y's GDP will never catch up with country X's GDP. 
A)  Country Y's GDP will be equal to country X's GDP in 10 years. 
B)  Country Y's GDP will be equal to country X's GDP in 20 years. 
C)  Country Y's GDP will be equal to country X's GDP in 40 years. 
D)  Country Y's GDP will never catch up with country X's GDP.

Question 6

The organization and efficiency with which a country's factors of production are used is an immediate cause of economic growth.

Accepted Answer

A) True 
 B)False

Question 7

China's experiment with communal farming failed because work effort was divorced from payment and there was little incentive to work.

Accepted Answer

A) True 
 B)False

Question 8

Which statement is TRUE of the effects of corruption?

Accepted Answer

A)  Corruption helps promote economic growth. 
B)  Corruption reduces the incentive to build wealth by imposing a tax on entrepreneurs. 
C)  Corruption raises investment by making it easier to run a business. 
D)  Corruption is the best way for the government to obtain revenues needed to run growth-promoting policies. 
A)  Corruption helps promote economic growth. 
B)  Corruption reduces the incentive to build wealth by imposing a tax on entrepreneurs. 
C)  Corruption raises investment by making it easier to run a business. 
D)  Corruption is the best way for the government to obtain revenues needed to run growth-promoting policies.

Question 9

Suppose that the annual real GDP per capita in India is currently $2,000 and in the United States it is $50,000.If the United States is growing at 3% per year,at what growth rate would India need to grow in order to have the same annual real GDP per capita as the United States 50 years from today? Show all of your work.

Accepted Answer

The answer of Suppose that the annual real GDP per...

Question 10

How has the recent growth experience in China benefited the ordinary citizen in China?

Accepted Answer

Economic growth has many benefits for th

Question 11

Human capital is:

Accepted Answer

A)  something we are born with. 
B)  the money spent on education and training. 
C)  acquired only through investment of time and other resources. 
D)  the same as technological knowledge. 
A)  something we are born with. 
B)  the money spent on education and training. 
C)  acquired only through investment of time and other resources. 
D)  the same as technological knowledge.

Question 12

Agricultural productivity in China sharply declined during its experiment with communal farming.This was primarily a result of:

Accepted Answer

A)  a decade-long drought in China. 
B)  the transition to open markets in China. 
C)  a lack of property rights for farm land. 
D)  political instability. 
A)  a decade-long drought in China. 
B)  the transition to open markets in China. 
C)  a lack of property rights for farm land. 
D)  political instability.

Question 13

The correlation between infant mortality and real GDP per capita is:

Accepted Answer

A)  zero. 
B)  positive. 
C)  negative. 
D)  unpredictable. 
A)  zero. 
B)  positive. 
C)  negative. 
D)  unpredictable.

Question 14

If real GDP per capita in a country was $14,000 in year 1 and $14,140 in year 2,then the economic growth rate for this country from year 1 to year 2 was:

Accepted Answer

A)  1%. 
B)  2%. 
C)  3%. 
D)  4%. 
A)  1%. 
B)  2%. 
C)  3%. 
D)  4%.

Question 15

A typical worker in India works with _____ a typical worker in the United States.

Accepted Answer

A)  many times more physical capital than 
B)  about the same amount of physical capital as 
C)  much less physical capital than 
D)  slightly more physical capital than 
A)  many times more physical capital than 
B)  about the same amount of physical capital as 
C)  much less physical capital than 
D)  slightly more physical capital than

Question 16

At an annual growth rate of 3.5%,approximately how long does it take for real GDP per capita to increase from $30,000 to $60,000 in a country?

Accepted Answer

A)  5 years 
B)  10 years 
C)  15 years 
D)  20 years 
A)  5 years 
B)  10 years 
C)  15 years 
D)  20 years

Question 17

Economic growth refers to the growth rate of:

Accepted Answer

A)  personal income. 
B)  GNP. 
C)  GDP. 
D)  GDP per capita. 
A)  personal income. 
B)  GNP. 
C)  GDP. 
D)  GDP per capita.

Question 18

A developing country could buy (or be given)_____ and _____ more easily than _____.

Accepted Answer

A)  technological knowledge;physical capital;human capital 
B)  physical capital;human capital;technological knowledge 
C)  human capital;technological knowledge;physical capital 
D)  human capital;work experience;technological knowledge 
A)  technological knowledge;physical capital;human capital 
B)  physical capital;human capital;technological knowledge 
C)  human capital;technological knowledge;physical capital 
D)  human capital;work experience;technological knowledge

Question 19

Which is NOT an example of physical capital?

Accepted Answer

A)  tractor 
B)  cell phone 
C)  computer 
D)  a share of Caterpillar,Inc.stock 
A)  tractor 
B)  cell phone 
C)  computer 
D)  a share of Caterpillar,Inc.stock

Question 20

A country that has enforceable property rights,a noncorrupt political system,abundant factors of production,and a change in leadership and form of government every few years should suspect that economic growth will be _____ because _____.

Accepted Answer

A)  slow;of a lack of a dependable legal system 
B)  slow;of uncertainty due to an unstable political system 
C)  high;most of the institutions needed for growth are in place 
D)  high;once a group comes to power all the institutions needed for growth exist 
A)  slow;of a lack of a dependable legal system 
B)  slow;of uncertainty due to an unstable political system 
C)  high;most of the institutions needed for growth are in place 
D)  high;once a group comes to power all the institutions needed for growth exist

History has shown that when collective property rights are converted to private property rights:

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society?

The difference between human capital and technological knowledge is that human capital relates to skills and education that reside within an individual,while technological knowledge is ideas and discoveries about how the world works.

The United States has had sustained long-run economic growth for over 200 years.It would be impossible for a poor country today to catch up to the United States level of per capita real GDP.

If the GDP of country X is 4 times the GDP of country Y and if the GDP of country X remains constant while GDP of country Y grows at a rate of 7% per year,which of the following statements is true?

The organization and efficiency with which a country's factors of production are used is an immediate cause of economic growth.

China's experiment with communal farming failed because work effort was divorced from payment and there was little incentive to work.

Which statement is TRUE of the effects of corruption?

How has the recent growth experience in China benefited the ordinary citizen in China?

Human capital is:

Agricultural productivity in China sharply declined during its experiment with communal farming.This was primarily a result of:

The correlation between infant mortality and real GDP per capita is:

If real GDP per capita in a country was $14,000 in year 1 and $14,140 in year 2,then the economic growth rate for this country from year 1 to year 2 was:

A typical worker in India works with _____ a typical worker in the United States.

At an annual growth rate of 3.5%,approximately how long does it take for real GDP per capita to increase from $30,000 to $60,000 in a country?

Economic growth refers to the growth rate of:

A developing country could buy (or be given)___ and _ more easily than ___.

Which is NOT an example of physical capital?

A country that has enforceable property rights,a noncorrupt political system,abundant factors of production,and a change in leadership and form of government every few years should suspect that economic growth will be _ because _.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

Exam 7: The Wealth of Nations and Economic Growth

History has shown that when collective property rights are converted to private property rights:

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society?

The difference between human capital and technological knowledge is that human capital relates to skills and education that reside within an individual,while technological knowledge is ideas and discoveries about how the world works.

The United States has had sustained long-run economic growth for over 200 years.It would be impossible for a poor country today to catch up to the United States level of per capita real GDP.

If the GDP of country X is 4 times the GDP of country Y and if the GDP of country X remains constant while GDP of country Y grows at a rate of 7% per year,which of the following statements is true?

The organization and efficiency with which a country's factors of production are used is an immediate cause of economic growth.

China's experiment with communal farming failed because work effort was divorced from payment and there was little incentive to work.

Which statement is TRUE of the effects of corruption?

How has the recent growth experience in China benefited the ordinary citizen in China?

Human capital is:

Agricultural productivity in China sharply declined during its experiment with communal farming.This was primarily a result of:

The correlation between infant mortality and real GDP per capita is:

If real GDP per capita in a country was $14,000 in year 1 and $14,140 in year 2,then the economic growth rate for this country from year 1 to year 2 was:

A typical worker in India works with _____ a typical worker in the United States.

At an annual growth rate of 3.5%,approximately how long does it take for real GDP per capita to increase from $30,000 to $60,000 in a country?

Economic growth refers to the growth rate of:

A developing country could buy (or be given)_____ and _____ more easily than _____.

Which is NOT an example of physical capital?

A country that has enforceable property rights,a noncorrupt political system,abundant factors of production,and a change in leadership and form of government every few years should suspect that economic growth will be _____ because _____.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

A developing country could buy (or be given)___ and _ more easily than ___.

A country that has enforceable property rights,a noncorrupt political system,abundant factors of production,and a change in leadership and form of government every few years should suspect that economic growth will be _ because _.