Question 1

China's "Great Leap Forward" caused agricultural production to plummet and millions starved to death as a result.

Accepted Answer

A) True 
 B)False

Question 2

Why are property rights important for economic development?

Accepted Answer

Property rights ensure that people will

Question 3

Which of the following is (are)NOT an institution of economic growth?

Accepted Answer

A)  property rights 
B)  a dependable legal system 
C)  competitive and open markets 
D)  free-riding behavior 
A)  property rights 
B)  a dependable legal system 
C)  competitive and open markets 
D)  free-riding behavior

Question 4

The Industrial Revolution was in large part due to:

Accepted Answer

A)  the economies of scale realized from mass production techniques. 
B)  increased education. 
C)  the discovery of large supplies of natural resources. 
D)  the cooperation of governments across the world. 
A)  the economies of scale realized from mass production techniques. 
B)  increased education. 
C)  the discovery of large supplies of natural resources. 
D)  the cooperation of governments across the world.

Question 5

Explain why per capita real GDP is a better measure of economic growth than real GDP.

Accepted Answer

Economic growth is best thought of as in

Question 6

Which scenario has the greatest potential for free riding?

Accepted Answer

A)  an unstable political system 
B)  a system in which work effort and pay are not connected 
C)  a dishonest government that promotes corruption 
D)  secure property rights 
A)  an unstable political system 
B)  a system in which work effort and pay are not connected 
C)  a dishonest government that promotes corruption 
D)  secure property rights

Question 7

The stock of tools,including machines,structures,and equipment,used to produce output is called:

Accepted Answer

A)  physical capital. 
B)  human capital. 
C)  technological knowledge. 
D)  real capital. 
A)  physical capital. 
B)  human capital. 
C)  technological knowledge. 
D)  real capital.

Question 8

Which is NOT likely an ultimate cause of economic growth around the world?

Accepted Answer

A)  historical differences 
B)  geographical locations 
C)  communal resources 
D)  luck 
A)  historical differences 
B)  geographical locations 
C)  communal resources 
D)  luck

Question 9

Examples of physical capital are tractors,factories,and shovels.

Accepted Answer

A) True 
 B)False

Question 10

Decreases in the level of political stability in a country tend to:

Accepted Answer

A)  increase per capita GDP. 
B)  decrease per capita GDP. 
C)  have no impact on per capita GDP. 
D)  increase per capita GDP at lower levels of stability,but decrease per capita GDP at higher levels of stability. 
A)  increase per capita GDP. 
B)  decrease per capita GDP. 
C)  have no impact on per capita GDP. 
D)  increase per capita GDP at lower levels of stability,but decrease per capita GDP at higher levels of stability.

Question 11

Countries with high per capita GDP have institutions that make it in people's self-interest to invest in:

Accepted Answer

A)  physical capital. 
B)  human capital. 
C)  technology. 
D)  all of the factors of production. 
A)  physical capital. 
B)  human capital. 
C)  technology. 
D)  all of the factors of production.

Question 12

Half of the world's population earns the average world GDP per capita of roughly $20,000.

Accepted Answer

A) True 
 B)False

Question 13

What are "incentives" and why are they important in the growth process?

Accepted Answer

Incentives are rewards or penalties that

Question 14

Korea was divided into North and South Korea at the end of World War II.What similarities did the two nations have at that time? What differences contributed to the fact that South Korea now has a per capita GDP that is over ten times higher than that of North Korea?

Accepted Answer

The two nations had the same history,cul

Question 15

An ultimate cause for the rapid economic growth during the Industrial Revolution was:

Accepted Answer

A)  the development of good institutions that provide people with incentives to engage in business and invention. 
B)  the strengthening of government control in markets and its role in income redistribution. 
C)  the discovery of wind power to generate electricity. 
D)  Great Britain's colonization activity around the world. 
A)  the development of good institutions that provide people with incentives to engage in business and invention. 
B)  the strengthening of government control in markets and its role in income redistribution. 
C)  the discovery of wind power to generate electricity. 
D)  Great Britain's colonization activity around the world.

Question 16

A country increases its physical capital by engaging in:

Accepted Answer

A)  research and development. 
B)  education and training. 
C)  programs that improve workers' health. 
D)  investment. 
A)  research and development. 
B)  education and training. 
C)  programs that improve workers' health. 
D)  investment.

Question 17

According to the text,we can understand the "wealth of nations" best by examining:

Accepted Answer

A)  how natural resources are distributed around the world. 
B)  the extent to which governments support the domestic markets. 
C)  the laws and regulations that affect people's incentives to work and invest. 
D)  the amount of technological knowledge obtained from other countries. 
A)  how natural resources are distributed around the world. 
B)  the extent to which governments support the domestic markets. 
C)  the laws and regulations that affect people's incentives to work and invest. 
D)  the amount of technological knowledge obtained from other countries.

Question 18

China's impressive growth in recent decades is a result of policies that began during its "Great Leap Forward" program.

Accepted Answer

A) True 
 B)False

Question 19

In general,increases in a country's wealth will cause infant survival rates to:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  become unpredictable. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  become unpredictable.

Question 20

Which of the following is NOT directly related to human capital?

Accepted Answer

A)  a calculator 
B)  work experience 
C)  schooling 
D)  an understanding of chemistry 
A)  a calculator 
B)  work experience 
C)  schooling 
D)  an understanding of chemistry

Exam 7: The Wealth of Nations and Economic Growth

China's "Great Leap Forward" caused agricultural production to plummet and millions starved to death as a result.

Why are property rights important for economic development?

Which of the following is (are)NOT an institution of economic growth?

The Industrial Revolution was in large part due to:

Explain why per capita real GDP is a better measure of economic growth than real GDP.

Which scenario has the greatest potential for free riding?

The stock of tools,including machines,structures,and equipment,used to produce output is called:

Which is NOT likely an ultimate cause of economic growth around the world?

Examples of physical capital are tractors,factories,and shovels.

Decreases in the level of political stability in a country tend to:

Countries with high per capita GDP have institutions that make it in people's self-interest to invest in:

Half of the world's population earns the average world GDP per capita of roughly $20,000.

What are "incentives" and why are they important in the growth process?

Korea was divided into North and South Korea at the end of World War II.What similarities did the two nations have at that time? What differences contributed to the fact that South Korea now has a per capita GDP that is over ten times higher than that of North Korea?

An ultimate cause for the rapid economic growth during the Industrial Revolution was:

A country increases its physical capital by engaging in:

According to the text,we can understand the "wealth of nations" best by examining:

China's impressive growth in recent decades is a result of policies that began during its "Great Leap Forward" program.

In general,increases in a country's wealth will cause infant survival rates to:

Which of the following is NOT directly related to human capital?

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

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