Question 1

Which of the following is true about underground economies?

Accepted Answer

A) Underground economies represent approximately 17% of GDP in OECD countries. 
B) Higher taxation and labor regulation are reasons why we see more underground activities. 
C) The underground economy includes legal activities that are concealed for the purpose of tax evasion. 
D) all of the above 
A) Underground economies represent approximately 17% of GDP in OECD countries. 
B) Higher taxation and labor regulation are reasons why we see more underground activities. 
C) The underground economy includes legal activities that are concealed for the purpose of tax evasion. 
D) all of the above

Question 2

Exhibit 12-A
GDP - Expenditure Approach  
-Refer to Exhibit 12-A.The consumption (C) figure for the year in question is:

Accepted Answer

A) $7,000 billion. 
B) $6,300 billion. 
C) $5,000 billion. 
D) $5,700 billion. 
A) $7,000 billion. 
B) $6,300 billion. 
C) $5,000 billion. 
D) $5,700 billion.

Question 3

Measures of well-being include:

Accepted Answer

A) life expectancy. 
B) infant mortality rates. 
C) literacy rates. 
D) pollution levels. 
E) all of the above. 
A) life expectancy. 
B) infant mortality rates. 
C) literacy rates. 
D) pollution levels. 
E) all of the above.

Question 4

If nominal GDP increased from $4,500 billion in 2000 to $5,000 billion in 2001 and the GDP deflator increased from 100 to 105 over the same time period, what would the 2001 real GDP equal expressed in terms of 2000 dollars?

Accepted Answer

A) $4,285 billion 
B) $4,500 billion 
C) $4,725 billion 
D) $4,762 billion $5,250 billion 
A) $4,285 billion 
B) $4,500 billion 
C) $4,725 billion 
D) $4,762 billion $5,250 billion

Question 5

When measuring economic growth, economists typically focus on per capita real GDP in order to account for variations in the:

Accepted Answer

A) size of the population 
B) price level 
C) quality of goods and services 
D) both A and B above 
E) both B and C above 
A) size of the population 
B) price level 
C) quality of goods and services 
D) both A and B above 
E) both B and C above

Question 6

Which of the following best describes the relationship between economic growth and literacy?

Accepted Answer

A) As the economy grows, literacy declines because it becomes less and less useful in a developed economy. 
B) Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. 
C) Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. 
D) There is no correlation between economic growth and literacy. 
A) As the economy grows, literacy declines because it becomes less and less useful in a developed economy. 
B) Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. 
C) Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education. 
D) There is no correlation between economic growth and literacy.

Question 7

Would companies and individuals invest as much in significant research and development if a system of patents were not available?

Accepted Answer

A) Yes they would, because they could still hope to monopolize the market. 
B) Yes they would, because firms are civic-minded and highly motivated to introduce innovations that improve the standard of living. 
C) No they would not, because if they made a significant investment in the development, they would be unable to protect the innovations or discoveries long enough to be sufficiently compensated for their efforts. 
D) No they would not, because the benefits to society of engaging in research and development would be less than the costs to society. 
A) Yes they would, because they could still hope to monopolize the market. 
B) Yes they would, because firms are civic-minded and highly motivated to introduce innovations that improve the standard of living. 
C) No they would not, because if they made a significant investment in the development, they would be unable to protect the innovations or discoveries long enough to be sufficiently compensated for their efforts. 
D) No they would not, because the benefits to society of engaging in research and development would be less than the costs to society.

Question 8

Which of the following is a new growth economist?

Accepted Answer

A) William Ratliff 
B) Douglas North 
C) Thomas Malthus 
D) Paul Romer 
A) William Ratliff 
B) Douglas North 
C) Thomas Malthus 
D) Paul Romer

Question 9

Table 12-A
 $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Growth Rate } \
\text { (\%) }
\end{array} & \begin{array} { c } 
\text { Years to double } \
\text { econony }
\end{array} \
\hline \text { Nation A } & ? & 14 \
\hline \text { Nation B } & 10 & ? \
\hline \text { Nation C } & ? & 35 \
\hline \text { Nation D } & 7 & ? \
\hline
\end{array}$$
-Refer to Table 12-A.Nation D is expected to double its output in:

Accepted Answer

A) 5 years. 
B) 35 years. 
C) 10 years. 
D) 14 years. 
A) 5 years. 
B) 35 years. 
C) 10 years. 
D) 14 years.

Question 10

When an economy experiences significant economic growth:

Accepted Answer

A) a negative relationship exists between output per capita and adult literacy rates. 
B) an indirect relationship exists between output per capita and adult literacy rates. 
C) a direct relationship exists between output per capita and adult literacy rates. 
D) no observed relationship exists between output per capita and adult literacy rates. 
A) a negative relationship exists between output per capita and adult literacy rates. 
B) an indirect relationship exists between output per capita and adult literacy rates. 
C) a direct relationship exists between output per capita and adult literacy rates. 
D) no observed relationship exists between output per capita and adult literacy rates.

Question 11

In 2008, U.S.GDP totaled approximately:

Accepted Answer

A) $2.1 trillion 
B) $2.8 trillion 
C) $10.1 trillion 
D) $14.3 trillion 
E) none of the above 
A) $2.1 trillion 
B) $2.8 trillion 
C) $10.1 trillion 
D) $14.3 trillion 
E) none of the above

Question 12

Technology can enable producers to economize on:

Accepted Answer

A) labor. 
B) capital. 
C) land. 
D) any of the above. 
A) labor. 
B) capital. 
C) land. 
D) any of the above.

Question 13

For a low-income country to develop into a high-income country, ____ is (are) needed.

Accepted Answer

A) a sustained and rapid expansion in the money supply 
B) sustained economic growth 
C) tax breaks on consumption goods 
D) deflation 
A) a sustained and rapid expansion in the money supply 
B) sustained economic growth 
C) tax breaks on consumption goods 
D) deflation

Question 14

Which of the following is subtracted from net national product to arrive at national income?

Accepted Answer

A) net income of foreigners 
B) depreciation 
C) indirect business taxes 
D) transfer payments 
A) net income of foreigners 
B) depreciation 
C) indirect business taxes 
D) transfer payments

Question 15

Which one of the following will cause the production possibilities curve to shift outward?

Accepted Answer

A) improved public education 
B) improved health care systems 
C) larger budgets for research, development, and exploration 
D) all of the above 
A) improved public education 
B) improved health care systems 
C) larger budgets for research, development, and exploration 
D) all of the above

Question 16

The main difference between GDP and GNP is that GNP excludes:

Accepted Answer

A) net income of foreigners. 
B) consumption of fixed capital. 
C) transfer payments. 
D) government purchases. 
A) net income of foreigners. 
B) consumption of fixed capital. 
C) transfer payments. 
D) government purchases.

Question 17

In the long run, the most important source of increase in a nation's standard of living is a:

Accepted Answer

A) zero rate of population growth. 
B) high rate of economic growth. 
C) high rate of consumption. 
D) high rate of labor force growth. 
A) zero rate of population growth. 
B) high rate of economic growth. 
C) high rate of consumption. 
D) high rate of labor force growth.

Question 18

The ____ shows roughly how long it will take a nation to double its output at various growth rates.

Accepted Answer

A) rule of rapid growth 
B) rule of 70 
C) rule of 1950 
D) duopoly rule 
E) none of the above 
A) rule of rapid growth 
B) rule of 70 
C) rule of 1950 
D) duopoly rule 
E) none of the above

Question 19

The underground economy includes:

Accepted Answer

A) only illegal sources of unreported income. 
B) both legal and illegal sources of unreported income. 
C) both legal and illegal sources of reported income. 
D) payments that are reported to the government. 
A) only illegal sources of unreported income. 
B) both legal and illegal sources of unreported income. 
C) both legal and illegal sources of reported income. 
D) payments that are reported to the government.

Question 20

One of the most important determinants of economic growth is:

Accepted Answer

A) the birth rate. 
B) the rate of infant mortality. 
C) the savings rate. 
D) the unemployment rate. 
A) the birth rate. 
B) the rate of infant mortality. 
C) the savings rate. 
D) the unemployment rate.

Which of the following is true about underground economies?

Exhibit 12-A GDP - Expenditure Approach -Refer to Exhibit 12-A.The consumption (C) figure for the year in question is:

Measures of well-being include:

If nominal GDP increased from $4,500 billion in 2000 to $5,000 billion in 2001 and the GDP deflator increased from 100 to 105 over the same time period, what would the 2001 real GDP equal expressed in terms of 2000 dollars?

When measuring economic growth, economists typically focus on per capita real GDP in order to account for variations in the:

Which of the following best describes the relationship between economic growth and literacy?

Would companies and individuals invest as much in significant research and development if a system of patents were not available?

Which of the following is a new growth economist?

Table 12-A Growth Rate (\%) Years to double econony Nation A ? 14 Nation B 10 ? Nation C ? 35 Nation D 7 ? -Refer to Table 12-A.Nation D is expected to double its output in:

When an economy experiences significant economic growth:

In 2008, U.S.GDP totaled approximately:

Technology can enable producers to economize on:

For a low-income country to develop into a high-income country, ____ is (are) needed.

Which of the following is subtracted from net national product to arrive at national income?

Which one of the following will cause the production possibilities curve to shift outward?

The main difference between GDP and GNP is that GNP excludes:

In the long run, the most important source of increase in a nation's standard of living is a:

The ____ shows roughly how long it will take a nation to double its output at various growth rates.

The underground economy includes:

One of the most important determinants of economic growth is:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters

Exam 12: Economic Growth

Which of the following is true about underground economies?

Exhibit 12-A GDP - Expenditure Approach -Refer to Exhibit 12-A.The consumption (C) figure for the year in question is:

Measures of well-being include:

If nominal GDP increased from $4,500 billion in 2000 to $5,000 billion in 2001 and the GDP deflator increased from 100 to 105 over the same time period, what would the 2001 real GDP equal expressed in terms of 2000 dollars?

When measuring economic growth, economists typically focus on per capita real GDP in order to account for variations in the:

Which of the following best describes the relationship between economic growth and literacy?

Would companies and individuals invest as much in significant research and development if a system of patents were not available?

Which of the following is a new growth economist?

Table 12-A Growth Rate (\%) Years to double econony Nation A ? 14 Nation B 10 ? Nation C ? 35 Nation D 7 ? -Refer to Table 12-A.Nation D is expected to double its output in:

When an economy experiences significant economic growth:

In 2008, U.S.GDP totaled approximately:

Technology can enable producers to economize on:

For a low-income country to develop into a high-income country, ____ is (are) needed.

Which of the following is subtracted from net national product to arrive at national income?

Which one of the following will cause the production possibilities curve to shift outward?

The main difference between GDP and GNP is that GNP excludes:

In the long run, the most important source of increase in a nation's standard of living is a:

The ____ shows roughly how long it will take a nation to double its output at various growth rates.

The underground economy includes:

One of the most important determinants of economic growth is:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters