Question 1

New growth theorists believe that increased economic growth is driven by:

Accepted Answer

A) higher level of savings. 
B) higher level of capital investments. 
C) increased foreign investment. 
D) technological innovation and ideas. 
A) higher level of savings. 
B) higher level of capital investments. 
C) increased foreign investment. 
D) technological innovation and ideas.

Question 2

Is it possible to have economic growth with no opportunity cost?

Accepted Answer

A) Yes, economic growth requires no current sacrifices-only the passage of time. 
B) No, but economic growth is always worth whatever sacrifice is required. 
C) No, because growth depletes the stock of knowledge so that more growth today means less growth tomorrow. 
D) No, because growth requires the sacrifice of consumption goods in order to invest in capital formation and research and development. 
A) Yes, economic growth requires no current sacrifices-only the passage of time. 
B) No, but economic growth is always worth whatever sacrifice is required. 
C) No, because growth depletes the stock of knowledge so that more growth today means less growth tomorrow. 
D) No, because growth requires the sacrifice of consumption goods in order to invest in capital formation and research and development.

Question 3

What is the measure of the income received by owners of resources used in making final goods and services?

Accepted Answer

A) factor payments 
B) product payments 
C) indirect earnings 
D) direct earnings 
A) factor payments 
B) product payments 
C) indirect earnings 
D) direct earnings

Question 4

The slower the rate of capital formation:

Accepted Answer

A) the greater the rate of economic growth. 
B) the slower the rate of economic growth. 
C) the greater the rate of population growth. 
D) the slower the rate of growth of the money supply. 
A) the greater the rate of economic growth. 
B) the slower the rate of economic growth. 
C) the greater the rate of population growth. 
D) the slower the rate of growth of the money supply.

Question 5

Output per capita:

Accepted Answer

A) is measured by GDP per capita. 
B) is total output (GDP) divided by the number of persons among whom it will be distributed. 
C) is one measure of the average level of economic well-being in a country. 
D) all of the above are correct. 
A) is measured by GDP per capita. 
B) is total output (GDP) divided by the number of persons among whom it will be distributed. 
C) is one measure of the average level of economic well-being in a country. 
D) all of the above are correct.

Question 6

A price index can fall from one year to the next:

Accepted Answer

A) even when nominal GDP falls. 
B) even when real GDP falls. 
C) even when some individual good's prices rise. 
D) in any of the above circumstances. 
A) even when nominal GDP falls. 
B) even when real GDP falls. 
C) even when some individual good's prices rise. 
D) in any of the above circumstances.

Question 7

Which of the following countries are lacking an abundance of natural resources?

Accepted Answer

A) Australia 
B) Japan 
C) Brazil 
D) United States 
E) Canada 
A) Australia 
B) Japan 
C) Brazil 
D) United States 
E) Canada

Question 8

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

Accepted Answer

A) high rates of inflation 
B) high interest rates 
C) sustained economic growth 
D) restrictions on international trade 
A) high rates of inflation 
B) high interest rates 
C) sustained economic growth 
D) restrictions on international trade

Question 9

The purchase of a new scanner by a computer graphics business is included in which expenditure category of GDP?

Accepted Answer

A) consumption 
B) investment 
C) government purchases 
D) net exports 
E) none of the above 
A) consumption 
B) investment 
C) government purchases 
D) net exports 
E) none of the above

Question 10

Nominal GDP has risen faster than real GDP in the last decade because:

Accepted Answer

A) the price level has increased. 
B) the price level has decreased. 
C) the growth rate of productivity has accelerated. 
D) the volume of foreign trade has expanded sharply. 
E) of the shrinking size of the underground economy relative to the total economy. 
A) the price level has increased. 
B) the price level has decreased. 
C) the growth rate of productivity has accelerated. 
D) the volume of foreign trade has expanded sharply. 
E) of the shrinking size of the underground economy relative to the total economy.

Question 11

If there was an increase in technology, real GDP growth would ____ and real GDP growth per capita would ____:

Accepted Answer

A) increase; increase. 
B) increase; be indeterminate. 
C) decrease; decrease. 
D) decrease; be indeterminate 
A) increase; increase. 
B) increase; be indeterminate. 
C) decrease; decrease. 
D) decrease; be indeterminate

Question 12

Allowing free trade can lead to greater output because of the principle of:

Accepted Answer

A) absolute advantage. 
B) rule of 70. 
C) comparative advantage. 
D) scarcity. 
A) absolute advantage. 
B) rule of 70. 
C) comparative advantage. 
D) scarcity.

Question 13

Which of the following affects the rate of economic growth?

Accepted Answer

A) the quality of available resources. 
B) the quantity of available resources. 
C) technological change. 
D) all of the above. 
A) the quality of available resources. 
B) the quantity of available resources. 
C) technological change. 
D) all of the above.

Question 14

The formula from the expenditure method indicates that GDP is equal to:

Accepted Answer

A) C + I - G - X - M 
B) C + I - G + X - M 
C) C + I + G + X - M 
D) C + I + G + M - X 
A) C + I - G - X - M 
B) C + I - G + X - M 
C) C + I + G + X - M 
D) C + I + G + M - X

Question 15

Economic growth is measured by the:

Accepted Answer

A) advancement in the quality of a nation's technology. 
B) rate of business investment and capital formation. 
C) annual percentage change in per capita real output of goods and services. 
D) marginal change in nominal output divided by total output from the previous year. 
A) advancement in the quality of a nation's technology. 
B) rate of business investment and capital formation. 
C) annual percentage change in per capita real output of goods and services. 
D) marginal change in nominal output divided by total output from the previous year.

Question 16

The era of Prohibition began in 1920 when the Volstead Act was passed to implement the Eighteenth Amendment to the Constitution, which prohibited the production and sale of liquor and beer.In 1920 much of this activity went underground, and Al Capone became a leading illegal entrepreneur.Assuming the amount of liquor and beer produced stayed the same, what was the effect of the Volstead Act on the GDP in 1920?

Accepted Answer

A) GDP would have declined, since activities in the underground economy are not included. 
B) GDP would have remained the same, since only the organization producing the goods changed. 
C) GDP would have increased, because production in the underground economy increased. 
D) Real GDP would have increased, while nominal GDP would have decreased. 
A) GDP would have declined, since activities in the underground economy are not included. 
B) GDP would have remained the same, since only the organization producing the goods changed. 
C) GDP would have increased, because production in the underground economy increased. 
D) Real GDP would have increased, while nominal GDP would have decreased.

Question 17

If real GDP is increasing more rapidly than the population, then:

Accepted Answer

A) interest rates must be falling. 
B) the economy must be experiencing inflation. 
C) per capita real GDP will be increasing. 
D) per capita real GDP will be decreasing. 
A) interest rates must be falling. 
B) the economy must be experiencing inflation. 
C) per capita real GDP will be increasing. 
D) per capita real GDP will be decreasing.

Question 18

U.S.nominal GDP:

Accepted Answer

A) has historically increased more slowly than real GDP. 
B) has historically increased more rapidly than real GDP. 
C) includes an estimate of the value of leisure time. 
D) includes an estimate of underground productive activity. 
E) has historically increased at the same pace as real GDP. 
A) has historically increased more slowly than real GDP. 
B) has historically increased more rapidly than real GDP. 
C) includes an estimate of the value of leisure time. 
D) includes an estimate of underground productive activity. 
E) has historically increased at the same pace as real GDP.

Question 19

Which is greater, gross domestic product or national income? By how much?

Accepted Answer

A) Gross domestic product  National income; net exports and indirect business taxes 
D) Gross domestic product > National income; indirect business taxes, depreciation, and income earned by foreigners in the United States 
A) Gross domestic product  National income; net exports and indirect business taxes 
D) Gross domestic product > National income; indirect business taxes, depreciation, and income earned by foreigners in the United States

Question 20

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.Which nation enjoys the highest growth rate?

Accepted Answer

A) Nation A 
B) Nation B 
C) Nation C 
D) Nation D 
A) Nation A 
B) Nation B 
C) Nation C 
D) Nation D

New growth theorists believe that increased economic growth is driven by:

Is it possible to have economic growth with no opportunity cost?

What is the measure of the income received by owners of resources used in making final goods and services?

The slower the rate of capital formation:

Output per capita:

A price index can fall from one year to the next:

Which of the following countries are lacking an abundance of natural resources?

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

The purchase of a new scanner by a computer graphics business is included in which expenditure category of GDP?

Nominal GDP has risen faster than real GDP in the last decade because:

If there was an increase in technology, real GDP growth would and real GDP growth per capita would :

Allowing free trade can lead to greater output because of the principle of:

Which of the following affects the rate of economic growth?

The formula from the expenditure method indicates that GDP is equal to:

Economic growth is measured by the:

If real GDP is increasing more rapidly than the population, then:

U.S.nominal GDP:

Which is greater, gross domestic product or national income? By how much?

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.Which nation enjoys the highest growth rate?

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

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Exam 12: Economic Growth

New growth theorists believe that increased economic growth is driven by:

Is it possible to have economic growth with no opportunity cost?

What is the measure of the income received by owners of resources used in making final goods and services?

The slower the rate of capital formation:

Output per capita:

A price index can fall from one year to the next:

Which of the following countries are lacking an abundance of natural resources?

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

The purchase of a new scanner by a computer graphics business is included in which expenditure category of GDP?

Nominal GDP has risen faster than real GDP in the last decade because:

If there was an increase in technology, real GDP growth would ____ and real GDP growth per capita would ____:

Allowing free trade can lead to greater output because of the principle of:

Which of the following affects the rate of economic growth?

The formula from the expenditure method indicates that GDP is equal to:

Economic growth is measured by the:

If real GDP is increasing more rapidly than the population, then:

U.S.nominal GDP:

Which is greater, gross domestic product or national income? By how much?

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.Which nation enjoys the highest growth rate?

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

If there was an increase in technology, real GDP growth would and real GDP growth per capita would :