Question 1

Other things held constant, higher saving rates lead to

Accepted Answer

A)  a lower standard of living. 
B)  increases in the number of hours workers work. 
C)  decreases in real per capita GDP. 
D)  higher living standards. 
A)  a lower standard of living. 
B)  increases in the number of hours workers work. 
C)  decreases in real per capita GDP. 
D)  higher living standards. D

Question 2

A government grant that gives an inventor the exclusive right or privilege to make, use, or sell his or her invention is known as

Accepted Answer

A)  a positive externality. 
B)  a negative externality. 
C)  a protectionism clause. 
D)  a patent. 
A)  a positive externality. 
B)  a negative externality. 
C)  a protectionism clause. 
D)  a patent. D

Question 3

Innovation is

Accepted Answer

A)  always financed by the government. 
B)  an invention financed by the sale of bonds. 
C)  the transformation of an invention into something useful. 
D)  an invention financed by the sale of stock certificates. 
A)  always financed by the government. 
B)  an invention financed by the sale of bonds. 
C)  the transformation of an invention into something useful. 
D)  an invention financed by the sale of stock certificates. C

Question 4

-Refer to the above table. Two countries have per capita real GDPs in 2015 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2065?

Accepted Answer

A)  A: $40,000; B: $60,000 
B)  A: $35,550; B: $57,500 
C)  A: $24,000; B: $35,200 
D)  A: $15,000; B: $30,000 
A)  A: $40,000; B: $60,000 
B)  A: $35,550; B: $57,500 
C)  A: $24,000; B: $35,200 
D)  A: $15,000; B: $30,000

Question 5

According to Romer and other new growth theorists, what could poor countries do to stimulate greater economic growth?

Accepted Answer

According to new growth theory, poor cou

Question 6

An example of a cost of economic growth is

Accepted Answer

A)  longer life spans. 
B)  political instability. 
C)  alienation. 
D)  increases in illiteracy. 
A)  longer life spans. 
B)  political instability. 
C)  alienation. 
D)  increases in illiteracy.

Question 7

The formula for the computation of labor productivity is

Accepted Answer

A)  real GDP/population. 
B)  real GDP/number of workers. 
C)  nominal GDP/population. 
D)  nominal GDP/number of workers. 
A)  real GDP/population. 
B)  real GDP/number of workers. 
C)  nominal GDP/population. 
D)  nominal GDP/number of workers.

Question 8

Economists have found that as a nation's per capita real Gross Domestic Product (GDP) increases

Accepted Answer

A)  the rate of population growth declines. 
B)  the rate of population growth experiences dramatic increases. 
C)  there is no effect on population growth. 
D)  the rate of population growth increases at the same rate as economic growth. 
A)  the rate of population growth declines. 
B)  the rate of population growth experiences dramatic increases. 
C)  there is no effect on population growth. 
D)  the rate of population growth increases at the same rate as economic growth.

Question 9

All of the following are listed in the text as being keys to economic development EXCEPT

Accepted Answer

A)  a system of property rights. 
B)  an educated population. 
C)  an open economy. 
D)  a higher level of protectionism. 
A)  a system of property rights. 
B)  an educated population. 
C)  an open economy. 
D)  a higher level of protectionism.

Question 10

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has

Accepted Answer

A)  decreased. 
B)  increased. 
C)  stayed the same. 
D)  decreased in the manufacturing sector but increased in the service sector. 
A)  decreased. 
B)  increased. 
C)  stayed the same. 
D)  decreased in the manufacturing sector but increased in the service sector.

Question 11

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Accepted Answer

A)  plentiful natural resources 
B)  openness to international trade 
C)  an educated population 
D)  All of the above are correct. 
A)  plentiful natural resources 
B)  openness to international trade 
C)  an educated population 
D)  All of the above are correct.

Question 12

A small reduction in a country's growth rate is a concern to policy makers because

Accepted Answer

A)  a small change can have large effects on per capita GDP over time. 
B)  a reduction usually leads to future reductions until finally the economy stagnates. 
C)  policy makers focus too much on economic growth and not enough on increasing savings rates. 
D)  the larger GDP is the better the economic welfare will be in the future. 
A)  a small change can have large effects on per capita GDP over time. 
B)  a reduction usually leads to future reductions until finally the economy stagnates. 
C)  policy makers focus too much on economic growth and not enough on increasing savings rates. 
D)  the larger GDP is the better the economic welfare will be in the future.

Question 13

Which of the following is NOT associated with the new growth theory?

Accepted Answer

A)  natural resources 
B)  research 
C)  technology 
D)  innovation 
A)  natural resources 
B)  research 
C)  technology 
D)  innovation

Question 14

Foreign residents can benefit from U.S. research and development activity because

Accepted Answer

A)  they ignore U.S. patent laws and steal the technology. 
B)  they can import the goods, obtaining inputs at lower cost than they would otherwise. 
C)  countries usually share patented ideas. 
D)  patents do a poor job of protecting the inventor. 
A)  they ignore U.S. patent laws and steal the technology. 
B)  they can import the goods, obtaining inputs at lower cost than they would otherwise. 
C)  countries usually share patented ideas. 
D)  patents do a poor job of protecting the inventor.

Question 15

One important factor that affects economic growth is

Accepted Answer

A)  the amount of money supply. 
B)  the rate of saving. 
C)  which political party is in power. 
D)  the number of workers in heavy industry. 
A)  the amount of money supply. 
B)  the rate of saving. 
C)  which political party is in power. 
D)  the number of workers in heavy industry.

Question 16

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?

Accepted Answer

A)  Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does. 
B)  Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C)  Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains. 
D)  Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth. 
A)  Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does. 
B)  Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated. 
C)  Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains. 
D)  Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth.

Question 17

Which one of the following does NOT appear to contribute to economic growth?

Accepted Answer

A)  innovation 
B)  knowledge 
C)  protectionism 
D)  a system of well-defined property rights 
A)  innovation 
B)  knowledge 
C)  protectionism 
D)  a system of well-defined property rights

Question 18

What is the real GDP after four years if Country Utopia's average annual growth rate is 8.6 percent and the initial real GDP was $2,756.0 million?

Accepted Answer

A)  $2,993.0 million 
B)  $3,833.5 million 
C)  $1,077.5 million 
D)  $3,250.4 million 
A)  $2,993.0 million 
B)  $3,833.5 million 
C)  $1,077.5 million 
D)  $3,250.4 million

Question 19

Improvements in labor productivity

Accepted Answer

A)  affect the level of wages, but do not affect the rate of economic growth. 
B)  affect the level of profit, but do not affect the rate of economic growth. 
C)  hinder economic growth, because they cause unemployment. 
D)  contribute to economic growth. 
A)  affect the level of wages, but do not affect the rate of economic growth. 
B)  affect the level of profit, but do not affect the rate of economic growth. 
C)  hinder economic growth, because they cause unemployment. 
D)  contribute to economic growth.

Question 20

Research indicates that

Accepted Answer

A)  countries with lower tariff rates experience higher rates of economic growth. 
B)  countries with lower tariff rates experience lower rates of economic growth. 
C)  there is no relationship between the level of tariff rates and economic growth. 
D)  countries with higher tariff rates experience higher rates of economic growth. 
A)  countries with lower tariff rates experience higher rates of economic growth. 
B)  countries with lower tariff rates experience lower rates of economic growth. 
C)  there is no relationship between the level of tariff rates and economic growth. 
D)  countries with higher tariff rates experience higher rates of economic growth.

Exam 9: Global Economic Growth and Development

Other things held constant, higher saving rates lead to

A government grant that gives an inventor the exclusive right or privilege to make, use, or sell his or her invention is known as

Innovation is

-Refer to the above table. Two countries have per capita real GDPs in 2015 of $5000. If country A has a 4 percent growth rate and Country B a 5 percent growth rate, what will the per capita real GDPs of each be in the year 2065?

According to Romer and other new growth theorists, what could poor countries do to stimulate greater economic growth?

An example of a cost of economic growth is

The formula for the computation of labor productivity is

Economists have found that as a nation's per capita real Gross Domestic Product (GDP) increases

All of the following are listed in the text as being keys to economic development EXCEPT

The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

A small reduction in a country's growth rate is a concern to policy makers because

Which of the following is NOT associated with the new growth theory?

Foreign residents can benefit from U.S. research and development activity because

One important factor that affects economic growth is

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?

Which one of the following does NOT appear to contribute to economic growth?

What is the real GDP after four years if Country Utopia's average annual growth rate is 8.6 percent and the initial real GDP was $2,756.0 million?

Improvements in labor productivity

Research indicates that

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters