Question 1

As more economic development occurs

Accepted Answer

A)  technological progress slows. 
B)  capital accumulation decreases. 
C)  the population growth rate decreases. 
D)  the population growth rate increases. 
A)  technological progress slows. 
B)  capital accumulation decreases. 
C)  the population growth rate decreases. 
D)  the population growth rate increases.

Question 2

Economic growth will

Accepted Answer

A)  shift the production possibilities curve inward. 
B)  shift the production possibilities curve outward. 
C)  shift along the production possibilities curve toward the X-axis. 
D)  be a movement from inside the productions possibilities curve to the curve itself. 
A)  shift the production possibilities curve inward. 
B)  shift the production possibilities curve outward. 
C)  shift along the production possibilities curve toward the X-axis. 
D)  be a movement from inside the productions possibilities curve to the curve itself.

Question 3

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Accepted Answer

Disagree. Wealthier nations often have s

Question 4

Which of the following is an obstacle to economic development?

Accepted Answer

A)  poorly defined property rights 
B)  foreign direct investment 
C)  immigration 
D)  openness to trade 
A)  poorly defined property rights 
B)  foreign direct investment 
C)  immigration 
D)  openness to trade

Question 5

-Refer to the above table. Which country had the largest increase in per capita real GDP between 2017 and 2018?

Accepted Answer

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

Question 6

Which one of the following describes the current state of economic development in the United States?

Accepted Answer

A)  The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B)  Employment is declining in the manufacturing sector and growing in the service sector. 
C)  Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D)  The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace. 
A)  The United States is running out of natural resources, and therefore it will soon experience a drop in the rate of economic growth. 
B)  Employment is declining in the manufacturing sector and growing in the service sector. 
C)  Employment is declining in the manufacturing sector and growing in the agricultural sector. 
D)  The lack of well-defined property rights in the United States means that entrepreneurs do not expect to capture the benefits of innovations they bring to the marketplace.

Question 7

Economic growth can be defined as a percentage increase in

Accepted Answer

A)  per capita real GDP. 
B)  real GDP. 
C)  nominal GDP. 
D)  consumption by households. 
A)  per capita real GDP. 
B)  real GDP. 
C)  nominal GDP. 
D)  consumption by households.

Question 8

A change in the growth rate of a country of one percentage point annually has

Accepted Answer

A)  very little impact on the economy of a country. 
B)  a large impact in the future due to compounding. 
C)  a small impact in the current year, and smaller impact in the future because of compounding. 
D)  a large impact on the economy in the current year, but not in the future. 
A)  very little impact on the economy of a country. 
B)  a large impact in the future due to compounding. 
C)  a small impact in the current year, and smaller impact in the future because of compounding. 
D)  a large impact on the economy in the current year, but not in the future.

Question 9

-Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year. After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars?

Accepted Answer

A)  B is 8 times larger, or $175,000 larger on a real per capita basis. 
B)  B is 12 times larger, or $230,000 larger on a real per capita basis. 
C)  B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis. 
D)  B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis. 
A)  B is 8 times larger, or $175,000 larger on a real per capita basis. 
B)  B is 12 times larger, or $230,000 larger on a real per capita basis. 
C)  B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis. 
D)  B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis.

Question 10

When comparing across countries, the higher the rate of saving

Accepted Answer

A)  the lower the level of per capita real Gross Domestic Product (GDP). 
B)  the higher the level of per capita real Gross Domestic Product (GDP). 
C)  the less industrialized the country. 
D)  the lower the productivity rates. 
A)  the lower the level of per capita real Gross Domestic Product (GDP). 
B)  the higher the level of per capita real Gross Domestic Product (GDP). 
C)  the less industrialized the country. 
D)  the lower the productivity rates.

Question 11

High economic growth of a country refers to

Accepted Answer

A)  a high level of real Gross Domestic Product (GDP). 
B)  a high level of per capita real Gross Domestic Product (GDP). 
C)  a large increase in per capita real Gross Domestic Product (GDP). 
D)  a large increase in personal income. 
A)  a high level of real Gross Domestic Product (GDP). 
B)  a high level of per capita real Gross Domestic Product (GDP). 
C)  a large increase in per capita real Gross Domestic Product (GDP). 
D)  a large increase in personal income.

Question 12

An educated populace contributes to economic growth because

Accepted Answer

A)  schools provide many jobs for teachers. 
B)  education allows workers to develop skills that increase their productive capabilities. 
C)  educated people are more likely to live in poverty. 
D)  educated people understand the importance of protectionism. 
A)  schools provide many jobs for teachers. 
B)  education allows workers to develop skills that increase their productive capabilities. 
C)  educated people are more likely to live in poverty. 
D)  educated people understand the importance of protectionism.

Question 13

The measurement of economic growth cannot take into account

Accepted Answer

A)  the service sector of an economy. 
B)  productive activity in an economy. 
C)  cultural aspects of life in a country. 
D)  differences in inflation rates across countries. 
A)  the service sector of an economy. 
B)  productive activity in an economy. 
C)  cultural aspects of life in a country. 
D)  differences in inflation rates across countries.

Question 14

-Refer to the above table. Suppose one country has a per capita real GDP of $1000 and another has a per capita real GDP of $10,000, or ten times larger. If both countries have a growth rate of 5 percent, how much larger will per capita real GDP be in the second country be than the first after 50 years?

Accepted Answer

A)  4 times larger 
B)  5 times larger 
C)  8 times larger 
D)  10 times larger 
A)  4 times larger 
B)  5 times larger 
C)  8 times larger 
D)  10 times larger

Question 15

Regarding the role of saving in economic growth, studies indicate that

Accepted Answer

A)  there is a positive relationship between economic growth and saving. 
B)  there is no relationship between economic growth and saving. 
C)  there is a negative relationship between economic growth and saving. 
D)  there is both a positive and a negative relationship between economic growth and saving. 
A)  there is a positive relationship between economic growth and saving. 
B)  there is no relationship between economic growth and saving. 
C)  there is a negative relationship between economic growth and saving. 
D)  there is both a positive and a negative relationship between economic growth and saving.

Question 16

The reason that differences in economic growth rates are important in the long run is that

Accepted Answer

A)  growth compounds over time. 
B)  population naturally shrinks in most countries. 
C)  real GDP usually drops when adjusted for inflation. 
D)  nominal GDP typically increases faster than real GDP. 
A)  growth compounds over time. 
B)  population naturally shrinks in most countries. 
C)  real GDP usually drops when adjusted for inflation. 
D)  nominal GDP typically increases faster than real GDP.

Question 17

Which of the following contributes to economic growth?

Accepted Answer

A)  increase in labor productivity 
B)  increase in consumer spending 
C)  increase in labor regulations restricting the hours of overtime allowed 
D)  increase in environmental protection policies 
A)  increase in labor productivity 
B)  increase in consumer spending 
C)  increase in labor regulations restricting the hours of overtime allowed 
D)  increase in environmental protection policies

Question 18

Free trade

Accepted Answer

A)  hurts economic growth because foreigners are not bound by the same patent laws as we are. 
B)  helps economic growth by encouraging the sharing of technology and industrial ideas. 
C)  hurts economic growth because foreign countries can produce goods with lower labor costs. 
D)  helps economic growth by increasing tariffs. 
A)  hurts economic growth because foreigners are not bound by the same patent laws as we are. 
B)  helps economic growth by encouraging the sharing of technology and industrial ideas. 
C)  hurts economic growth because foreign countries can produce goods with lower labor costs. 
D)  helps economic growth by increasing tariffs.

Question 19

The real GDP in a nation has just increased from $2 billion to $2.1 billion.

Accepted Answer

A)  This country has experienced economic growth because there is a $.1 billion increase in real GDP. 
B)  We do not know if this country experienced economic growth since the increase in the population was not given. 
C)  We do not know if this country experienced economic growth since information on nominal GDP was not given. 
D)  This country did not experience economic growth since $.1 billion is not a large number. 
A)  This country has experienced economic growth because there is a $.1 billion increase in real GDP. 
B)  We do not know if this country experienced economic growth since the increase in the population was not given. 
C)  We do not know if this country experienced economic growth since information on nominal GDP was not given. 
D)  This country did not experience economic growth since $.1 billion is not a large number.

Question 20

Economic growth can be defined as

Accepted Answer

A)  the rate of growth in the productivity of labor. 
B)  the rate of growth in the productivity of capital. 
C)  the rate of growth of labor plus the rate of depreciation of capital. 
D)  the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital. 
A)  the rate of growth in the productivity of labor. 
B)  the rate of growth in the productivity of capital. 
C)  the rate of growth of labor plus the rate of depreciation of capital. 
D)  the rate of growth of labor plus the rate of growth of capital plus the rate of growth in the productivity of labor and capital.

Exam 9: Global Economic Growth and Development

As more economic development occurs

Economic growth will

"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?

Which of the following is an obstacle to economic development?

-Refer to the above table. Which country had the largest increase in per capita real GDP between 2017 and 2018?

Which one of the following describes the current state of economic development in the United States?

Economic growth can be defined as a percentage increase in

A change in the growth rate of a country of one percentage point annually has

-Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year. After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars?

When comparing across countries, the higher the rate of saving

High economic growth of a country refers to

An educated populace contributes to economic growth because

The measurement of economic growth cannot take into account

Regarding the role of saving in economic growth, studies indicate that

The reason that differences in economic growth rates are important in the long run is that

Which of the following contributes to economic growth?

Free trade

The real GDP in a nation has just increased from $2 billion to $2.1 billion.

Economic growth can be defined as

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