Question 1

There are a number of benefits that usually accompany economic growth. The following are such benefits EXCEPT

Accepted Answer

A)  increase in literacy. 
B)  increased expected life-spans. 
C)  political stability. 
D)  urban congestion. 
A)  increase in literacy. 
B)  increased expected life-spans. 
C)  political stability. 
D)  urban congestion.

Question 2

Using a production possibilities curve, economic growth is represented by

Accepted Answer

A)  an outward shift in the curve. 
B)  a movement along the curve. 
C)  an inward shift of the curve. 
D)  a pivot of the curve. 
A)  an outward shift in the curve. 
B)  a movement along the curve. 
C)  an inward shift of the curve. 
D)  a pivot of the curve.

Question 3

In order for a nation to be able to consume more in the future, it needs to

Accepted Answer

A)  consume less today in aggregate and save the difference between consumption and income. 
B)  consume more today in aggregate and borrow the difference between consumption and income. 
C)  produce more today in aggregate and save the difference between consumption and production. 
D)  produce less today in aggregate and save the difference between consumption and income. 
A)  consume less today in aggregate and save the difference between consumption and income. 
B)  consume more today in aggregate and borrow the difference between consumption and income. 
C)  produce more today in aggregate and save the difference between consumption and production. 
D)  produce less today in aggregate and save the difference between consumption and income.

Question 4

Labor productivity rises when

Accepted Answer

A)  average worker output falls. 
B)  business investment falls. 
C)  average worker output rises. 
D)  nominal wages fall. 
A)  average worker output falls. 
B)  business investment falls. 
C)  average worker output rises. 
D)  nominal wages fall.

Question 5

Well-defined property rights give entrepreneurs the incentive to

Accepted Answer

A)  engage in risky business endeavors in order to accumulate future wealth. 
B)  use the eminent domain laws to seize property for public use. 
C)  lobby Congress in order to increase environmental regulations. 
D)  evade taxes. 
A)  engage in risky business endeavors in order to accumulate future wealth. 
B)  use the eminent domain laws to seize property for public use. 
C)  lobby Congress in order to increase environmental regulations. 
D)  evade taxes.

Question 6

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

Accepted Answer

A)  the growth of capital and labor productivity 
B)  the growth of the capital stock 
C)  the growth of the labor force 
D)  increases in the price level 
A)  the growth of capital and labor productivity 
B)  the growth of the capital stock 
C)  the growth of the labor force 
D)  increases in the price level

Question 7

Labor productivity is commonly measured as

Accepted Answer

A)  the number of workers divided by real GDP. 
B)  the change in real GDP divided by change in number of workers. 
C)  nominal GDP divided by number of workers. 
D)  real GDP divided by number of workers. 
A)  the number of workers divided by real GDP. 
B)  the change in real GDP divided by change in number of workers. 
C)  nominal GDP divided by number of workers. 
D)  real GDP divided by number of workers.

Question 8

An important foundation of the new growth theory is that

Accepted Answer

A)  we will get more technological advances the more the government is involved. 
B)  we will get more technological advances when the rewards for producing them are greater. 
C)  the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. 
D)  improvements in labor productivity are poor measures of technological growth. 
A)  we will get more technological advances the more the government is involved. 
B)  we will get more technological advances when the rewards for producing them are greater. 
C)  the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth. 
D)  improvements in labor productivity are poor measures of technological growth.

Question 9

According to many economists, as nations become wealthier, the average size of family

Accepted Answer

A)  increases. 
B)  decreases. 
C)  does not change. 
D)  increases first and then decreases later. 
A)  increases. 
B)  decreases. 
C)  does not change. 
D)  increases first and then decreases later.

Question 10

Which of the following is a negative effect of economic growth?

Accepted Answer

A)  higher inflation 
B)  higher unemployment 
C)  environmental pollution 
D)  all of the above 
A)  higher inflation 
B)  higher unemployment 
C)  environmental pollution 
D)  all of the above

Question 11

Other things being equal, a higher saving rate

Accepted Answer

A)  leads to higher interest rates. 
B)  means higher standards of living in the future. 
C)  means higher standards of living today. 
D)  is associated with a decline in the rate of growth of the population. 
A)  leads to higher interest rates. 
B)  means higher standards of living in the future. 
C)  means higher standards of living today. 
D)  is associated with a decline in the rate of growth of the population.

Question 12

According to the World Bank and the International Monetary Fund, which of the following countries has shown the greatest rate of economic growth in the past two decades?

Accepted Answer

A)  China 
B)  Germany 
C)  United States 
D)  Mexico 
A)  China 
B)  Germany 
C)  United States 
D)  Mexico

Question 13

Which of the following is NOT an important factor affecting economic growth?

Accepted Answer

A)  the rate of saving 
B)  the growth of leisure 
C)  the rate of growth of capital 
D)  the rate of growth in labor productivity 
A)  the rate of saving 
B)  the growth of leisure 
C)  the rate of growth of capital 
D)  the rate of growth in labor productivity

Question 14

Explain how the "new growth theory" treats technology differently from the way economists used to treat technology.

Accepted Answer

Technology used to be treated as an outs

Question 15

Trade between countries should be

Accepted Answer

A)  encouraged for developed countries but not for developing countries. 
B)  encouraged for both developed and developing countries. 
C)  discouraged for developed countries but encouraged for developing countries. 
D)  discouraged for both developed and developing countries. 
A)  encouraged for developed countries but not for developing countries. 
B)  encouraged for both developed and developing countries. 
C)  discouraged for developed countries but encouraged for developing countries. 
D)  discouraged for both developed and developing countries.

Question 16

All of the following unambiguously contribute to economic growth EXCEPT

Accepted Answer

A)  increase in human capital. 
B)  increase in technology. 
C)  increase in labor productivity. 
D)  increase in government spending. 
A)  increase in human capital. 
B)  increase in technology. 
C)  increase in labor productivity. 
D)  increase in government spending.

Question 17

According to the text, all of the following are possible causes of recent secular stagnation among advanced countries EXCEPT

Accepted Answer

A)  increases in trade barriers such as tariffs. 
B)  low growth of productivity growth. 
C)  reduced payoffs from human capital investments. 
D)  increased governmental and regulatory policies. 
A)  increases in trade barriers such as tariffs. 
B)  low growth of productivity growth. 
C)  reduced payoffs from human capital investments. 
D)  increased governmental and regulatory policies.

Question 18

Which of the following statements is NOT true about using per capita real GDP to measure a nation's economic growth?

Accepted Answer

A)  The definition does not indicate how the increase in growth is being disturbed among the nation's population. 
B)  The definition assumes that some of the increase in productivity goes to the poor. 
C)  The definition has understated actual economic growth because it does not take into consideration changes in leisure. 
D)  The definition is not perfect for measuring increases in a nation's productive capacity. 
A)  The definition does not indicate how the increase in growth is being disturbed among the nation's population. 
B)  The definition assumes that some of the increase in productivity goes to the poor. 
C)  The definition has understated actual economic growth because it does not take into consideration changes in leisure. 
D)  The definition is not perfect for measuring increases in a nation's productive capacity.

Question 19

All of the following are factors that raise economic development EXCEPT

Accepted Answer

A)  establishing a legal system. 
B)  an educated work force. 
C)  reducing trade barriers. 
D)  government control of the country's resources. 
A)  establishing a legal system. 
B)  an educated work force. 
C)  reducing trade barriers. 
D)  government control of the country's resources.

Question 20

An economy that is an active participant in international trade is

Accepted Answer

A)  an egalitarian economy. 
B)  a closed economy. 
C)  an economy whose currency value fluctuates widely. 
D)  an open economy. 
A)  an egalitarian economy. 
B)  a closed economy. 
C)  an economy whose currency value fluctuates widely. 
D)  an open economy.

Exam 9: Global Economic Growth and Development

There are a number of benefits that usually accompany economic growth. The following are such benefits EXCEPT

Using a production possibilities curve, economic growth is represented by

In order for a nation to be able to consume more in the future, it needs to

Labor productivity rises when

Well-defined property rights give entrepreneurs the incentive to

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

Labor productivity is commonly measured as

An important foundation of the new growth theory is that

According to many economists, as nations become wealthier, the average size of family

Which of the following is a negative effect of economic growth?

Other things being equal, a higher saving rate

According to the World Bank and the International Monetary Fund, which of the following countries has shown the greatest rate of economic growth in the past two decades?

Which of the following is NOT an important factor affecting economic growth?

Explain how the "new growth theory" treats technology differently from the way economists used to treat technology.

Trade between countries should be

All of the following unambiguously contribute to economic growth EXCEPT

According to the text, all of the following are possible causes of recent secular stagnation among advanced countries EXCEPT

Which of the following statements is NOT true about using per capita real GDP to measure a nation's economic growth?

All of the following are factors that raise economic development EXCEPT

An economy that is an active participant in international trade is

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

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