Question 1

Which of the following best represents economic growth?

Accepted Answer

A)  a movement down a given production possibilities curve. 
B)  a movement up a given production possibilities curve. 
C)  an outward or, equivalently, a rightward shift of the production possibilities curve. 
D)  an inward or, equivalently, leftward shift of the production possibilities curve. 
A)  a movement down a given production possibilities curve. 
B)  a movement up a given production possibilities curve. 
C)  an outward or, equivalently, a rightward shift of the production possibilities curve. 
D)  an inward or, equivalently, leftward shift of the production possibilities curve.

Question 2

Which of the following will NOT lead to increased capital investment within a country?

Accepted Answer

A)  government ownership of all properties within the country 
B)  increased certainty about private property rights 
C)  the decreased possibility of nationalization of private property 
D)  increased certainty about being able to reap the gains from investing 
A)  government ownership of all properties within the country 
B)  increased certainty about private property rights 
C)  the decreased possibility of nationalization of private property 
D)  increased certainty about being able to reap the gains from investing

Question 3

Economic growth is

Accepted Answer

A)  an increase in the per person real production in a nation. 
B)  an increase in stock market values. 
C)  an increase in real estate values. 
D)  an increase in the number of people employed in agriculture. 
A)  an increase in the per person real production in a nation. 
B)  an increase in stock market values. 
C)  an increase in real estate values. 
D)  an increase in the number of people employed in agriculture.

Question 4

Economic growth occurs when there is

Accepted Answer

A)  growth in technology that increases productivity. 
B)  growth in government spending. 
C)  lower taxes on individuals. 
D)  more environmental regulation. 
A)  growth in technology that increases productivity. 
B)  growth in government spending. 
C)  lower taxes on individuals. 
D)  more environmental regulation.

Question 5

A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

Accepted Answer

A)  an innovation. 
B)  a copyright. 
C)  a patent. 
D)  a trademark. 
A)  an innovation. 
B)  a copyright. 
C)  a patent. 
D)  a trademark.

Question 6

Economic growth can be depicted as

Accepted Answer

A)  a movement up on the production possibilities curve. 
B)  a movement down on the production possibilities curve. 
C)  an outward shift on the production possibilities curve. 
D)  an inward shift on the production possibilities curve. 
A)  a movement up on the production possibilities curve. 
B)  a movement down on the production possibilities curve. 
C)  an outward shift on the production possibilities curve. 
D)  an inward shift on the production possibilities curve.

Question 7

The relationship between the rate of saving and per capita real GDP is

Accepted Answer

A)  positive. 
B)  negative. 
C)  constant. 
D)  not stable. 
A)  positive. 
B)  negative. 
C)  constant. 
D)  not stable.

Question 8

To encourage economic development a country should do all of the following EXCEPT

Accepted Answer

A)  invest in human capital. 
B)  limit the amount of imports allowed into the country. 
C)  allow creative destruction to run its course. 
D)  establish a system of property rights. 
A)  invest in human capital. 
B)  limit the amount of imports allowed into the country. 
C)  allow creative destruction to run its course. 
D)  establish a system of property rights.

Question 9

The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of

Accepted Answer

A)  the amount of money each person has. 
B)  productive activity. 
C)  personal well-being. 
D)  quality of life. 
A)  the amount of money each person has. 
B)  productive activity. 
C)  personal well-being. 
D)  quality of life.

Question 10

The protection of property rights leads to

Accepted Answer

A)  more poverty. 
B)  more illiteracy. 
C)  more capital formation. 
D)  unemployment. 
A)  more poverty. 
B)  more illiteracy. 
C)  more capital formation. 
D)  unemployment.

Question 11

Economic growth may overstate changes in the standard of living if

Accepted Answer

A)  people are retiring at a younger age. 
B)  the average workweek is increasing. 
C)  the number of students attending college is increasing. 
D)  expected life spans are increasing. 
A)  people are retiring at a younger age. 
B)  the average workweek is increasing. 
C)  the number of students attending college is increasing. 
D)  expected life spans are increasing.

Question 12

According to Romer

Accepted Answer

A)  capital drives economic growth. 
B)  invention drives economic growth. 
C)  ideas drive economic growth. 
D)  government drives economic growth. 
A)  capital drives economic growth. 
B)  invention drives economic growth. 
C)  ideas drive economic growth. 
D)  government drives economic growth.

Question 13

Regarding open economies, economists tend to find evidence that

Accepted Answer

A)  the more closed an economy is, the higher the rate of growth the economy will experience. 
B)  trade tariffs tend to improve economic growth. 
C)  free trade encourages a more rapid spread of technology, and hence increases economic growth. 
D)  open economies tend to have access to smaller markets than do closed economies. 
A)  the more closed an economy is, the higher the rate of growth the economy will experience. 
B)  trade tariffs tend to improve economic growth. 
C)  free trade encourages a more rapid spread of technology, and hence increases economic growth. 
D)  open economies tend to have access to smaller markets than do closed economies.

Question 14

According to the new growth theory, economic growth will continue with

Accepted Answer

A)  the development of new ideas. 
B)  increases in population growth. 
C)  development of natural resources. 
D)  an increased focus on labor-intensive jobs. 
A)  the development of new ideas. 
B)  increases in population growth. 
C)  development of natural resources. 
D)  an increased focus on labor-intensive jobs.

Question 15

The development of new products through research and development in new growth theory is important because

Accepted Answer

A)  there can be a positive impact on future growth. 
B)  society's scarce resources are being used when they could be used for current consumption. 
C)  it will lead to a reduction in the savings rate. 
D)  new patents are created. 
A)  there can be a positive impact on future growth. 
B)  society's scarce resources are being used when they could be used for current consumption. 
C)  it will lead to a reduction in the savings rate. 
D)  new patents are created.

Question 16

New growth theory argues that

Accepted Answer

A)  growth is due to the proper government policies concerning interest rates. 
B)  growth relies on maintaining lower growth rates of population, especially in less developed countries. 
C)  technology cannot be looked at as an outside factor without an explanation of what drives it. 
D)  technology is the key factor that explains growth but technology is beyond economic explanation itself. 
A)  growth is due to the proper government policies concerning interest rates. 
B)  growth relies on maintaining lower growth rates of population, especially in less developed countries. 
C)  technology cannot be looked at as an outside factor without an explanation of what drives it. 
D)  technology is the key factor that explains growth but technology is beyond economic explanation itself.

Question 17

Which of the following is TRUE?

Accepted Answer

A)  Real standards of living can increase without any positive economic growth. 
B)  Real growth rates fail to account for by price level changes. 
C)  Real and nominal values are not related. 
D)  Real standards of living decrease with positive economic growth. 
A)  Real standards of living can increase without any positive economic growth. 
B)  Real growth rates fail to account for by price level changes. 
C)  Real and nominal values are not related. 
D)  Real standards of living decrease with positive economic growth.

Question 18

The historical record for the United States since 1900 shows

Accepted Answer

A)  mostly positive economic growth, with two substantial periods of negative economic growth. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per capita real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century. 
A)  mostly positive economic growth, with two substantial periods of negative economic growth. 
B)  economic growth for about half the years and economic decline for the other half. 
C)  growth until 1970 and then a period of constant per capita real GDP. 
D)  continuous economic growth, although at different rates, throughout the entire century.

Question 19

Which of the following is a benefit of economic growth?

Accepted Answer

A)  reduction in illiteracy 
B)  reduction in poverty 
C)  improved health 
D)  all of the above 
A)  reduction in illiteracy 
B)  reduction in poverty 
C)  improved health 
D)  all of the above

Question 20

Which of the following will cause an increase in economic growth?

Accepted Answer

A)  an increase in human capital 
B)  a reduction in the stock of physical capital 
C)  a reduction in the unemployment rate 
D)  a reduction in labor force participation 
A)  an increase in human capital 
B)  a reduction in the stock of physical capital 
C)  a reduction in the unemployment rate 
D)  a reduction in labor force participation

Exam 9: Global Economic Growth and Development

Which of the following best represents economic growth?

Which of the following will NOT lead to increased capital investment within a country?

Economic growth is

Economic growth occurs when there is

A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

Economic growth can be depicted as

The relationship between the rate of saving and per capita real GDP is

To encourage economic development a country should do all of the following EXCEPT

The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of

The protection of property rights leads to

Economic growth may overstate changes in the standard of living if

According to Romer

Regarding open economies, economists tend to find evidence that

According to the new growth theory, economic growth will continue with

The development of new products through research and development in new growth theory is important because

New growth theory argues that

Which of the following is TRUE?

The historical record for the United States since 1900 shows

Which of the following is a benefit of economic growth?

Which of the following will cause an increase in economic growth?

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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