Question 1

According to the text, Ethiopia probably has a low per capita real Gross Domestic Product (GDP) because

Accepted Answer

A)  it has too many resources. 
B)  it has a corrupt government. 
C)  it has a low rate of saving. 
D)  there are too many skilled workers in the country. 
A)  it has too many resources. 
B)  it has a corrupt government. 
C)  it has a low rate of saving. 
D)  there are too many skilled workers in the country.

Question 2

Per capita real GDP is a measure of

Accepted Answer

A)  economic welfare. 
B)  cost of living standards. 
C)  cultural harmony. 
D)  productive activity. 
A)  economic welfare. 
B)  cost of living standards. 
C)  cultural harmony. 
D)  productive activity.

Question 3

The transformation of an invention into something that benefits the economy is known as

Accepted Answer

A)  an innovation. 
B)  a patent. 
C)  an externality. 
D)  magical growth. 
A)  an innovation. 
B)  a patent. 
C)  an externality. 
D)  magical growth.

Question 4

When the government grants an inventor a patent

Accepted Answer

A)  he has the exclusive right to make, sell or use his invention for 5 years. 
B)  the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. 
C)  the patent holder is guaranteed a profit on his invention. 
D)  the protection of a current invention would increase spending on R&D. 
A)  he has the exclusive right to make, sell or use his invention for 5 years. 
B)  the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others. 
C)  the patent holder is guaranteed a profit on his invention. 
D)  the protection of a current invention would increase spending on R&D.

Question 5

What did Malthus say about population growth?

Accepted Answer

A)  Population growth is the key to a nation's economic growth. 
B)  Population growth is not a problem if food production keeps up, and Malthus predicted that it would. 
C)  Population growth is a huge problem if housing and medical care don't also increase. 
D)  The population would grow faster than food supplies, which would be a recipe for disaster. 
A)  Population growth is the key to a nation's economic growth. 
B)  Population growth is not a problem if food production keeps up, and Malthus predicted that it would. 
C)  Population growth is a huge problem if housing and medical care don't also increase. 
D)  The population would grow faster than food supplies, which would be a recipe for disaster.

Question 6

Which of the following variables can be used to measure labor productivity?

Accepted Answer

A)  real GDP 
B)  number of workers 
C)  number of labor hours 
D)  all of the above 
A)  real GDP 
B)  number of workers 
C)  number of labor hours 
D)  all of the above

Question 7

Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?

Accepted Answer

A)  Countries with higher rates of entrepreneurship have higher rates of poverty. 
B)  Countries with higher rates of entrepreneurship have lower rates of immigration. 
C)  Countries with higher rates of entrepreneurship have lower rates of economic growth. 
D)  Countries that protect the property rights of entrepreneurs will have higher rates of economic growth. 
A)  Countries with higher rates of entrepreneurship have higher rates of poverty. 
B)  Countries with higher rates of entrepreneurship have lower rates of immigration. 
C)  Countries with higher rates of entrepreneurship have lower rates of economic growth. 
D)  Countries that protect the property rights of entrepreneurs will have higher rates of economic growth.

Question 8

When analyzing stages of economic development in the United States, it appears that we have entered the "tertiary stage." This is a stage marked by a shift toward

Accepted Answer

A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  population increases. 
A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  population increases.

Question 9

The term "economic growth" refers to increases in

Accepted Answer

A)  resources use. 
B)  nominal income. 
C)  satisfaction. 
D)  productive capacity. 
A)  resources use. 
B)  nominal income. 
C)  satisfaction. 
D)  productive capacity.

Question 10

Which of the following is a TRUE statement concerning economic growth?

Accepted Answer

A)  Changes in per capita nominal GDP are used to measure economic growth because population growth can distort the figures and we want to use the nominal amounts since that is what people identify with. 
B)  Changes in per capita nominal GDP are used to measure economic growth, but there are serious problems concerning the desirability of using figures that do not account for pollution and urban sprawl. 
C)  Changes in per capita real GDP are used to measure economic growth because this accurately measures all the differences in living standards across countries. 
D)  Changes in per capita real GDP are used to measure economic growth because inflation and population growth can distort nominal GDP figures or total GDP figures. 
A)  Changes in per capita nominal GDP are used to measure economic growth because population growth can distort the figures and we want to use the nominal amounts since that is what people identify with. 
B)  Changes in per capita nominal GDP are used to measure economic growth, but there are serious problems concerning the desirability of using figures that do not account for pollution and urban sprawl. 
C)  Changes in per capita real GDP are used to measure economic growth because this accurately measures all the differences in living standards across countries. 
D)  Changes in per capita real GDP are used to measure economic growth because inflation and population growth can distort nominal GDP figures or total GDP figures.

Question 11

Economic growth is best measured by increases in

Accepted Answer

A)  nominal personal income. 
B)  nominal Gross Domestic Product (GDP). 
C)  per capita real Gross Domestic Product (GDP). 
D)  per capita nominal Gross Domestic Product (GDP). 
A)  nominal personal income. 
B)  nominal Gross Domestic Product (GDP). 
C)  per capita real Gross Domestic Product (GDP). 
D)  per capita nominal Gross Domestic Product (GDP).

Question 12

When economic growth is compared between countries, the best measure to use is

Accepted Answer

A)  nominal GDP. 
B)  real GDP. 
C)  chain-weighted GDP. 
D)  real GDP per capita. 
A)  nominal GDP. 
B)  real GDP. 
C)  chain-weighted GDP. 
D)  real GDP per capita.

Question 13

How does innovation differ from invention? Why is innovation required for economic growth?

Accepted Answer

Innovation involves the transformation o

Question 14

Economic growth occurs as a result of all of the following EXCEPT

Accepted Answer

A)  more labor hours. 
B)  growth of capital. 
C)  technological progress. 
D)  less saving. 
A)  more labor hours. 
B)  growth of capital. 
C)  technological progress. 
D)  less saving.

Question 15

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

Accepted Answer

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

Question 16

Have Malthus' predictions about population growth come TRUE?

Accepted Answer

A)  no, because modern birth control has limited population growth in all nations 
B)  yes, as evidenced by the famine and food shortages affecting every nation today 
C)  no, because the world's food supply has grown much more rapidly than Malthus foresaw 
D)  Yes. The world's food supply, measured by calories per person, continues to fall. 
A)  no, because modern birth control has limited population growth in all nations 
B)  yes, as evidenced by the famine and food shortages affecting every nation today 
C)  no, because the world's food supply has grown much more rapidly than Malthus foresaw 
D)  Yes. The world's food supply, measured by calories per person, continues to fall.

Question 17

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?

Accepted Answer

A)  a decrease in economic growth 
B)  an increase in labor productivity 
C)  a reduction in the saving rate 
D)  an increase in population growth 
A)  a decrease in economic growth 
B)  an increase in labor productivity 
C)  a reduction in the saving rate 
D)  an increase in population growth

Question 18

A system of private property rights

Accepted Answer

A)  encourages economic growth by creating incentives to invest in capital and to be innovative. 
B)  discourages economic growth by discouraging the development of new ideas and ways of doing things. 
C)  reduces the efficiency of government, which reduces the growth rate of the economy over time. 
D)  encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain. 
A)  encourages economic growth by creating incentives to invest in capital and to be innovative. 
B)  discourages economic growth by discouraging the development of new ideas and ways of doing things. 
C)  reduces the efficiency of government, which reduces the growth rate of the economy over time. 
D)  encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.

Question 19

How should per capita real Gross Domestic Product (GDP) be used?

Accepted Answer

A)  It is an accurate measure of economic well-being. 
B)  It is a reasonably good measure of productive activity. 
C)  Per capita real Gross Domestic Product (GDP) is a good gauge of a nation's quality of life because it takes into account a nation's cultural and spiritual values. 
D)  all of the above 
A)  It is an accurate measure of economic well-being. 
B)  It is a reasonably good measure of productive activity. 
C)  Per capita real Gross Domestic Product (GDP) is a good gauge of a nation's quality of life because it takes into account a nation's cultural and spiritual values. 
D)  all of the above

Question 20

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

Accepted Answer

A)  allow the government control of the innovations. 
B)  give confidence to inventors that they will profit from their innovation. 
C)  give confidence to consumers that the products they buy are safe. 
D)  give businesses loans to buy new machinery. 
A)  allow the government control of the innovations. 
B)  give confidence to inventors that they will profit from their innovation. 
C)  give confidence to consumers that the products they buy are safe. 
D)  give businesses loans to buy new machinery.

Exam 9: Global Economic Growth and Development

According to the text, Ethiopia probably has a low per capita real Gross Domestic Product (GDP) because

Per capita real GDP is a measure of

The transformation of an invention into something that benefits the economy is known as

When the government grants an inventor a patent

What did Malthus say about population growth?

Which of the following variables can be used to measure labor productivity?

Entrepreneurs often undertake the innovations that are necessary to bring inventions to the marketplace. Accordingly, what empirical pattern should be expected in an international comparison?

When analyzing stages of economic development in the United States, it appears that we have entered the "tertiary stage." This is a stage marked by a shift toward

The term "economic growth" refers to increases in

Which of the following is a TRUE statement concerning economic growth?

Economic growth is best measured by increases in

When economic growth is compared between countries, the best measure to use is

How does innovation differ from invention? Why is innovation required for economic growth?

Economic growth occurs as a result of all of the following EXCEPT

-Refer to the above table. You have a choice among four alternatives. Choice A lets you invest $250,000 at 4 percent; B lets you invest $125,000 at 6 percent; C lets you invest $62,500 at 8 percent, and D lets you invest $31,250 at 10 percent. Which choice will get you to $1 million faster?

Have Malthus' predictions about population growth come TRUE?

Suppose a country experiences an increase in output per worker. Such a development represents which of the following?

A system of private property rights

How should per capita real Gross Domestic Product (GDP) be used?

Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they

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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