Question 1

By dividing a country's value of total domestic output by its number of workers, economists can measure

Accepted Answer

A)  the net domestic product. 
B)  labor productivity. 
C)  the size of the labor force. 
D)  the rate of capital accumulation. 
A)  the net domestic product. 
B)  labor productivity. 
C)  the size of the labor force. 
D)  the rate of capital accumulation.

Question 2

Real standards of living can increase

Accepted Answer

A)  if the country is producing the same amount they traditionally have and are enjoying more leisure time. 
B)  only if there is positive economic growth. 
C)  if there is positive growth in the manufacturing sector. 
D)  only at the cost of increased urban congestion. 
A)  if the country is producing the same amount they traditionally have and are enjoying more leisure time. 
B)  only if there is positive economic growth. 
C)  if there is positive growth in the manufacturing sector. 
D)  only at the cost of increased urban congestion.

Question 3

To raise economic development, developing countries should

Accepted Answer

A)  focus on their comparative advantage. 
B)  focus on producing service goods. 
C)  produce goods that are capital intensive and not labor intensive. 
D)  not focus on economic growth. 
A)  focus on their comparative advantage. 
B)  focus on producing service goods. 
C)  produce goods that are capital intensive and not labor intensive. 
D)  not focus on economic growth.

Question 4

Whenever average output produced per worker during a specific time-period increases, then

Accepted Answer

A)  leisure time increases. 
B)  nominal GDP decreases. 
C)  labor productivity increases. 
D)  the standard of living goes down. 
A)  leisure time increases. 
B)  nominal GDP decreases. 
C)  labor productivity increases. 
D)  the standard of living goes down.

Question 5

According to the text, European countries' growth rates of real GDP per capita

Accepted Answer

A)  decreased during each of the four decades beginning 1980. 
B)  remained constant during each of the four decades beginning 1980. 
C)  decreased in the first two decades after 1980 and then increased in the following two decades. 
D)  followed a random pattern during the four decades beginning 1980. 
A)  decreased during each of the four decades beginning 1980. 
B)  remained constant during each of the four decades beginning 1980. 
C)  decreased in the first two decades after 1980 and then increased in the following two decades. 
D)  followed a random pattern during the four decades beginning 1980.

Question 6

Which of the following is TRUE of trends in the number of new U.S. patents?

Accepted Answer

A)  There was a steady increase in new patents throughout the 1970s. 
B)  There was a surge in new patents in the latter part of the 1990s. 
C)  The number of new patents granted each year has remained unchanged since the early 1970s. 
D)  The number of new patents granted each year declined by more than 50 percent after 2001. 
A)  There was a steady increase in new patents throughout the 1970s. 
B)  There was a surge in new patents in the latter part of the 1990s. 
C)  The number of new patents granted each year has remained unchanged since the early 1970s. 
D)  The number of new patents granted each year declined by more than 50 percent after 2001.

Question 7

Labor productivity increases when

Accepted Answer

A)  the population increases. 
B)  output increases even if the labor force has decreased. 
C)  output increases at the same rate as the labor force increases. 
D)  output increases faster than population increases. 
A)  the population increases. 
B)  output increases even if the labor force has decreased. 
C)  output increases at the same rate as the labor force increases. 
D)  output increases faster than population increases.

Question 8

It can be argued that Thomas Malthus' An Essay on the Principle of Population statement that population growth will always outstrip food production has been discredited due to

Accepted Answer

A)  an increase in the world-wide farming population. 
B)  less world-wide food consumption. 
C)  improvement in technology of food production. 
D)  a reduction in resource scarcity. 
A)  an increase in the world-wide farming population. 
B)  less world-wide food consumption. 
C)  improvement in technology of food production. 
D)  a reduction in resource scarcity.

Question 9

Economic growth depends on

Accepted Answer

A)  low tax rates. 
B)  high government spending. 
C)  high rates of consumption. 
D)  increases in the capital stock as a result of saving. 
A)  low tax rates. 
B)  high government spending. 
C)  high rates of consumption. 
D)  increases in the capital stock as a result of saving.

Question 10

Countries with higher rates of saving

Accepted Answer

A)  experience lower growth rates in the future. 
B)  have a large population. 
C)  have a greater number of poor people. 
D)  have higher rates of growth. 
A)  experience lower growth rates in the future. 
B)  have a large population. 
C)  have a greater number of poor people. 
D)  have higher rates of growth.

Question 11

-Refer to the above table. If an economy's current per capita real GDP is $3,000, and if its economy grows at an constant annual rate of 5 percent for 50 years, what will be its per capita real GDP at the end of that period?

Accepted Answer

A)  $13,140 
B)  $21,330 
C)  $34,500 
D)  $55,200 
A)  $13,140 
B)  $21,330 
C)  $34,500 
D)  $55,200

Question 12

Improvements in information technology over the past decade have enhanced labor productivity. What has been a likely result of this change?

Accepted Answer

A)  Capital productivity has declined. 
B)  Unemployment has increased. 
C)  The rate of economic growth has increased. 
D)  Entrepreneurs no longer have an incentive to invest in information technology. 
A)  Capital productivity has declined. 
B)  Unemployment has increased. 
C)  The rate of economic growth has increased. 
D)  Entrepreneurs no longer have an incentive to invest in information technology.

Question 13

Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that

Accepted Answer

A)  life expectancies are the same in both countries. 
B)  economic well being is the same in both countries. 
C)  living standards may differ in the two countries because we don't know how income is distributed in the countries. 
D)  living standards in the two countries are probably identical, or very close to each other. 
A)  life expectancies are the same in both countries. 
B)  economic well being is the same in both countries. 
C)  living standards may differ in the two countries because we don't know how income is distributed in the countries. 
D)  living standards in the two countries are probably identical, or very close to each other.

Question 14

Labor productivity increases when

Accepted Answer

A)  the average number of hours people work goes up. 
B)  the unemployment rate decreases. 
C)  the average output produced per worker during a specified time period increases. 
D)  the average output produced per worker during a specified time period decreases. 
A)  the average number of hours people work goes up. 
B)  the unemployment rate decreases. 
C)  the average output produced per worker during a specified time period increases. 
D)  the average output produced per worker during a specified time period decreases.

Question 15

According to new growth theory, as technology becomes more important to growth, so does

Accepted Answer

A)  human capital. 
B)  military spending. 
C)  increasing taxes. 
D)  increasing trade barriers. 
A)  human capital. 
B)  military spending. 
C)  increasing taxes. 
D)  increasing trade barriers.

Question 16

Which resource is the main contributor to economic growth in the United States, Latin America, and South Asia?

Accepted Answer

A)  growth in physical capital 
B)  growth in human capital 
C)  growth in labor 
D)  growth in natural resources 
A)  growth in physical capital 
B)  growth in human capital 
C)  growth in labor 
D)  growth in natural resources

Question 17

What is economic growth and why are growth rates so important?

Accepted Answer

Economic growth is measured by increases

Question 18

For developing countries, one of the more effective ways to become more developed is

Accepted Answer

A)  to invest in human capital. 
B)  to invest more in the military. 
C)  to increase trade barriers. 
D)  to reduce direct foreign investment. 
A)  to invest in human capital. 
B)  to invest more in the military. 
C)  to increase trade barriers. 
D)  to reduce direct foreign investment.

Question 19

Is it possible to see gains in a nation's real standard of living without any positive economic growth?

Accepted Answer

A)  No, a nation's standard of living cannot improve without economic growth. 
B)  Yes, but only if the government prints more money so people feel rich. 
C)  Yes, if workers can produce the same level of output in fewer work hours, so that more leisure time could push up the real standard of living. 
D)  None of the above: Economic growth has nothing to do with a nation's standard of living. 
A)  No, a nation's standard of living cannot improve without economic growth. 
B)  Yes, but only if the government prints more money so people feel rich. 
C)  Yes, if workers can produce the same level of output in fewer work hours, so that more leisure time could push up the real standard of living. 
D)  None of the above: Economic growth has nothing to do with a nation's standard of living.

Question 20

Suppose per capita real GDP grows by 10% per year. Based on the Rule of 70, approximately how many years will it take for the level of per capita real GDP to double?

Accepted Answer

A)  70 years 
B)  7 years 
C)  10 years 
D)  none of the above 
A)  70 years 
B)  7 years 
C)  10 years 
D)  none of the above

Exam 9: Global Economic Growth and Development

By dividing a country's value of total domestic output by its number of workers, economists can measure

Real standards of living can increase

To raise economic development, developing countries should

Whenever average output produced per worker during a specific time-period increases, then

According to the text, European countries' growth rates of real GDP per capita

Which of the following is TRUE of trends in the number of new U.S. patents?

Labor productivity increases when

It can be argued that Thomas Malthus' An Essay on the Principle of Population statement that population growth will always outstrip food production has been discredited due to

Economic growth depends on

Countries with higher rates of saving

-Refer to the above table. If an economy's current per capita real GDP is $3,000, and if its economy grows at an constant annual rate of 5 percent for 50 years, what will be its per capita real GDP at the end of that period?

Improvements in information technology over the past decade have enhanced labor productivity. What has been a likely result of this change?

Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that

Labor productivity increases when

According to new growth theory, as technology becomes more important to growth, so does

Which resource is the main contributor to economic growth in the United States, Latin America, and South Asia?

What is economic growth and why are growth rates so important?

For developing countries, one of the more effective ways to become more developed is

Is it possible to see gains in a nation's real standard of living without any positive economic growth?

Suppose per capita real GDP grows by 10% per year. Based on the Rule of 70, approximately how many years will it take for the level of per capita real GDP to double?

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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