Question 1

Economic freedom is

Accepted Answer

A)  important in leading to positive economic growth. 
B)  not an important factor in leading to positive economic growth. 
C)  a confusing concept since the more economic freedom residents in a country have the lower the level of economic growth. 
D)  a concept in theory since no country has pure economic freedom and therefore cannot be analyzed with respect to economic growth. 
A)  important in leading to positive economic growth. 
B)  not an important factor in leading to positive economic growth. 
C)  a confusing concept since the more economic freedom residents in a country have the lower the level of economic growth. 
D)  a concept in theory since no country has pure economic freedom and therefore cannot be analyzed with respect to economic growth.

Question 2

Countries with the highest degrees of governmental bureaucratic inefficiency index

Accepted Answer

A)  typically are nations with the highest real GDP per capita. 
B)  typically are nations with the lowest real GDP per capita. 
C)  normally have the lowest measured levels of dead capital. 
D)  normally have the highest measured levels of economic freedom. 
A)  typically are nations with the highest real GDP per capita. 
B)  typically are nations with the lowest real GDP per capita. 
C)  normally have the lowest measured levels of dead capital. 
D)  normally have the highest measured levels of economic freedom.

Question 3

An example of foreign direct investment is the

Accepted Answer

A)  domestic acquisition of less than 10 percent of a foreign company. 
B)  foreign purchase of an entire domestic company. 
C)  purchase of livestock from abroad. 
D)  sale of insurance in a foreign nation. 
A)  domestic acquisition of less than 10 percent of a foreign company. 
B)  foreign purchase of an entire domestic company. 
C)  purchase of livestock from abroad. 
D)  sale of insurance in a foreign nation.

Question 4

The tolerance of bribe-taking by government officials

Accepted Answer

A)  reduces economic uncertainty because all investors are aware of the practice. 
B)  reduces economic efficiency because rules governing property rights are not regularly enforced. 
C)  reduces government expenditures because public employees can be paid less. 
D)  reduces the need for government to impose taxes on poor people. 
A)  reduces economic uncertainty because all investors are aware of the practice. 
B)  reduces economic efficiency because rules governing property rights are not regularly enforced. 
C)  reduces government expenditures because public employees can be paid less. 
D)  reduces the need for government to impose taxes on poor people.

Question 5

The per capita real GDP is the

Accepted Answer

A)  rate of growth in real GDP plus the population growth rate. 
B)  real GDP divided by the population. 
C)  rate of growth in real GDP times the population growth rate. 
D)  rate of growth in real GDP minus the population growth rate. 
A)  rate of growth in real GDP plus the population growth rate. 
B)  real GDP divided by the population. 
C)  rate of growth in real GDP times the population growth rate. 
D)  rate of growth in real GDP minus the population growth rate.

Question 6

The World Bank specializes in making loans to

Accepted Answer

A)  industrialized nations. 
B)  communist nations. 
C)  developing nations. 
D)  African nations. 
A)  industrialized nations. 
B)  communist nations. 
C)  developing nations. 
D)  African nations.

Question 7

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 3 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

A)  0 percent 
B)  3 percent 
C)  -6 percent 
D)  6 percent 
A)  0 percent 
B)  3 percent 
C)  -6 percent 
D)  6 percent

Question 8

According to the text, how has the global shift in economic growth occurred since 2000?

Accepted Answer

A)  High economic growth has shifted from emerging nations to developing nations. 
B)  Economic growth has shifted downward for all nations in the world. 
C)  High economic growth has shifted from advanced nations to emerging nations. 
D)  Emerging and developing nations have experienced negative economic growth rates while advanced nations have continued to experience high economic growth rates. 
A)  High economic growth has shifted from emerging nations to developing nations. 
B)  Economic growth has shifted downward for all nations in the world. 
C)  High economic growth has shifted from advanced nations to emerging nations. 
D)  Emerging and developing nations have experienced negative economic growth rates while advanced nations have continued to experience high economic growth rates.

Question 9

Those who advocate a role for the World Bank in establishing systems of well-defined property and contract rights in developing nations would argue that

Accepted Answer

A)  such changes would eliminate the need for long-term capital funding. 
B)  such changes would eliminate the need for short-term loans. 
C)  such changes would make these economies more productive. 
D)  asymmetric information is currently not a problem in these countries. 
A)  such changes would eliminate the need for long-term capital funding. 
B)  such changes would eliminate the need for short-term loans. 
C)  such changes would make these economies more productive. 
D)  asymmetric information is currently not a problem in these countries.

Question 10

Dead capital is

Accepted Answer

A)  a capital resource that lacks a clear title of ownership. 
B)  a capital resource that is obsolete. 
C)  a capital resource that is used to produce non-competitive products. 
D)  a capital resource associated with the defense industry. 
A)  a capital resource that lacks a clear title of ownership. 
B)  a capital resource that is obsolete. 
C)  a capital resource that is used to produce non-competitive products. 
D)  a capital resource associated with the defense industry.

Question 11

A nation's account with the IMF is called its

Accepted Answer

A)  deposit surplus. 
B)  current account. 
C)  quota subscription. 
D)  capital account. 
A)  deposit surplus. 
B)  current account. 
C)  quota subscription. 
D)  capital account.

Question 12

The International Monetary Fund (IMF) was created to achieve each of the following goals EXCEPT

Accepted Answer

A)  to supervise exchange-rate practices of member countries. 
B)  to help finance economic development in poor countries. 
C)  to encourage convertibility of member countries' currencies. 
D)  to lend funds to countries having difficulties meeting their international payment obligations. 
A)  to supervise exchange-rate practices of member countries. 
B)  to help finance economic development in poor countries. 
C)  to encourage convertibility of member countries' currencies. 
D)  to lend funds to countries having difficulties meeting their international payment obligations.

Question 13

There is a(n) ________ relationship between a nation's rate of growth in real GDP per capita and bureaucratic inefficiency.

Accepted Answer

A)  direct 
B)  inverse 
C)  proportional 
D)  undefined 
A)  direct 
B)  inverse 
C)  proportional 
D)  undefined

Question 14

Which of the following statements is TRUE about the success of the World Bank?

Accepted Answer

A)  The World Bank has been very successful in promoting economic growth because loans have been primarily made to countries that have trouble attracting private funds. 
B)  The World Bank has not been successful because many loans have been made to countries that can attract private funds. 
C)  The World Bank has been successful because it has focused on its primary function of making loans to governments. 
D)  The World Bank has not been successful because it has focused on making loans to governments where there has been a loss of confidence in a nation's financial system. 
A)  The World Bank has been very successful in promoting economic growth because loans have been primarily made to countries that have trouble attracting private funds. 
B)  The World Bank has not been successful because many loans have been made to countries that can attract private funds. 
C)  The World Bank has been successful because it has focused on its primary function of making loans to governments. 
D)  The World Bank has not been successful because it has focused on making loans to governments where there has been a loss of confidence in a nation's financial system.

Question 15

Portfolio investment means the

Accepted Answer

A)  purchase of all shares of multiple companies in another country. 
B)  purchase of less than 50 percent of the shares of ownership in a company in another country. 
C)  purchase of more than 80 percent of the shares of ownership in a company in another country. 
D)  purchase of less than 10 percent of the shares of ownership in a company in another country. 
A)  purchase of all shares of multiple companies in another country. 
B)  purchase of less than 50 percent of the shares of ownership in a company in another country. 
C)  purchase of more than 80 percent of the shares of ownership in a company in another country. 
D)  purchase of less than 10 percent of the shares of ownership in a company in another country.

Question 16

Define what dead capital is and why economists are concerned with its existence.

Accepted Answer

Dead capital is when capital resources l

Question 17

Which one of the following statements is TRUE?

Accepted Answer

A)  Dead capital is most frequently found in countries with well-defined property rights. 
B)  Dead capital is most frequently found in the most prosperous countries. 
C)  It is easy for dead capital resources to be allocated to their best possible use. 
D)  It is difficult for dead capital resources to be insured or traded. 
A)  Dead capital is most frequently found in countries with well-defined property rights. 
B)  Dead capital is most frequently found in the most prosperous countries. 
C)  It is easy for dead capital resources to be allocated to their best possible use. 
D)  It is difficult for dead capital resources to be insured or traded.

Question 18

The goal of the World Bank is to

Accepted Answer

A)  supervise exchange rate stability. 
B)  supervise the activities of the central banks of member nations. 
C)  sell the government securities of member nations on the open market. 
D)  help finance economic development. 
A)  supervise exchange rate stability. 
B)  supervise the activities of the central banks of member nations. 
C)  sell the government securities of member nations on the open market. 
D)  help finance economic development.

Question 19

Dead capital is

Accepted Answer

A)  unlikely to have any productive use. 
B)  unlikely to be applied to its most efficient use. 
C)  useful only if employed in a labor-intensive production process. 
D)  useful only if employed in a capital-intensive production process. 
A)  unlikely to have any productive use. 
B)  unlikely to be applied to its most efficient use. 
C)  useful only if employed in a labor-intensive production process. 
D)  useful only if employed in a capital-intensive production process.

Question 20

A nation's account with the International Monetary Fund denominated in special drawing rights is

Accepted Answer

A)  the quota subscription. 
B)  the account at the World Bank. 
C)  portfolio investment. 
D)  the account at the Fed. 
A)  the quota subscription. 
B)  the account at the World Bank. 
C)  portfolio investment. 
D)  the account at the Fed.

Exam 18: Policies and Prospects for Global Economic Growth

Economic freedom is

Countries with the highest degrees of governmental bureaucratic inefficiency index

An example of foreign direct investment is the

The tolerance of bribe-taking by government officials

The per capita real GDP is the

The World Bank specializes in making loans to

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 3 percent per year and the annual rate of population growth is 3 percent?

According to the text, how has the global shift in economic growth occurred since 2000?

Those who advocate a role for the World Bank in establishing systems of well-defined property and contract rights in developing nations would argue that

Dead capital is

A nation's account with the IMF is called its

The International Monetary Fund (IMF) was created to achieve each of the following goals EXCEPT

There is a(n) ________ relationship between a nation's rate of growth in real GDP per capita and bureaucratic inefficiency.

Which of the following statements is TRUE about the success of the World Bank?

Portfolio investment means the

Define what dead capital is and why economists are concerned with its existence.

Which one of the following statements is TRUE?

The goal of the World Bank is to

Dead capital is

A nation's account with the International Monetary Fund denominated in special drawing rights 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

Global Economic Growth and Development

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

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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