Question 1

Which of the following statements is TRUE about the relationship between high birthrates and real GDP growth?

Accepted Answer

A)  High birthrates in countries with little economic freedom will lead to higher labor force participation rates that in turn lead to higher growth of real GDP. 
B)  High birthrates reduce per capita incomes, and a lack of economic freedom inhibits real GDP growth. 
C)  There is no relationship between birthrates and real GDP growth. 
D)  The influence that birthrates have on real GDP growth is the same in countries whether or not economic freedom exits. 
A)  High birthrates in countries with little economic freedom will lead to higher labor force participation rates that in turn lead to higher growth of real GDP. 
B)  High birthrates reduce per capita incomes, and a lack of economic freedom inhibits real GDP growth. 
C)  There is no relationship between birthrates and real GDP growth. 
D)  The influence that birthrates have on real GDP growth is the same in countries whether or not economic freedom exits.

Question 2

Which of the following is TRUE about the World Bank?

Accepted Answer

A)  It is a multinational agency that specializes in development loans. 
B)  It is a U.S. agency that specializes in development loans. 
C)  It is a U.N. sponsored agency that specializes in development loans. 
D)  It is made up of all central banks in the world. 
A)  It is a multinational agency that specializes in development loans. 
B)  It is a U.S. agency that specializes in development loans. 
C)  It is a U.N. sponsored agency that specializes in development loans. 
D)  It is made up of all central banks in the world.

Question 3

The significance of dead capital is that

Accepted Answer

A)  it is difficult to allocate to its most efficient use. 
B)  its fixed cost is too high. 
C)  it costs too much to acquire. 
D)  it replaces too many workers. 
A)  it is difficult to allocate to its most efficient use. 
B)  its fixed cost is too high. 
C)  it costs too much to acquire. 
D)  it replaces too many workers.

Question 4

The international organization with the sole goal of promoting global antipoverty efforts is the

Accepted Answer

A)  World Bank. 
B)  International Monetary Fund. 
C)  Board of Governors of the Federal Reserve System. 
D)  GAE. 
A)  World Bank. 
B)  International Monetary Fund. 
C)  Board of Governors of the Federal Reserve System. 
D)  GAE.

Question 5

The official mission of the World Bank is to

Accepted Answer

A)  fight global inflation. 
B)  advise member nations on the appropriate levels of taxation. 
C)  establish exchange rates between the currencies of member nations. 
D)  provide funding for needed development projects that would have difficulty attracting private investment. 
A)  fight global inflation. 
B)  advise member nations on the appropriate levels of taxation. 
C)  establish exchange rates between the currencies of member nations. 
D)  provide funding for needed development projects that would have difficulty attracting private investment.

Question 6

International investors are more likely to invest in countries

Accepted Answer

A)  where it is relatively easier to establish property rights to capital goods. 
B)  where there is a significant amount of dead capital. 
C)  which have a high amount of government inefficiency. 
D)  where there are barriers to the ownership of capital goods. 
A)  where it is relatively easier to establish property rights to capital goods. 
B)  where there is a significant amount of dead capital. 
C)  which have a high amount of government inefficiency. 
D)  where there are barriers to the ownership of capital goods.

Question 7

According to the text, a typical resident born in an advanced nation in the early 1980s would

Accepted Answer

A)  experience a lower level of per capital real GDP by 2000. 
B)  experience two times larger in per capital real GDP by 2000. 
C)  experience three times larger in per capital real GDP by 2000. 
D)  experience almost the same per capital real GDP by 2000. 
A)  experience a lower level of per capital real GDP by 2000. 
B)  experience two times larger in per capital real GDP by 2000. 
C)  experience three times larger in per capital real GDP by 2000. 
D)  experience almost the same per capital real GDP by 2000.

Question 8

The following are impediments to economic growth EXCEPT

Accepted Answer

A)  dead capital. 
B)  human capital development. 
C)  lack of economic freedom. 
D)  bureaucratic inefficiency. 
A)  dead capital. 
B)  human capital development. 
C)  lack of economic freedom. 
D)  bureaucratic inefficiency.

Question 9

Both the World Bank and the IMF typically

Accepted Answer

A)  make loans for less than 5 years only. 
B)  impose stringent preconditions that the borrowers must meet. 
C)  charge lower than average loan rates to ensure repayment. 
D)  charge higher than average loan rates. 
A)  make loans for less than 5 years only. 
B)  impose stringent preconditions that the borrowers must meet. 
C)  charge lower than average loan rates to ensure repayment. 
D)  charge higher than average loan rates.

Question 10

Population growth is more likely to contribute to economic growth when

Accepted Answer

A)  economic freedom is present. 
B)  capital accumulation is limited. 
C)  technological progress is limited. 
D)  the labor force participation rate does not increase. 
A)  economic freedom is present. 
B)  capital accumulation is limited. 
C)  technological progress is limited. 
D)  the labor force participation rate does not increase.

Question 11

When an international financial crisis occurs

Accepted Answer

A)  financial lenders protect their investments by pouring money into the ailing country. 
B)  investors sell off bonds and restrict loans as a mechanism to help the country recover. 
C)  financial flows can slow to a trickle, influencing economic growth. 
D)  there are no serious financial effects that last more than a few months. 
A)  financial lenders protect their investments by pouring money into the ailing country. 
B)  investors sell off bonds and restrict loans as a mechanism to help the country recover. 
C)  financial flows can slow to a trickle, influencing economic growth. 
D)  there are no serious financial effects that last more than a few months.

Question 12

Discuss the rationales for foreign financing of investment in developing actions and explain how developing countries benefit from international capital investment.

Accepted Answer

The primary motivation for foreign inves

Question 13

The World Bank is

Accepted Answer

A)  made up of the central banks of the leading industrial nations of the world. 
B)  made up of five separate institutions. 
C)  the Bank of the United Nations. 
D)  the European Union. 
A)  made up of the central banks of the leading industrial nations of the world. 
B)  made up of five separate institutions. 
C)  the Bank of the United Nations. 
D)  the European Union.

Question 14

Which of the following is a barrier to economic growth in many developing nations?

Accepted Answer

A)  the shortage of labor 
B)  the lack of natural resources 
C)  the lack of economic freedom 
D)  the low level of restrictions in the labor market 
A)  the shortage of labor 
B)  the lack of natural resources 
C)  the lack of economic freedom 
D)  the low level of restrictions in the labor market

Question 15

Approximately what percentage of the World Bank's loans go to developing nations in the the entire Africa continent?

Accepted Answer

A)  5% 
B)  34% 
C)  70% 
D)  100% 
A)  5% 
B)  34% 
C)  70% 
D)  100%

Question 16

Which of the following is NOT a criticism that has been leveled at the World Bank?

Accepted Answer

A)  Too many loans go to nations capable of privately financing their projects. 
B)  Since 1990, the World Bank has loaned mostly to African countries, to the detriment of nations in other parts of the world. 
C)  Some countries receiving World Bank loans are net lenders of funds to other nations and so should not be receiving World Bank funds. 
D)  Despite receiving loans from the World Bank, economic growth in many client nations has been disappointing. 
A)  Too many loans go to nations capable of privately financing their projects. 
B)  Since 1990, the World Bank has loaned mostly to African countries, to the detriment of nations in other parts of the world. 
C)  Some countries receiving World Bank loans are net lenders of funds to other nations and so should not be receiving World Bank funds. 
D)  Despite receiving loans from the World Bank, economic growth in many client nations has been disappointing.

Question 17

The World Bank will primarily make

Accepted Answer

A)  short-term loans for investment projects that are relatively safe. 
B)  short-term loans for investment projects which might not receive private financial support. 
C)  long-term loans for investment projects that are relatively risky. 
D)  long-term in nature for investment projects which might not receive private financial support. 
A)  short-term loans for investment projects that are relatively safe. 
B)  short-term loans for investment projects which might not receive private financial support. 
C)  long-term loans for investment projects that are relatively risky. 
D)  long-term in nature for investment projects which might not receive private financial support.

Question 18

Which of the following statements is TRUE?

Accepted Answer

A)  All nations that belong to the International Monetary Fund have equal voting power. 
B)  The voting power of a nation in the International Monetary Fund is determined by its quota subscription. 
C)  The voting power of a nation in the International Monetary Fund is called special drawing rights. 
D)  The voting procedure in the International Fund is determined by the World Bank. 
A)  All nations that belong to the International Monetary Fund have equal voting power. 
B)  The voting power of a nation in the International Monetary Fund is determined by its quota subscription. 
C)  The voting power of a nation in the International Monetary Fund is called special drawing rights. 
D)  The voting procedure in the International Fund is determined by the World Bank.

Question 19

Economic growth is measured by

Accepted Answer

A)  the annual percentage change in nominal GDP. 
B)  the annual percentage change in the unemployment rate. 
C)  the annual percentage change in per capita nominal GDP. 
D)  the annual percentage change in per capita real GDP. 
A)  the annual percentage change in nominal GDP. 
B)  the annual percentage change in the unemployment rate. 
C)  the annual percentage change in per capita nominal GDP. 
D)  the annual percentage change in per capita real GDP.

Question 20

If the average annual growth rate in real GDP for a nation during the last decade was 4 percent per year and the average annual population growth rate was 2 percent per year during the same period, then the average annual growth rate of per capita GDP was

Accepted Answer

A)  2 percent. 
B)  -2 percent. 
C)  6 percent. 
D)  0 percent. 
A)  2 percent. 
B)  -2 percent. 
C)  6 percent. 
D)  0 percent.

Exam 18: Policies and Prospects for Global Economic Growth

Which of the following statements is TRUE about the relationship between high birthrates and real GDP growth?

Which of the following is TRUE about the World Bank?

The significance of dead capital is that

The international organization with the sole goal of promoting global antipoverty efforts is the

The official mission of the World Bank is to

International investors are more likely to invest in countries

According to the text, a typical resident born in an advanced nation in the early 1980s would

The following are impediments to economic growth EXCEPT

Both the World Bank and the IMF typically

Population growth is more likely to contribute to economic growth when

When an international financial crisis occurs

Discuss the rationales for foreign financing of investment in developing actions and explain how developing countries benefit from international capital investment.

The World Bank is

Which of the following is a barrier to economic growth in many developing nations?

Approximately what percentage of the World Bank's loans go to developing nations in the the entire Africa continent?

Which of the following is NOT a criticism that has been leveled at the World Bank?

The World Bank will primarily make

Which of the following statements is TRUE?

Economic growth is measured by

If the average annual growth rate in real GDP for a nation during the last decade was 4 percent per year and the average annual population growth rate was 2 percent per year during the same period, then the average annual growth rate of per capita GDP was

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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