Question 1

Economic freedom is present,at least in part,when

Accepted Answer

A) there are no property rights to limit people's freedom. 
B) there is no private property. 
C) people are able to make personal choices. 
D) there is no government. 
E) money is free. 
A) there are no property rights to limit people's freedom. 
B) there is no private property. 
C) people are able to make personal choices. 
D) there is no government. 
E) money is free.

Question 2

A key reason why some countries are growing very slowly is

Accepted Answer

A) they lack a democratic government. 
B) they lack economic freedom. 
C) their inflation rate is too high. 
D) they are too poor,so there is no saving. 
E) there is too much competition within their economies. 
A) they lack a democratic government. 
B) they lack economic freedom. 
C) their inflation rate is too high. 
D) they are too poor,so there is no saving. 
E) there is too much competition within their economies.

Question 3

Human capital refers to the

Accepted Answer

A) accumulated skill and knowledge of human beings. 
B) accumulated equipment used by human beings. 
C) accumulation of money by human beings. 
D) accumulation of money and equipment used by human beings. 
E) accumulated financial capital people have acquired. 
A) accumulated skill and knowledge of human beings. 
B) accumulated equipment used by human beings. 
C) accumulation of money by human beings. 
D) accumulation of money and equipment used by human beings. 
E) accumulated financial capital people have acquired.

Question 4

Which of the following are required for economic growth?
I.more goods and services produced per hour of work
Ii.an increase in the average hours of labor per person
Iii.an increase in prices

Accepted Answer

A) i and iii 
B) i and ii 
C) ii and iii 
D) i only 
E) ii only 
A) i and iii 
B) i and ii 
C) ii and iii 
D) i only 
E) ii only

Question 5

At its most basic level,economic growth depends on

Accepted Answer

A) creating the right incentives. 
B) saving by the government. 
C) government leadership. 
D) government's fixing prices to encourage stability. 
E) political freedom. 
A) creating the right incentives. 
B) saving by the government. 
C) government leadership. 
D) government's fixing prices to encourage stability. 
E) political freedom.

Question 6

According to the Rule of 70,if a country grows at 2.0 percent per year instead of 1.5 percent per year,how many fewer years will it take to double its level of real GDP?

Accepted Answer

A) It will take 11.6 years fewer. 
B) It will take 35 years fewer. 
C) It will take 58.3 years fewer. 
D) It will take 20 years fewer. 
E) It will take 17.9 years fewer. 
A) It will take 11.6 years fewer. 
B) It will take 35 years fewer. 
C) It will take 58.3 years fewer. 
D) It will take 20 years fewer. 
E) It will take 17.9 years fewer.

Question 7

The quantity of labor demanded by a firm depends upon

Accepted Answer

A) the nominal wage rate not the real wage rate. 
B) the real wage rate not the nominal wage rate. 
C) both the real wage rate and the nominal wage rate. 
D) neither the real wage rate nor the nominal wage rate. 
E) either the real wage rate or the nominal wage rate,depending whether the price level is increasing or decreasing. 
A) the nominal wage rate not the real wage rate. 
B) the real wage rate not the nominal wage rate. 
C) both the real wage rate and the nominal wage rate. 
D) neither the real wage rate nor the nominal wage rate. 
E) either the real wage rate or the nominal wage rate,depending whether the price level is increasing or decreasing.

Question 8

Potential GDP is

Accepted Answer

A) equal to the maximum amount of goods and services that can be produced at any given time. 
B) another name for real GDP. 
C) the level of output produced when the economy is fully employed. 
D) a measure of the short term fluctuations in real GDP. 
E) another name for nominal GDP. 
A) equal to the maximum amount of goods and services that can be produced at any given time. 
B) another name for real GDP. 
C) the level of output produced when the economy is fully employed. 
D) a measure of the short term fluctuations in real GDP. 
E) another name for nominal GDP.

Question 9

The fastest growing nations today

Accepted Answer

A) are not saving but instead are investing. 
B) have erected many trade barriers to protect domestic firms. 
C) have the fastest growing exports and imports. 
D) have non-democratic political systems. 
E) have the government directing all their research and development. 
A) are not saving but instead are investing. 
B) have erected many trade barriers to protect domestic firms. 
C) have the fastest growing exports and imports. 
D) have non-democratic political systems. 
E) have the government directing all their research and development.

Question 10

Diminishing returns,so that each additional hour of labor employed produces successively smaller additional amounts of real GDP,exist because

Accepted Answer

A) labor is not very productive. 
B) extra labor produces more output. 
C) all other factors are held fixed. 
D) the price level rises as more workers are employed. 
E) additional workers are paid higher wage rates. 
A) labor is not very productive. 
B) extra labor produces more output. 
C) all other factors are held fixed. 
D) the price level rises as more workers are employed. 
E) additional workers are paid higher wage rates.

Question 11

For economic freedom to exist,

Accepted Answer

A) copyright laws must be abolished and markets supervised by the government. 
B) democracy must exist. 
C) property rights must be protected and markets must be free. 
D) human capital must be given away free. 
E) money must be free. 
A) copyright laws must be abolished and markets supervised by the government. 
B) democracy must exist. 
C) property rights must be protected and markets must be free. 
D) human capital must be given away free. 
E) money must be free.

Question 12

The presence of government corruption in some countries

Accepted Answer

A) slows their economic growth. 
B) speeds their economic growth. 
C) invalidates the new growth theory's predictions. 
D) supports the classical growth theory's predictions. 
E) invalidates the neoclassical growth theory's predictions. 
A) slows their economic growth. 
B) speeds their economic growth. 
C) invalidates the new growth theory's predictions. 
D) supports the classical growth theory's predictions. 
E) invalidates the neoclassical growth theory's predictions.

Question 13

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year,the growth rate of real GDP per person is

Accepted Answer

A) 3 + 2.5 = 5.5 percent per year. 
B) [(3 - 2.5)÷ 2.5] × 100 = 20 percent per year. 
C) [(2.5 - 3)÷ 3] × 100 = 16.6 percent per year. 
D) 3 - 2.5 = 0.5 percent per year. 
E) 2.5 - 3 = -0.5 percent per year. 
A) 3 + 2.5 = 5.5 percent per year. 
B) [(3 - 2.5)÷ 2.5] × 100 = 20 percent per year. 
C) [(2.5 - 3)÷ 3] × 100 = 16.6 percent per year. 
D) 3 - 2.5 = 0.5 percent per year. 
E) 2.5 - 3 = -0.5 percent per year.

Question 14

Hong Kong is an example of an economy that

Accepted Answer

A) does not experience economic growth because it is not a democracy. 
B) experiences economic growth in spite of the fact that is lacks democratic freedom. 
C) grows more slowly than other Asian countries because property rights are not valued. 
D) needs to promote investment so that economic growth can occur. 
E) lacks economic freedom and therefore experiences the slowest economic growth of all developed economies. 
A) does not experience economic growth because it is not a democracy. 
B) experiences economic growth in spite of the fact that is lacks democratic freedom. 
C) grows more slowly than other Asian countries because property rights are not valued. 
D) needs to promote investment so that economic growth can occur. 
E) lacks economic freedom and therefore experiences the slowest economic growth of all developed economies.

Question 15

Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is ________ because of the ________.

Accepted Answer

A) 2000-2010;the war on terror 
B) 1990-2000;fear of Y2K 
C) 1930-1940;Great Depression 
D) 2000-2010;2008/2009 deep recession 
E) 2010-2020;Keynesian economic policies being used more frequently than in the 1930s 
A) 2000-2010;the war on terror 
B) 1990-2000;fear of Y2K 
C) 1930-1940;Great Depression 
D) 2000-2010;2008/2009 deep recession 
E) 2010-2020;Keynesian economic policies being used more frequently than in the 1930s

Question 16

If Kenya institutes policies that support economic freedom and growth,it is likely that Kenya will

Accepted Answer

A) immediately reap the benefits of double digit increase in economic growth. 
B) immediately reap the benefits of a 4 percent to 6 percent increase in economic growth. 
C) slowly reap the benefits of economic growth as the economy grows over time. 
D) lose control of the economy and plunge into a long recession. 
E) suffer from too much competition within its economy. 
A) immediately reap the benefits of double digit increase in economic growth. 
B) immediately reap the benefits of a 4 percent to 6 percent increase in economic growth. 
C) slowly reap the benefits of economic growth as the economy grows over time. 
D) lose control of the economy and plunge into a long recession. 
E) suffer from too much competition within its economy.

Question 17

-U.S.real GDP per person grew rapidly in the early 1960s.The table above has U.S.real GDP and population for 1961 and 1962.
a.What was U.S.real GDP per person in 1961?
b.What was U.S.real GDP per person in 1962?
c.Between 1961 and 1962,how rapidly did U.S.real GDP per person grow?

Accepted Answer

a.U.S.real GDP per person in 1961 = ($2,

Question 18

Jose and Julia were discussing the necessary components to achieve economic growth.Jose stated that the economy must include free markets,specialization and trade,and an ethical judicial system.Julia reminded Jose that another key component is

Accepted Answer

A) freedom of speech. 
B) freedom of religion. 
C) a guaranteed high rate of return on savings. 
D) property rights. 
E) democracy. 
A) freedom of speech. 
B) freedom of religion. 
C) a guaranteed high rate of return on savings. 
D) property rights. 
E) democracy.

Question 19

The Keynesian macroeconomic model states that

Accepted Answer

A) the economy is inherently unstable and government intervention is required to maintain continued economic growth. 
B) markets work efficiently to produce the best macroeconomic outcomes. 
C) fluctuations in the quantity of money are responsible for most economic recessions. 
D) changes in technology generate business cycles. 
E) the economy is fairly stable. 
A) the economy is inherently unstable and government intervention is required to maintain continued economic growth. 
B) markets work efficiently to produce the best macroeconomic outcomes. 
C) fluctuations in the quantity of money are responsible for most economic recessions. 
D) changes in technology generate business cycles. 
E) the economy is fairly stable.

Question 20

If it took 20 years for real GDP to double,what was the growth rate of real GDP?

Accepted Answer

A) 4.5 percent 
B) 3.0 percent 
C) 3.5 percent 
D) 4 percent 
E) 5 percent 
A) 4.5 percent 
B) 3.0 percent 
C) 3.5 percent 
D) 4 percent 
E) 5 percent

Economic freedom is present,at least in part,when

A key reason why some countries are growing very slowly is

Human capital refers to the

Which of the following are required for economic growth? I.more goods and services produced per hour of work Ii.an increase in the average hours of labor per person Iii.an increase in prices

At its most basic level,economic growth depends on

According to the Rule of 70,if a country grows at 2.0 percent per year instead of 1.5 percent per year,how many fewer years will it take to double its level of real GDP?

The quantity of labor demanded by a firm depends upon

Potential GDP is

The fastest growing nations today

Diminishing returns,so that each additional hour of labor employed produces successively smaller additional amounts of real GDP,exist because

For economic freedom to exist,

The presence of government corruption in some countries

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year,the growth rate of real GDP per person is

Hong Kong is an example of an economy that

Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is because of the .

If Kenya institutes policies that support economic freedom and growth,it is likely that Kenya will

-U.S.real GDP per person grew rapidly in the early 1960s.The table above has U.S.real GDP and population for 1961 and 1962. a.What was U.S.real GDP per person in 1961? b.What was U.S.real GDP per person in 1962? c.Between 1961 and 1962,how rapidly did U.S.real GDP per person grow?

Jose and Julia were discussing the necessary components to achieve economic growth.Jose stated that the economy must include free markets,specialization and trade,and an ethical judicial system.Julia reminded Jose that another key component is

The Keynesian macroeconomic model states that

If it took 20 years for real GDP to double,what was the growth rate of real GDP?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 17: Potential Gdp and Economic Growth

Economic freedom is present,at least in part,when

A key reason why some countries are growing very slowly is

Human capital refers to the

Which of the following are required for economic growth? I.more goods and services produced per hour of work Ii.an increase in the average hours of labor per person Iii.an increase in prices

At its most basic level,economic growth depends on

According to the Rule of 70,if a country grows at 2.0 percent per year instead of 1.5 percent per year,how many fewer years will it take to double its level of real GDP?

The quantity of labor demanded by a firm depends upon

Potential GDP is

The fastest growing nations today

Diminishing returns,so that each additional hour of labor employed produces successively smaller additional amounts of real GDP,exist because

For economic freedom to exist,

The presence of government corruption in some countries

If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year,the growth rate of real GDP per person is

Hong Kong is an example of an economy that

Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is ________ because of the ________.

If Kenya institutes policies that support economic freedom and growth,it is likely that Kenya will

-U.S.real GDP per person grew rapidly in the early 1960s.The table above has U.S.real GDP and population for 1961 and 1962. a.What was U.S.real GDP per person in 1961? b.What was U.S.real GDP per person in 1962? c.Between 1961 and 1962,how rapidly did U.S.real GDP per person grow?

Jose and Julia were discussing the necessary components to achieve economic growth.Jose stated that the economy must include free markets,specialization and trade,and an ethical judicial system.Julia reminded Jose that another key component is

The Keynesian macroeconomic model states that

If it took 20 years for real GDP to double,what was the growth rate of real GDP?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Since the beginning of the 20th century the decade with the slowest real GDP per person growth rate other than the 1930s is because of the .