Question 1

GDP in a country grew from $10 billion to $14 billion over the span of 5 years.The percentage change in GDP was

Accepted Answer

A) 4%. 
B) 7%. 
C) 10%. 
D) 40%.

Question 2

How does government support of health and education programs foster economic growth?

Accepted Answer

The answer of How does government support of health and...

Question 3

The economic growth model predicts that

Accepted Answer

A) GDP per capita of rich countries will grow more rapidly than in poor countries. 
B) GDP per capita of poor countries will grow more rapidly than in rich countries. 
C) Governments must centrally direct the economy for growth to occur. 
D) GDP per capita of poor countries will never change.

Question 4

Figure 11-2 
-Refer to Figure 11-2.Based on the per-worker production function above,if the economy raises capital per hour worked from $35,000 to $40,000,by how much will real GDP per hour worked increase?

Accepted Answer

A) $150 
B) $1,850 
C) $2,000 
D) $5,000

Question 5

If the slope of the per-worker production function is 1/4 in a given range,how will a $10,000 increase in capital per hour worked affect real GDP per hour worked in the same given range?

Accepted Answer

A) Real GDP per hour worked will increase by $2,500. 
B) Real GDP per hour worked will increase by $40,000. 
C) Real GDP per hour worked will increase by $10,000. 
D) Real GDP per hour worked will decrease by $40.000.

Question 6

For how long does a patent give a firm the exclusive legal right to a product?

Accepted Answer

A) 10 years 
B) 17 years 
C) 20 years 
D) 50 years

Question 7

Most economic growth in the world occurred between 1,000,000 B.C.and 1300 A.D.

Accepted Answer

A) True 
 B)False

Question 8

The rapid growth of the Chinese economy should

Accepted Answer

A) benefit U.S.consumers as they have access to less expensive consumer goods. 
B) make it more difficult for citizens of the United States to find a job. 
C) not affect the mix of jobs available to citizens of the United States. 
D) A and B

Question 9

If property rights are not enforced in a country,

Accepted Answer

A) the market system will still work smoothly. 
B) entrepreneurs are unlikely to risk their own funds investing in such an economy. 
C) that country's growth rate will not be affected. 
D) that country will grow more rapidly because of the reduction of law suits.

Question 10

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

A) the seventeenth century. 
B) the eighteenth century. 
C) the nineteenth century. 
D) the twentieth century.

Question 11

List four types of government policies which can aid economic growth.

Accepted Answer

The answer of List four types of government policies which...

Question 12

Figure 11-1 
-Refer to Figure 11-1.Diminishing marginal returns is illustrated in the per-worker production function in the figure above by a movement from

Accepted Answer

A) A to C. 
B) B to C. 
C) C to D. 
D) D to C.

Question 13

What is "brain drain"?

Accepted Answer

A) the tendency for highly educated workers in high-income countries to move to low-income countries to volunteer their services 
B) increased recruiting efforts that attempt to raise the average level of education in developed nations 
C) foreign direct investment that flows from a developed country to a developing country 
D) the loss of highly educated people from a low-income country as they move to higher-income opportunities in foreign countries

Question 14

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries.

Accepted Answer

A) True 
 B)False

Question 15

Some factors currently exist that inhibit the growth rate of the Chinese economy.One reason that General Motors has been unwilling to bring its latest technology for building electric and hybrid cars to China is

Accepted Answer

A) the introduction of free-market reforms. 
B) the introduction of the relatively new resource of entrepreneurship. 
C) the lack of laws that predictably enforce property rights. 
D) the total lack of governmental intervention in the market place.

Question 16

By offering more generous unemployment insurance programs,European countries can expect

Accepted Answer

A) to pay less in taxes than in the United States. 
B) workers to gain new skills quickly in response to fluctuations in the labor market. 
C) shorter periods of unemployment for their workers. 
D) longer periods of unemployment for their workers.

Question 17

Which of the following is not a reason why low-income countries might experience low economic growth?

Accepted Answer

A) The country has endured extended periods of war. 
B) The country fails to enforce a rule of law. 
C) The country has a good education system. 
D) The country has a low rate of saving and investment.

Question 18

What are some of the reasons used to explain improvements in health,education,democracy,and political stability in many low-income countries?

Accepted Answer

The answer of What are some of the reasons used...

Question 19

Explain how advances in technology are critical to sustaining economic growth,even if capital per hour worked is consistently increasing.Provide a graph of a per-worker production function to support your answer.

Accepted Answer

The answer of Explain how advances in technology are critical...

Question 20

Table 11-4

-Refer to Table 11-4.In the table above,which countries are consistent with the predictions of the economic growth model?

Accepted Answer

A) Botswana and Thailand 
B) Japan and Guatemala 
C) only Japan 
D) all four countries

Exam 11: Long-Run Economic Growth: Sources and Policies