Question 1

Which of the following is NOT an obstacle to economic development?

Accepted Answer

A)  lack of entrepreneurship
B)  political instability
C)  corruption
D)  a central bankE) A) and C)
F) B) and C)

Question 2

The concept of an open economy means that

Accepted Answer

A)  imports should be limited while exports should be expanded.
B)  a nation's borders are open to flows of imports and exports.
C)  exports should be controlled but imports should be allowed in without restriction.
D)  imports and exports should be restricted.E) A) and B)
F) C) and D)

Question 3

Paul Romer's theory of economic growth differs from traditional theories in that

Accepted Answer

A)  Romer argues that investment in capital goods is not important in encouraging growth while investment in human capital is, whereas traditional theorists emphasize both human and physical capital.
B)  Romer argues that investment in human capital always occurs before investment in physical capital, while traditional theories emphasize the priority of physical capital.
C)  Romer argues an investment-knowledge cycle can exist, but requires constant increases in investment rates, while traditional theories argue that investment rates can be constant.
D)  Romer argues an investment-knowledge cycle allows a one-time increase in investment to permanently increase a country's growth rate, while traditional theory argued such an investment would have only a short-term effect.E) B) and D)
F) C) and D)

Question 4

-Refer to the above table. Which country had the highest growth rate of real Gross Domestic Product (GDP) from 2014 to 2015?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) B) and C)
F) None of the above

Question 5

Economic growth may understate changes in standards of living if

Accepted Answer

A)  the growth is accompanied by increasing congestion.
B)  leisure time is also increasing.
C)  the types of jobs generated feelings of alienation.
D)  deflation is taking place.E) A) and B)
F) B) and C)

Question 6

Suppose per capita real GDP grows by 7% 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)  4.9 years
B)  7 years
C)  10 years
D)  none of the aboveE) A) and B)
F) None of the above

Question 7

Economic growth is

Accepted Answer

A)  an increase in the per person real production in a nation.
B)  an increase in stock market values.
C)  an increase in real estate values.
D)  an increase in the number of people employed in agriculture.E) A) and B)
F) A) and C)

Question 8

Regarding the role of saving in economic growth, studies indicate that

Accepted Answer

A)  there is a positive relationship between economic growth and saving.
B)  there is no relationship between economic growth and saving.
C)  there is a negative relationship between economic growth and saving.
D)  there is both a positive and a negative relationship between economic growth and saving.E) B) and C)
F) B) and D)

Question 9

Entrepreneurship functions better when

Accepted Answer

A)  the government performs the entrepreneurial function.
B)  there is a well-defined property rights system.
C)  saving is relatively low.
D)  most of the population has low levels of education.E) None of the above
F) B) and C)

Question 10

The study of factors that contribute to the economic growth of a country is known as

Accepted Answer

A)  natural resource economics.
B)  entrepreneurial economics.
C)  development economics.
D)  savings economics.E) C) and D)
F) B) and D)

Question 11

Which of the following factors will NOT increase economic development?

Accepted Answer

A)  increasing the amount of education in the population
B)  establishing a system of property rights
C)  creative destruction where old jobs, companies and industries are destroyed
D)  increasing the amount of protectionismE) A) and B)
F) All of the above

Question 12

What are the shortcomings of using changes in per capita real GDP to measure economic growth?

Accepted Answer

GDP does not include all goods and servi...

Question 13

There has been some concern in the United States that people are not saving enough. This is a concern because

Accepted Answer

A)  decreases in saving lead to decreases in labor productivity.
B)  decreases in saving lead to decreases in investment.
C)  decreases in saving lead to increases in the capital stock.
D)  decreases in saving lead to increases in consumption in the future.E) B) and C)
F) None of the above

Question 14

In the United States, a patent lasts

Accepted Answer

A)  7 years.
B)  14 years.
C)  20 years.
D)  forever.E) None of the above
F) All of the above

Question 15

Which of the following is a benefit of economic growth?

Accepted Answer

A)  reduction in illiteracy
B)  reduction in poverty
C)  improved health
D)  all of the aboveE) B) and D)
F) C) and D)

Question 16

Economic growth is best measured by increases in

Accepted Answer

A)  nominal personal income.
B)  nominal Gross Domestic Product (GDP) .
C)  per capita real Gross Domestic Product (GDP) .
D)  per capita nominal Gross Domestic Product (GDP) .E) A) and C)
F) B) and D)

Question 17

Productivity relates to

Accepted Answer

A)  working harder over time.
B)  working longer over time.
C)  producing the same output with fewer labor hours.
D)  producing the same output with more labor hours.E) A) and B)
F) None of the above

Question 18

Which of the following is NOT a reason that free trade stimulates economic growth?

Accepted Answer

A)  Free trade encourages a more rapid spread of technology.
B)  Industries have larger markets.
C)  The importation of technically advanced products enables the country to imitate the technology.
D)  Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development.E) All of the above
F) None of the above

Question 19

When the government grants an inventor a patent

Accepted Answer

A)  he has the exclusive right to make, sell or use his invention for 5 years.
B)  the patent holder has less incentive to invest in R&D because one successful invention removes the need to develop others.
C)  the patent holder is guaranteed a profit on his invention.
D)  the protection of a current invention would increase spending on R&D.E) B) and C)
F) All of the above

Question 20

Have Malthus' predictions about population growth come true?

Accepted Answer

A)  no, because modern birth control has limited population growth in all nations
B)  yes, as evidenced by the famine and food shortages affecting every nation today
C)  no, because the world's food supply has grown much more rapidly than Malthus foresaw
D)  Yes. The world's food supply, measured by calories per person, continues to fall.E) A) and B)
F) All of the above

Exam 8: Global Economic Growth and Development

When the government grants an inventor a patent

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Regarding the role of saving in economic growth, studies indicate that

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Economic growth is best measured by increases in

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Economic growth is

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Which of the following is NOT an obstacle to economic development?

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Have Malthus' predictions about population growth come true?

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Economic growth may understate changes in standards of living if

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Paul Romer's theory of economic growth differs from traditional theories in that

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The concept of an open economy means that

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Entrepreneurship functions better when

Correct AnswerverifiedShow Answer

Suppose per capita real GDP grows by 7% 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?

Correct AnswerverifiedShow Answer

There has been some concern in the United States that people are not saving enough. This is a concern because

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Which of the following factors will NOT increase economic development?

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-Refer to the above table. Which country had the highest growth rate of real Gross Domestic Product (GDP) from 2014 to 2015?

Correct AnswerverifiedShow Answer

The study of factors that contribute to the economic growth of a country is known as

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Productivity relates to

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What are the shortcomings of using changes in per capita real GDP to measure economic growth?

Correct AnswerverifiedGDP does not include all goods and servi...View AnswerShow Answer

Which of the following is NOT a reason that free trade stimulates economic growth?

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Which of the following is a benefit of economic growth?

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In the United States, a patent lasts

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GDP does not include all goods and servi...
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