Question 1

Higher rates of real per capita gross domestic product (GDP) are negatively correlated with

Accepted Answer

A)   better education.
B)   better health care.
C)   shorter life expectancy.
D)   the number of physicians per capita.
E)   adult literacy.F) A) and B)
G) D) and E)

Question 2

Explain how better-quality education for young people today can increase economic growth in the future.

Accepted Answer

Better-quality education today improves ...

Question 3

Real per capita gross domestic product (GDP) is defined as the

Accepted Answer

A)   market value of all final goods and services consumed in a country.
B)   average number of goods produced in a country.
C)   average level of income in a country.
D)   median level of income in a country.
E)   total level of income in a country.F) All of the above
G) C) and E)

Question 4

Which of the following is the equation for calculating the real per capita gross domestic product (GDP) growth?

Accepted Answer

A)   economic growth % Δ\DeltaΔ  in real GP - % Δ\DeltaΔ  price level -% Δ\DeltaΔ  population
B)   economic growth % Δ\DeltaΔ  price level - % Δ\DeltaΔ  population
C)   economic growth % Δ\DeltaΔ  in nominal GP - % Δ\DeltaΔ  population
D)   economic growth % Δ\DeltaΔ  in nominal GP - % Δ\DeltaΔ price level - % Δ\DeltaΔ  population
E)   economic growth % Δ\DeltaΔ  in nominal GP - % Δ\DeltaΔ  price level F) C) and E)
G) A) and C)

Question 5

Liberia,a very poor nation in West Africa,is relatively abundant in resources such as mahogany and rubber tree forests,iron-ore deposits,and diamonds.If Liberia is so rich in valuable resources,why is it still so impoverished?

Accepted Answer

A)   Liberians are content with a low standard of living.
B)   Natural resources are not as important as other types of resources.
C)   Taxes in Liberia are too high and discourage investment.
D)   The population of Liberia is too small to use those resources.
E)   Liberia lacks the institutions necessary to make productive use of those resources.F) C) and D)
G) None of the above

Question 6

An example of physical capital is

Accepted Answer

A)   exhaust from a smokestack.
B)   a factory.
C)   dog food.
D)   a pillow.
E)   pants.F) C) and D)
G) A) and B)

Question 7

In 1820,average world income was,in inflation-adjusted terms,roughly

Accepted Answer

A)   $628.
B)   $816.
C)   $554.
D)   $1,100.
E)   $778.F) B) and E)
G) A) and C)

Question 8

Average world income began to rapidly rise during the Industrial Revolution because

Accepted Answer

A)   population growth outpaced the pace of technological innovation.
B)   governments in Western Europe sharply cut taxes.
C)   the United States gained its independence from Great Britain.
D)   the pace of technological innovation outpaced population growth.
E)   there were few wars during that time period.F) C) and E)
G) A) and B)

Question 9

The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals

Accepted Answer

A)   real per capita GDP.
B)   the percent change in real GDP.
C)   the percent change in per capita GDP.
D)   the percent change in per capita real GDP.
E)   real GDP.F) A) and E)
G) None of the above

Question 10

Residents of poor countries tend to have fewer automobiles per capita because

Accepted Answer

A)   lower per capita real gross domestic product (GDP) growth rates allow for less spending on automobiles.
B)   residents of poor countries tend to live on farms,where cars are unnecessary.
C)   residents of wealthy countries have automobiles provided to them by the government.
D)   tax rates are higher in poor countries,which leaves less money to spend on cars.
E)   residents of poor countries generally prefer to walk.F) B) and E)
G) A) and D)

Question 11

Which of the following would be classified as a natural resource?

Accepted Answer

A)   obtaining a college degree
B)   a factory
C)   coal
D)   a loaf of bread
E)   wireless networking equipmentF) D) and E)
G) A) and E)

Question 12

Economic growth equals the percent change in nominal gross domestic product (GDP) minus the

Accepted Answer

A)   percent change in prices and the rate of population growth.
B)   percent change in prices.
C)   rate of population growth.
D)   percent change in prices and the federal budget deficit.
E)   rate of population growth and the percent change in investment.F) A) and E)
G) B) and C)

Question 13

In 1950,South Korea was ________ Liberia.South Korea is now ________ than Liberia.

Accepted Answer

A)   poorer than; richer
B)   richer than; poorer
C)   poorer than; poorer
D)   as rich as; richer
E)   as rich as; poorerF) None of the above
G) All of the above

Question 14

Which of the following represents the technology used in a classroom?

Accepted Answer

A)   pencils,pens,markers,and erasers
B)   the instructional methods the teacher uses
C)   desks and chairs
D)   the building in which the classroom is located
E)   the lockers and storage cabinetsF) A) and E)
G) None of the above

Question 15

Change in per capita real gross domestic product (GDP) is the best measure of economic growth because it

Accepted Answer

A)   adjusts changes in nominal GDP for changes in the price level and population growth.
B)   ignores changes in the price level used to compute nominal GDP.
C)   includes government spending,whereas nominal GDP does not.
D)   includes all economic activity,including sales of illegal goods and services,which nominal GDP ignores.
E)   does not consider changes in the population,which are not relevant to GDP anyway.F) A) and D)
G) A) and C)

Question 16

Between 2006 and 2010,per capita real gross domestic product (GDP) in India grew at an average rate of 7.11 percent per year.Which of the following factors would have contributed most to this rapid escalation in growth?

Accepted Answer

A)   advances in technology
B)   increases in government regulations
C)   decreases in education standards
D)   a significant increase in taxes
E)   restrictions on immigrationF) A) and B)
G) A) and C)

Question 17

In 1950,residents in Liberia were wealthier than those in Taiwan.Today,per capita gross domestic product (GDP) in Taiwan is more than twenty times that of Liberia.How would private property rights help explain why Taiwan is now so much wealthier than Liberia?

Accepted Answer

A)   The government prevents people from exploiting others for their property in Liberia.
B)   The Taiwanese government divides all property equally among the citizens.
C)   With a well-developed system of property rights,like in Taiwan,people have very strong incentives to improve the value of their assets.
D)   In Liberia,all property is owned by the state.
E)   Taxes in Liberia are so high that people have no incentive to improve the value of their property.F) C) and E)
G) D) and E)

Question 18

Beginning in the late 1970s,economic reform in China allowed farmers,for the first time,to keep a portion of their crops and to sell them to others.Previously,all food was collectively farmed and shared.How did this basic reform improve China's economic growth?

Accepted Answer

A)   It gave local governments an incentive to tax farmers.
B)   It gave farmers an incentive to be more productive.
C)   It gave farmers an incentive to work less.
D)   It gave the national government an incentive to import food.
E)   It gave consumers an incentive to eat less.F) A) and D)
G) A) and B)

Question 19

From 2009 to 2010,nominal gross domestic product (GDP) in the United States increased by 3.8 percent.Does this mean that the U.S.economy actually grew by 3.8 percent during that time period?

Accepted Answer

A)   Yes,because that is what nominal GDP measures.
B)   Yes,because nominal GDP takes into account changes in prices and the population.
C)   No,because nominal GDP only considers changes in prices,not population growth.
D)   No,because nominal GDP only considers population growth,not changes in prices.
E)   No,because that number ignores changes in prices and population growth.F) A) and C)
G) A) and B)

Question 20

Access to lifesaving medicine is very limited in parts of Africa; as a result,over 10 percent of children do not reach the age of five.What effect would an increase in medical aid to African children have on overall economic growth for the continent?

Accepted Answer

A)   Economic growth would not be affected; medical aid does not contribute to gross domestic product (GDP) .
B)   Economic growth would decrease because there would be more people to feed but no additional resources.
C)   Economic growth would not be affected because children do not contribute to economic growth.
D)   Economic growth would increase because the health and productivity of the labor supply would increase.
E)   Economic growth would increase because more children would survive,which represents a technological advance.F) B) and E)
G) B) and D)

Exam 24: Economic Growth and the Wealth of Nations

Which of the following represents the technology used in a classroom?

Correct AnswerverifiedShow Answer

In 1820,average world income was,in inflation-adjusted terms,roughly

Correct AnswerverifiedShow Answer

Average world income began to rapidly rise during the Industrial Revolution because

Correct AnswerverifiedShow Answer

Explain how better-quality education for young people today can increase economic growth in the future.

Correct AnswerverifiedBetter-quality education today improves ...View AnswerShow Answer

Beginning in the late 1970s,economic reform in China allowed farmers,for the first time,to keep a portion of their crops and to sell them to others.Previously,all food was collectively farmed and shared.How did this basic reform improve China's economic growth?

Correct AnswerverifiedShow Answer

An example of physical capital is

Correct AnswerverifiedShow Answer

Which of the following would be classified as a natural resource?

Correct AnswerverifiedShow Answer

Higher rates of real per capita gross domestic product (GDP) are negatively correlated with

Correct AnswerverifiedShow Answer

Access to lifesaving medicine is very limited in parts of Africa; as a result,over 10 percent of children do not reach the age of five.What effect would an increase in medical aid to African children have on overall economic growth for the continent?

Correct AnswerverifiedShow Answer

Economic growth equals the percent change in nominal gross domestic product (GDP) minus the

Correct AnswerverifiedShow Answer

The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals

Correct AnswerverifiedShow Answer

From 2009 to 2010,nominal gross domestic product (GDP) in the United States increased by 3.8 percent.Does this mean that the U.S.economy actually grew by 3.8 percent during that time period?

Correct AnswerverifiedShow Answer

Between 2006 and 2010,per capita real gross domestic product (GDP) in India grew at an average rate of 7.11 percent per year.Which of the following factors would have contributed most to this rapid escalation in growth?

Correct AnswerverifiedShow Answer

In 1950,residents in Liberia were wealthier than those in Taiwan.Today,per capita gross domestic product (GDP) in Taiwan is more than twenty times that of Liberia.How would private property rights help explain why Taiwan is now so much wealthier than Liberia?

Correct AnswerverifiedShow Answer

In 1950,South Korea was ________ Liberia.South Korea is now ________ than Liberia.

Correct AnswerverifiedShow Answer

Which of the following is the equation for calculating the real per capita gross domestic product (GDP) growth?

Correct AnswerverifiedShow Answer

Real per capita gross domestic product (GDP) is defined as the

Correct AnswerverifiedShow Answer

Residents of poor countries tend to have fewer automobiles per capita because

Correct AnswerverifiedShow Answer

Liberia,a very poor nation in West Africa,is relatively abundant in resources such as mahogany and rubber tree forests,iron-ore deposits,and diamonds.If Liberia is so rich in valuable resources,why is it still so impoverished?

Correct AnswerverifiedShow Answer

Change in per capita real gross domestic product (GDP) is the best measure of economic growth because it

Correct AnswerverifiedShow Answer

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Better-quality education today improves ...
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In 1950,South Korea was Liberia.South Korea is now than Liberia.

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