World's Toughest Trivia Quiz On Economics

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  • 1/86 Questions
    Assume a nation's current production possibilities are represented by the curve AB  in the above diagram. Economic growth would best be indicated by a: - ProProfs

    Assume a nation's current production possibilities are represented by the curve AB  in the above diagram. Economic growth would best be indicated by a:

    • Shift in the curve from AB to CD
    • Shift in the curve from AB to EF
    • Movement from point 1 to point 2
    • Movement from point 3 to point 4
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About This Quiz

Some people may have attained a degree in economics and think that they know a lot when it comes to economics. Are you one of those people that brag about their knowledge in economics? Take up what has come to be known as the world’s toughest quiz when it comes to economics and print out the certificate to prove you tackled and passed it.

Worlds Toughest Trivia Quiz On Economics - Quiz

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  • 2. 

    Compared with the period from 1973-1995, the annual rate of productivity growth from 1995-2009 was about:

    • The same

    • Double

    • Triple

    • Quadruple

    Correct Answer
    A. Double
    Explanation
    The correct answer is "Double" because the question asks for a comparison of the annual rate of productivity growth between two different periods: 1973-1995 and 1995-2009. The word "double" indicates that the rate of productivity growth during the second period was two times higher than during the first period.

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  • 3. 

    A nation's real GDP was $250 billion in 2009 and $265 billion in 2010. Its population was 120 million in 2009 and 125 million in 2010. What was the real GDP growth rate in 2010?

    • 15.0%

    • 6.0%

    • 5.7%

    • 1.1%

    Correct Answer
    A. 6.0%
    Explanation
    The real GDP growth rate in 2010 can be calculated by using the formula: (GDP in 2010 - GDP in 2009) / GDP in 2009 * 100. Plugging in the given values, we get (265 - 250) / 250 * 100 = 15 / 250 * 100 = 0.06 * 100 = 6.0%. Therefore, the real GDP growth rate in 2010 is 6.0%.

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  • 4. 

    Nation A's real GDP was $520 billion in 2009 and $550 billion in 2010. Its population was 150 million in 2009 and 155 million in 2010. On the other hand, Nation B's real GDP was $200 billion in 2009 and $210 billion in 2010; and its population was 53 million in 2009 and 55 million in 2010. Which of the following statements is true?

    • Nation A's real GDP growth in 2010 is higher than Nation B's

    • Nation B's real GDP growth in 2010 is higher than Nation A's

    • Nation A's real GDP growth in 2010 is identical to Nation B's

    • Nation A's and Nation B's real GDP growth rates in 2010 are both higher than 10%

    Correct Answer
    A. Nation A's real GDP growth in 2010 is higher than Nation B's
    Explanation
    To compare the real GDP growth of Nation A and Nation B, we need to calculate the growth rate for each country. The formula to calculate the growth rate is (final value - initial value) / initial value * 100.

    For Nation A, the initial real GDP in 2009 was $520 billion and the final real GDP in 2010 was $550 billion. Using the formula, the growth rate for Nation A is (550 - 520) / 520 * 100 = 5.77%.

    For Nation B, the initial real GDP in 2009 was $200 billion and the final real GDP in 2010 was $210 billion. Using the formula, the growth rate for Nation B is (210 - 200) / 200 * 100 = 5%.

    Therefore, Nation A's real GDP growth in 2010 (5.77%) is higher than Nation B's (5%).

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  • 5. 
    Refer to the above diagram. If the production possibilities curve of an economy shifts from AB to CD, it is most likely the result of what factor affecting economic growth? - ProProfs

    Refer to the above diagram. If the production possibilities curve of an economy shifts from AB to CD, it is most likely the result of what factor affecting economic growth?

    • A supply factor

    • A demand factor

    • An efficiency factor

    • An allocation factor

    Correct Answer
    A. A supply factor
    Explanation
    If the production possibilities curve of an economy shifts from AB to CD, it is most likely the result of a supply factor affecting economic growth. This means that there has been an increase in the economy's ability to produce goods and services, such as advancements in technology, an increase in the quantity or quality of resources, or improvements in productivity. This shift indicates that the economy can now produce more output than before, leading to economic growth.

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  • 6. 

    Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 3.5%; scenario B has an average annual growth of 4.5%. The nation's real GDP would double in about:

    • 20 years under scenario A, versus 30 years under scenario B

    • 20 years under scenario A, versus 16 years under scenario B

    • 12 years under scenario A, versus 16 years under scenario B

    • 16 years under scenario A, versus 30 years under scenario B

    Correct Answer
    A. 20 years under scenario A, versus 16 years under scenario B
    Explanation
    In scenario A, with an average annual growth rate of 3.5%, the nation's real GDP would double in about 20 years. In scenario B, with an average annual growth rate of 4.5%, the nation's real GDP would double in about 16 years. This means that scenario B has a faster rate of economic growth compared to scenario A, resulting in a shorter time period for the nation's real GDP to double.

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  • 7. 

    If 40,000 worker-hours produced a total output of $600,000 in an economy, the labor productivity is:

    • $10/worker-hour

    • $15/worker-hour

    • $24/worker-hour

    • $240/worker-hour

    Correct Answer
    A. $15/worker-hour
    Explanation
    Labor productivity is calculated by dividing the total output by the number of worker-hours. In this case, the total output is $600,000 and the number of worker-hours is 40,000. Therefore, the labor productivity is $600,000/40,000 = $15/worker-hour.

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  • 8. 

    If the annual growth in a nation's productivity is 2.8 percent rather than 1.5 percent, then the nation's standard of living will double in about

    • 20 years instead of 40 years

    • 25 years instead of 47 years

    • 46 years instead of 70 years

    • 55 years instead of 115 years

    Correct Answer
    A. 25 years instead of 47 years
    Explanation
    If the annual growth in a nation's productivity is increased from 1.5 percent to 2.8 percent, the nation's standard of living will double in about 25 years instead of 47 years. This is because a higher growth rate leads to a faster increase in productivity, which in turn leads to a faster increase in the nation's overall standard of living. Therefore, the higher growth rate of 2.8 percent will result in the standard of living doubling in a shorter time period compared to the lower growth rate of 1.5 percent.

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  • 9. 

    A nation's real GDP was $250 billion in 2009 and $265 billion in 2010. Its population was 120 million in 2009 and 125 million in 2010. What is its real GDP per capita in 2010?

    • $2,120 per person

    • $212 per person

    • $21,200 per person

    • $205 per person

    Correct Answer
    A. $2,120 per person
    Explanation
    The real GDP per capita is calculated by dividing the real GDP by the population. In this case, the real GDP in 2010 is $265 billion and the population is 125 million. Dividing $265 billion by 125 million gives us $2,120 per person.

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  • 10. 

    One of the main arguments against further growth for industrialized nations focuses on the problem of:

    • Technological knowledge

    • Environmental quality

    • Feedback mechanisms

    • Infrastructure

    Correct Answer
    A. Environmental quality
    Explanation
    The main argument against further growth for industrialized nations is the problem of environmental quality. This refers to the negative impact that industrialization has on the environment, such as pollution, deforestation, and depletion of natural resources. As nations continue to grow and industrialize, there is a concern that these environmental issues will worsen, leading to irreversible damage to ecosystems and the overall well-being of the planet. Therefore, it is important to prioritize sustainable development and find ways to mitigate the negative effects of industrialization on the environment.

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  • 11. 

    Which of the following factors has been a dominant source of economic growth in the U.S. (except 1973-1995)?

    • Increase in population

    • Increase in labor productivity

    • Increase in labor hours

    • Increase in labor force

    Correct Answer
    A. Increase in labor productivity
    Explanation
    Increase in labor productivity has been a dominant source of economic growth in the U.S. (except 1973-1995). This means that the ability of workers to produce more output per hour of work has been a significant factor in driving economic growth. When workers become more productive, they can produce more goods and services, leading to increased economic output and overall growth. This can be achieved through technological advancements, improved skills and education, better management practices, and efficient use of resources.

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  • 12. 

    In 2009, about how many percent of adults in the U.S. were college graduates or more?

    • 10%

    • 30%

    • 50%

    • 70%

    Correct Answer
    A. 30%
    Explanation
    In 2009, approximately 30% of adults in the U.S. were college graduates or had obtained higher education. This means that out of every 100 adults, around 30 had completed college or achieved a higher level of education.

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  • 13. 
    Refer to the above table. In year 2, the economy's real GDP was: - ProProfs

    Refer to the above table. In year 2, the economy's real GDP was:

    • $400,000

    • $420,000

    • $462,000

    • $500,000

    Correct Answer
    A. $420,000
    Explanation
    In year 2, the economy's real GDP was $420,000. This can be determined by looking at the values in the table and identifying the corresponding year. The table does not provide any additional information or context that would affect this determination.

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  • 14. 

    One concern regarding educational attainment in the U.S. is that:

    • The percentage of adults finishing college is falling

    • There are fewer college graduates in science and engineering

    • Students are graduating later and later

    • Fewer high school graduates are going on to college

    Correct Answer
    A. There are fewer college graduates in science and engineering
    Explanation
    The concern regarding educational attainment in the U.S. is that there are fewer college graduates in science and engineering. This means that there is a decrease in the number of individuals obtaining degrees in these fields, which is worrisome as these areas are crucial for technological advancements and innovation. This decline may have implications for the country's competitiveness in the global economy and its ability to address complex scientific challenges.

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  • 15. 

    Increasing returns would be a situation where a firm increases its workforce and other outputs by:

    • 8% and its output increases by 5%

    • 5% and its output increases by 8%

    • 8% and its output increases by 8%

    • 12% and its output increases by 10%

    Correct Answer
    A. 5% and its output increases by 8%
  • 16. 

    A nation's average annual real GDP growth rate is 2.5%. Based on the "rule of 70", the approximate number of years it would take for this nation's real GDP to double is:

    • 175 years

    • 40 years

    • 28 years

    • 17.5 years

    Correct Answer
    A. 28 years
    Explanation
    The "rule of 70" is a formula used to estimate the time it takes for a variable to double, given its growth rate. The formula is calculated by dividing 70 by the growth rate. In this case, the nation's average annual real GDP growth rate is 2.5%. By applying the rule of 70, we can estimate that it would take approximately 28 years for the nation's real GDP to double.

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  • 17. 

    Economic growth in the U.S. since 1950 has been characterized by:

    • An average growth rate in real GDP that is slower than the growth rate of the population

    • A doubling of real GDP from 1950 to 2009

    • An average growth rate in real GDP that is faster than the growth rate of the population

    • An average growth rate in real GDP per capita of about 6% per year

    Correct Answer
    A. An average growth rate in real GDP that is faster than the growth rate of the population
    Explanation
    The correct answer is that economic growth in the U.S. since 1950 has been characterized by an average growth rate in real GDP that is faster than the growth rate of the population. This means that the economy has been expanding at a faster pace than the population has been growing, indicating an increase in productivity and living standards. This can be attributed to various factors such as technological advancements, increased investment, and improved efficiency in production.

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  • 18. 

    Economic historians identify which item as a major factor that started the Industrial Revolution in Britain?

    • Steam engine

    • Automobile

    • Telephone

    • Electric motor

    Correct Answer
    A. Steam engine
    Explanation
    The steam engine is identified as a major factor that started the Industrial Revolution in Britain. This invention revolutionized the way work was done by providing a reliable and efficient source of power. It enabled factories and industries to mechanize their production processes, leading to increased productivity and economic growth. The steam engine also played a crucial role in the development of transportation systems, allowing for the expansion of railways and steamships. Overall, the steam engine was a key catalyst for the Industrial Revolution, transforming Britain into the world's leading industrial power.

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  • 19. 

    Patents and copyrights foster the flow of:

    • Saving and investment

    • Spending and income

    • Resources and products

    • Inventions and ideas

    Correct Answer
    A. Inventions and ideas
    Explanation
    Patents and copyrights foster the flow of inventions and ideas by providing legal protection and exclusive rights to the creators. This encourages innovation and creativity as inventors and creators are incentivized to share their ideas and inventions without the fear of others copying or stealing their work. It also promotes the sharing of knowledge and advancements, leading to the development of new products and technologies.

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  • 20. 

    Efficient financial institutions foster the flow of:

    • Saving and investment

    • Spending and income

    • Resources and products

    • Inventions and ideas

    Correct Answer
    A. Saving and investment
    Explanation
    Efficient financial institutions facilitate the movement of savings and investments. These institutions provide individuals and businesses with the necessary tools and platforms to save their money and invest it in various financial instruments such as stocks, bonds, and mutual funds. By doing so, they encourage the accumulation of capital and promote economic growth. Efficient financial institutions also play a crucial role in allocating funds to productive investments, which helps to stimulate innovation, create jobs, and generate income in the economy.

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  • 21. 

    A major effect of the rise in the rate of productivity growth in the United States is a(n):

    • Rise in the rate of inflation

    • Rise in the growth of living standards

    • Increase in the relative price of U.S. goods in foreign markets

    • Increase in the competitiveness of U.S. goods in foreign markets

    Correct Answer
    A. Rise in the growth of living standards
    Explanation
    The correct answer is "Rise in the growth of living standards." When the rate of productivity growth increases in the United States, it means that more goods and services can be produced with the same amount of resources. This leads to increased efficiency and higher output, which in turn leads to an improvement in living standards. As productivity increases, individuals and households can enjoy a higher standard of living as they have access to more goods and services.

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  • 22. 
    Refer to the above diagram. If the production possibilities of an economy are shown by curve AB but the economy is operating at point 4, the reasons are most likely to be because of: - ProProfs

    Refer to the above diagram. If the production possibilities of an economy are shown by curve AB but the economy is operating at point 4, the reasons are most likely to be because of:

    • Supply and environmental factors

    • Demand and efficiency factors

    • Labor inputs and labor productivity

    • Technological process

    Correct Answer
    A. Demand and efficiency factors
    Explanation
    If an economy is operating at point 4 on the production possibilities curve AB, it suggests that the economy is not utilizing its resources efficiently and there is a lack of demand for goods and services. This could be due to various factors such as low consumer confidence, inadequate marketing and advertising strategies, ineffective government policies, or a general economic downturn. Additionally, inefficiencies in production processes and resource allocation could also contribute to the economy not reaching its full potential at point 4.

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  • 23. 

    The "rule of 70" is a formula for determining the approximate number of:

    • Years that it would take for a value (like real GDP) to expand 70 times

    • Years that it would take for a value (like real GDP) to double

    • Times a value (like real GDP) is a multiple of 70

    • Times one could double a certain value (like real GDP) over 70 years

    Correct Answer
    A. Years that it would take for a value (like real GDP) to double
    Explanation
    The "rule of 70" is a formula used to estimate the number of years it would take for a value, such as real GDP, to double. It is derived by dividing the number 70 by the growth rate of the value. By using this formula, one can get a rough estimate of how long it would take for a value to double based on its growth rate.

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  • 24. 

    At what average annual rate has real GDP and real GDP per capita, respectively, grown from 1950 to 2009?

    • 7.5 percent and 5 percent

    • 3.2 percent and 2 percent

    • 5.1 percent and 3 percent

    • 1.1 percent and 0.5 percent

    Correct Answer
    A. 3.2 percent and 2 percent
    Explanation
    From 1950 to 2009, real GDP has grown at an average annual rate of 3.2 percent, while real GDP per capita has grown at an average annual rate of 2 percent. This means that the overall economy has experienced a higher growth rate compared to the growth rate of the population. This indicates that there has been an increase in productivity and economic efficiency over the years, leading to a higher standard of living for the population.

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  • 25. 

    Historically, the total amount of real capital per worker in the United States has:

    • Provided financing for the industrial expansion of business

    • Increased significantly and made labor more productive

    • Been the single most important determinant of economic growth

    • Remained relatively constant, although the quality of capital has improved dramatically

    Correct Answer
    A. Increased significantly and made labor more productive
    Explanation
    The correct answer is "Increased significantly and made labor more productive." This is because when the total amount of real capital per worker increases, it means there is more machinery, equipment, and infrastructure available for each worker. This leads to increased productivity as workers can now produce more output with the help of these capital goods. Additionally, the increase in real capital per worker also indicates economic growth as it signifies investment in the economy. Therefore, it can be concluded that the increase in real capital per worker has made labor more productive and has been an important determinant of economic growth.

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  • 26. 

    Trends in the educational attainment in the U.S. since 1960 indicate that the percentage of adults:

    • Completing high school has been rising, and so has the percentage who do not go to high school nor complete elementary school

    • Completing college has been rising, and so has the percentage completing high school

    • Completing college has been constant, but the percentage completing high school has been rising

    • Who do not go to high school has been falling, but the percentage who do not complete elementary school has been rising

    Correct Answer
    A. Completing college has been rising, and so has the percentage completing high school
    Explanation
    The correct answer suggests that both the percentage of adults completing college and the percentage completing high school have been increasing since 1960. This implies that more adults are pursuing higher education and achieving higher levels of educational attainment.

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  • 27. 

    One major economic benefit of global competition is:

    • Lower unemployment

    • Increased protection of domestic firms

    • Pressure to innovate

    • More leisure opportunities

    Correct Answer
    A. Pressure to innovate
    Explanation
    Global competition creates pressure for firms to innovate in order to stay competitive and survive in the market. When companies are faced with competition from all over the world, they are motivated to continuously improve their products, services, and processes to attract customers and gain a competitive edge. This drive to innovate leads to the development of new technologies, improved efficiency, and increased productivity, which can ultimately benefit the economy as a whole. Additionally, innovation can also lead to the creation of new job opportunities, further contributing to lower unemployment rates.

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  • 28. 

    The rapid productivity growth experienced in 1995-2009:

    • Is believed by most economists to be a permanent shift in the economy

    • Is still debated among many economists as to whether it represents a permanent shift in the economy

    • Suggests that prospects for lasting increases in productivity growth are rather poor

    • Suggests that productivity growth can occur without raising the nation's standard of living

    Correct Answer
    A. Is still debated among many economists as to whether it represents a permanent shift in the economy
    Explanation
    The answer suggests that there is ongoing debate among economists regarding whether the rapid productivity growth experienced in 1995-2009 represents a permanent shift in the economy. This indicates that there is no consensus among economists and the issue is still being discussed and analyzed.

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  • 29. 

    Real GDP or total output in any year is equal to:

    • Labor productivity divided by the number of worker-hours

    • Labor productivity multiplied by real output

    • Number of worker hours multiplied by labor productivity

    • Number of worker-hours divided by labor productivity

    Correct Answer
    A. Number of worker hours multiplied by labor productivity
    Explanation
    The correct answer is "Number of worker hours multiplied by labor productivity." This is because real GDP or total output in any year is calculated by multiplying the number of worker hours by the labor productivity. This formula takes into account both the amount of time spent by workers and their productivity level, resulting in an accurate measure of the total output produced in a given period.

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  • 30. 

    Which of the following countries ranked highest in the Global Competitiveness Index?

    • Japan

    • Switzerland

    • Germany

    • Canada

    Correct Answer
    A. Switzerland
    Explanation
    Switzerland ranked highest in the Global Competitiveness Index. This index measures the competitiveness of countries based on various factors such as institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation. Switzerland's strong performance in these areas, including its well-developed infrastructure, highly skilled workforce, efficient markets, and innovation capabilities, contributed to its high ranking in the Global Competitiveness Index.

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  • 31. 

    Which of the following is a measure of economic growth that is most useful for comparing living standards?

    • Growth in nominal GDP

    • Decreases in the rate of unemployment

    • Increases in real GDP per capita

    • Increases in real GDP

    Correct Answer
    A. Increases in real GDP per capita
    Explanation
    Increases in real GDP per capita is the most useful measure of economic growth for comparing living standards. Real GDP per capita takes into account the growth of the economy adjusted for inflation and divides it by the population, giving a measure of the average income and standard of living for individuals in a country. This measure allows for a more accurate comparison of living standards across different countries or over time, as it accounts for changes in both economic output and population size.

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  • 32. 

    In the modern economic growth process, it is typical to find that:

    • Leader countries continue to grow faster than follower countries

    • Follower countries can grow faster than leader countries

    • Large countries cannot grow faster than leader countries

    • The gap between leader countries and follower countries stays constant

    Correct Answer
    A. Follower countries can grow faster than leader countries
    Explanation
    In the modern economic growth process, it is possible for follower countries to grow faster than leader countries. This is because follower countries have the advantage of being able to learn from the experiences and mistakes of leader countries, allowing them to adopt successful strategies and skip certain developmental stages. Follower countries can also benefit from access to advanced technologies and knowledge that have already been developed by leader countries. Additionally, follower countries may have lower labor costs and more favorable investment conditions, attracting foreign direct investment and stimulating their economic growth.

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  • 33. 

    In the U.S. in the last 50 years or so, we saw the following trends, except:

    • The average length of the workweek remained relatively constant

    • The size of the labor force expanded

    • Birthrates kept the native-born population growing at a steady rate

    • Women's labor force participation rate surged

    Correct Answer
    A. Birthrates kept the native-born population growing at a steady rate
    Explanation
    In the U.S. in the last 50 years, birthrates did not keep the native-born population growing at a steady rate. In fact, birthrates have been declining over the years, leading to a slower growth rate of the native-born population. This can be attributed to various factors such as increased access to contraception, delayed marriage and childbearing, and changing societal norms.

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  • 34. 

    Supply factors in economic growth include the following, except:

    • Improvements in technology

    • Expansion of capital stock

    • Increases in purchases of output

    • Better education and training

    Correct Answer
    A. Increases in purchases of output
    Explanation
    The given answer, "Increases in purchases of output," is the correct answer because it is the only option that does not directly contribute to economic growth. Improvements in technology, expansion of capital stock, and better education and training all lead to increased productivity and efficiency, which in turn promote economic growth. However, increases in purchases of output simply reflect an increase in consumer demand and do not directly contribute to the factors that drive economic growth.

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  • 35. 

    Suppose that an economy is initially operating at a point on its PPC. If it then experiences an expansion in its production capacity, but its total spending does not rise as fast as its capacity, the economy will end up:

    • Still on its PPC

    • Outside its PPC

    • Inside its PPC

    • On one of the axes of its PPC

    Correct Answer
    A. Inside its PPC
    Explanation
    If an economy experiences an expansion in its production capacity but its total spending does not rise as fast as its capacity, it means that the economy is not fully utilizing its increased production capacity. This indicates that the economy is operating below its potential, as it has the capability to produce more goods and services but is not doing so due to lower spending. Therefore, the economy will end up inside its PPC, as it is producing below its maximum potential level.

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  • 36. 

    Labor productivity in the U.S. in the periods 1973-1995 and 1995-2009 grew at average rates of:

    • 1.5% and 5.2% respectively

    • 1.5% and 2.8% respectively

    • 2.6% and 4.8% respectively

    • 4.1% and 5.2% respectively

    Correct Answer
    A. 1.5% and 2.8% respectively
    Explanation
    Labor productivity in the U.S. grew at an average rate of 1.5% per year during the period 1973-1995. This means that the output per hour worked increased by 1.5% on average each year during that time. Similarly, labor productivity grew at an average rate of 2.8% per year during the period 1995-2009. This indicates that the output per hour worked increased by 2.8% on average each year during that period.

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  • 37. 

    The following factors tend to make the real GDP growth rate understate the growth of economic well-being, except:

    • Improved product quality

    • Added leisure

    • Debasement of the environment

    • More stress-free lifestyle

    Correct Answer
    A. Debasement of the environment
    Explanation
    The real GDP growth rate measures the increase in the value of goods and services produced in an economy. Factors that tend to make the real GDP growth rate understate the growth of economic well-being include improved product quality, added leisure, and a more stress-free lifestyle. These factors contribute to a higher quality of life and increased well-being, but may not necessarily be reflected in the monetary value of GDP. However, debasement of the environment does not contribute to economic well-being and can have negative consequences for future generations, making it an exception to the factors that understate GDP growth.

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  • 38. 

    Which of the following is the so-called efficiency factor of economic growth?

    • Having an efficient financial system

    • Reaching full production potential

    • Having free trade

    • Enhanced quantity and quality of human resources

    Correct Answer
    A. Reaching full production potential
    Explanation
    Reaching full production potential is considered the efficiency factor of economic growth because it implies that an economy is utilizing all of its available resources and producing goods and services at its maximum capacity. This leads to increased productivity, higher output, and ultimately, economic growth. When an economy is operating at full production potential, it is able to meet the demands of its population and generate higher levels of income and employment.

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  • 39. 

    Human capital refers to the:

    • Tools and equipment available to workers

    • Amount of financing available to start-up firms

    • Number of workers available in the economy

    • Education, training, and skills of workers.

    Correct Answer
    A. Education, training, and skills of workers.
    Explanation
    Human capital refers to the education, training, and skills of workers. It represents the knowledge, abilities, and expertise that individuals acquire through formal education, on-the-job training, and other learning experiences. Human capital is an essential factor in economic growth and development as it enhances the productivity and efficiency of workers, leading to increased innovation, competitiveness, and overall economic performance. It encompasses not only the quantity but also the quality of the workforce, emphasizing the importance of continuous learning and skill development for individuals and societies.

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  • 40. 

    Critics of growth policies focus on the following arguments, except:

    • Growth has resulted in resource degradation and pollution

    • Sociological problems like poverty have not been solved by growth

    • Growth may have given us the good life, but we cannot better it anymore

    • Rapid growth is not sustainable in the long term due to resource limitations

    Correct Answer
    A. Growth may have given us the good life, but we cannot better it anymore
    Explanation
    The given correct answer states that "Growth may have given us the good life, but we cannot better it anymore." This answer suggests that critics of growth policies do not argue that growth has provided a good life but rather that further improvements or advancements beyond the current state of good life are not possible. In other words, they believe that growth has reached its limit and cannot be further improved.

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  • 41. 

    Nation A's real GDP was $520 billion in 2009 and $550 billion in 2010. Its population was 150 million in 2009 and 155 million in 2010. On the other hand, Nation B's real GDP was $200 billion in 2009 and $210 billion in 2010; and its population was 53 million in 2009 and 55 million in 2010. Which of the following statements is true?

    • Nation A's GDP per capita is higher than Nation B's

    • Nation B's GDP per capita is higher than Nation A's

    • Nation A's GDP per capita is equal to Nation B's

    • One cannot determine GDP per capita from the given data

    Correct Answer
    A. Nation B's GDP per capita is higher than Nation A's
    Explanation
    To calculate GDP per capita, we divide the real GDP by the population. In 2009, Nation A's GDP per capita was $520 billion / 150 million = $3,466.67. In 2010, Nation A's GDP per capita was $550 billion / 155 million = $3,548.39. In 2009, Nation B's GDP per capita was $200 billion / 53 million = $3,773.58. In 2010, Nation B's GDP per capita was $210 billion / 55 million = $3,818.18. Therefore, Nation B's GDP per capita is higher than Nation A's.

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  • 42. 

    Growth-promoting institutional structures include the following, except: 

    • Patents and copyrights

    • Efficient financial institutions

    • Protection of domestic firms from foreign rivals

    • Stable political system

    Correct Answer
    A. Protection of domestic firms from foreign rivals
    Explanation
    The growth-promoting institutional structures mentioned in the question are patents and copyrights, efficient financial institutions, and a stable political system. These factors contribute to fostering innovation, providing financial stability, and ensuring a conducive environment for economic growth. However, the protection of domestic firms from foreign rivals is not considered a growth-promoting institutional structure as it can hinder competition and limit opportunities for growth and innovation through international trade.

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  • 43. 

    Society can increase its output and income by increasing basically one or both of two factors:

    • Its spending and investment

    • Its private and public sectors of the economy

    • Its resources and the productivity of the resources

    • Its markets and prices

    Correct Answer
    A. Its resources and the productivity of the resources
    Explanation
    Increasing the resources available to society and improving the productivity of those resources can lead to an increase in output and income. This can be achieved by investing in new technologies, improving infrastructure, and enhancing the skills and education of the workforce. By doing so, society can effectively utilize its resources and maximize their output, resulting in economic growth and higher incomes. Additionally, increasing the availability of resources can also lead to the expansion of markets and the adjustment of prices, further contributing to increased output and income.

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  • 44. 

    Increases in the value of the product to each user, including existing users, as the total number of users rises is called:

    • Network effects

    • Simultaneous consumption

    • Learning by doing

    • The spreading of development costs

    Correct Answer
    A. Network effects
    Explanation
    Network effects refer to the phenomenon where the value of a product or service increases as more people use it. This is because each additional user contributes to the overall network, creating a positive feedback loop. As the total number of users rises, the product becomes more valuable to both existing and new users, leading to increased adoption and growth.

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  • 45. 
    Refer to the above table. Between Year 2 and Year 3, real GDP increased by: - ProProfs

    Refer to the above table. Between Year 2 and Year 3, real GDP increased by:

    • 2.0%

    • 5.0%

    • 10.0%

    • 15.0%

    Correct Answer
    A. 10.0%
    Explanation
    Between Year 2 and Year 3, real GDP increased by 10.0%. This can be determined by comparing the real GDP values for Year 2 and Year 3 in the table. Real GDP increased from $20,000 in Year 2 to $22,000 in Year 3, which is a $2,000 increase. To calculate the percentage increase, we divide the increase ($2,000) by the initial value ($20,000) and multiply by 100. This gives us a percentage increase of 10.0%.

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  • 46. 

    Rising real wages for women in the U.S. workforce since the 1960s have:

    • Reduced access to job opportunities for women

    • Increased the opportunity cost of staying at home

    • Led to a rise in the number of lifetime births per woman

    • Reallocated labor resources from urban to rural areas of the nation

    Correct Answer
    A. Increased the opportunity cost of staying at home
    Explanation
    The rising real wages for women in the U.S. workforce since the 1960s have increased the opportunity cost of staying at home. This means that as women have gained higher wages and more job opportunities, the potential benefits and opportunities they would have to give up by staying at home have also increased. With higher wages, women may be more motivated to work outside the home rather than staying at home, as the financial benefits of working have become more significant.

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  • 47. 

    Which of the following statements is true?

    • China's real GDP and real income have grown so much slower than its population

    • China's real GDP and real income have grown so much faster than its population

    • China's real GDP has grown faster than its population, but its real income has grown slower than its population

    • China's real GDP has grown slower than its population, but its real income has grown faster than its population

    Correct Answer
    A. China's real GDP and real income have grown so much faster than its population
    Explanation
    China's real GDP and real income have grown so much faster than its population. This means that China's economy has experienced significant growth, outpacing the growth of its population. This indicates that the country's economic development has been successful in generating higher levels of output and income for its citizens.

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  • 48. 

    Which of the following is a measure of economic growth that is most useful for measuring political preeminence?

    • Growth in nominal GDP

    • Decreases in the rate of unemployment

    • Increases in real GDP per capita

    • Increases in real GDP

    Correct Answer
    A. Increases in real GDP
    Explanation
    Increases in real GDP is the most useful measure of economic growth for measuring political preeminence because it takes into account the growth of the economy adjusted for inflation and population changes. Real GDP per capita specifically measures the average economic output per person, which can indicate the overall standard of living and prosperity in a country. Therefore, an increase in real GDP per capita suggests that the country's economy is growing and its citizens are experiencing improved living conditions, which can contribute to political stability and influence on the global stage.

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  • 49. 

    The number of worker-hours available in an economy is determined by the following, except:

    • Size of the labor force

    • Length of the average workweek

    • Unemployment rate of the workforce

    • Labor force participation rate

    Correct Answer
    A. Unemployment rate of the workforce
    Explanation
    The number of worker-hours available in an economy is determined by the size of the labor force, the length of the average workweek, and the labor force participation rate. The unemployment rate of the workforce, however, does not directly determine the number of worker-hours available. While a higher unemployment rate may indicate a smaller labor force or a decrease in the length of the average workweek, it does not directly impact the total number of worker-hours available in the economy.

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  • Aug 27, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 29, 2012
    Quiz Created by
    Hookemhorns6767
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