Economic Growth
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- 1.
A nation’s standard of living is measured by its
- A.
Nominal GDP
- B.
Nominal GDP per capita
- C.
Real GDP
- D.
Real GDP per capita
Correct Answer
D. Real GDP per capita -
- 2.
Which of the following is not true?
- A.
a. Growth rates of real GDP per person vary substantially from country to country.
- B.
b. GDP measures total expenditures and total income.
- C.
c. Richer countries have more televisions, better nutrition, better health care, and longer life expectancy.
- D.
d. Productivity is not closely linked to government policies.
Correct Answer
D. d. Productivity is not closely linked to government policies. -
- 3.
A nation's standard of living is determined by
- A.
Productivity
- B.
Gross domestic product
- C.
National income
- D.
How much it has relative to others
Correct Answer
A. Productivity -
- 4.
Which of the following is correct?
- A.
a. Both levels and growth rates of real GDP per person are diverse across countries.
- B.
b. People in countries where real GDP growth was higher over the last 100 years have higher standards of living than people in all countries where real GDP growth was smaller.
- C.
c. The typical citizen of China has about as much real income as the typical American in 1950.
- D.
d. All of the above are correct.
Correct Answer
A. a. Both levels and growth rates of real GDP per person are diverse across countries. -
- 5.
Both Tom and Jerry work eight hours a day. Tom can produce six baskets of goods per hour while Jerry can produce just four baskets of the same goods per hour. It follows that Tom’s
- A.
a. productivity is greater than Jerry’s.
- B.
b. output is greater than Jerry’s.
- C.
c. standard of living is higher than Jerry’s.
- D.
d. All of the above are correct.
Correct Answer
D. d. All of the above are correct. -
- 6.
Which of the following is an example of a nonrenewable resource?
- A.
Oil
- B.
Livestock
- C.
Lumber
- D.
All of the above are correct
Correct Answer
A. Oil -
- 7.
Although technological knowledge and human capital are closely related, there is an important difference. A relevant metaphor would be
- A.
a. technological knowledge is the quality of society's textbooks, whereas human capital is the amount of time that the population has devoted to reading them.
- B.
b. technological knowledge is the textbook, whereas human capital is the ink.
- C.
c. technological knowledge is the thought process, whereas human capital is the calorie burn.
- D.
d. None of the above are relevant.
Correct Answer
A. a. technological knowledge is the quality of society's textbooks, whereas human capital is the amount of time that the population has devoted to reading them. -
- 8.
Other things equal, relatively poor countries tend to
- A.
a. grow slower than relatively rich countries; this is called the fall-behind effect.
- B.
b. grow slower than relatively rich countries; this is called the Malthus effect.
- C.
c. grow faster than relatively rich countries; this is called the catch-up effect.
- D.
d. grow faster than relatively rich countries; this is called the constant-returns-to-scale effect.
Correct Answer
C. c. grow faster than relatively rich countries; this is called the catch-up effect. -
- 9.
The logic behind the catch-up effect is that
- A.
a. workers in countries with low income will work harder than workers in countries with high incomes.
- B.
b. the capital stock in rich countries deteriorates more rapidly than the capital stock in poor countries.
- C.
c. new capital adds more to production in a country that doesn’t have much capital than in a country that already has much capital.
- D.
d. None of the above are correct.
Correct Answer
C. c. new capital adds more to production in a country that doesn’t have much capital than in a country that already has much capital. -
- 10.
If your American-based firm opens and operates a new plastics factory in Ireland, your firm is engaging in
- A.
a. foreign portfolio investment.
- B.
b. foreign financial investment.
- C.
c. indirect foreign investment.
- D.
d. foreign direct investment.
Correct Answer
D. d. foreign direct investment. -
- 11.
Foreign saving is used for domestic investment when foreigners engage in
- A.
Foreign direct investment
- B.
Foreign investment
- C.
Either a or b
- D.
Neither a nor b
Correct Answer
C. Either a or b -
- 12.
Suppose Ford builds a new car factory in Mexico. Future production from such an investment would
- A.
a. increase Mexico's GNP more than it would increase Mexico's GDP.
- B.
b. increase Mexico's GDP more than it would increase Mexico's GNP.
- C.
c. not affect Mexico's GNP, but increase Mexico's GDP.
- D.
d. have no affect on either GDP or GNP.
Correct Answer
B. b. increase Mexico's GDP more than it would increase Mexico's GNP. -
- 13.
The opening of a new American-owned factory in Liberia would tend to increase Liberia’s GDP more than it increases Liberia’s GNP because
- A.
a. some of the income from the factory accrues to people who do not live in Liberia.
- B.
b. gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad.
- C.
c. all of the income from the factory is included in Liberia’s GDP.
- D.
d. All of the above are correct.
Correct Answer
D. d. All of the above are correct. -
- 14.
If Japanese-owned Honda opens a factory in Ohio,
- A.
a. U.S. GNP rises more than U.S. GDP.
- B.
b. Japanese GDP rises more than Japanese GNP.
- C.
c. Both of the above are correct.
- D.
d. None of the above are correct.
Correct Answer
D. d. None of the above are correct. -
- 15.
Which of the following is generally an opportunity cost of investment in human capital?
- A.
a. increased earning potential
- B.
b. future job security
- C.
c. forgone wages at present
- D.
d. All of the above are correct.
Correct Answer
C. c. forgone wages at present -
- 16.
The term "Brain Drain" refers to
- A.
a. the emigration of many of the most highly educated workers from poor to rich countries.
- B.
b. the loss of knowledge due to a poor educational system in a country.
- C.
c. a situation where the population grows faster than the level of education.
- D.
d. a situation where one country robs technological knowledge from another country.
Correct Answer
A. a. the emigration of many of the most highly educated workers from poor to rich countries. -
- 17.
Inward-oriented polices
- A.
a. primarily concern the development of human capital.
- B.
b. in some ways are like prohibiting the use of certain technologies.
- C.
c. are generally supported by economists.
- D.
d. All of the above are correct.
Correct Answer
B. b. in some ways are like prohibiting the use of certain technologies. -
- 18.
A rapid increase in the number of workers is likely to
- A.
a. raise both real GDP and real GDP per person.
- B.
b. raise real GDP, but decrease real GDP per person.
- C.
c. raise real GDP per person, but decrease real GDP.
- D.
d. decrease both real GDP and real GDP per person.
Correct Answer
B. b. raise real GDP, but decrease real GDP per person. -
- 19.
Which of the following is not correct?
- A.
a. Educational attainment tends to be lowest in countries with the highest population growth.
- B.
b. Economists generally believe that decreasing population growth rates can increase output growth rates.
- C.
c. China allows only one child per family and couples that violate this rule are subject to substantial fines.
- D.
d. In developed countries, population growth is 3 percent; in many developing countries it is 5 percent.
Correct Answer
D. d. In developed countries, population growth is 3 percent; in many developing countries it is 5 percent. -
- 20.
Once one person discovers an idea, the idea generally enters society's pool of knowledge, which many other people can use. Therefore, knowledge is generally a
- A.
Private good
- B.
Public good
- C.
Normal good
- D.
Societal good
Correct Answer
B. Public good -
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Current Version
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Jan 10, 2013Quiz Edited by
ProProfs Editorial Team -
Feb 26, 2010Quiz Created by
Jeffusmc
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