Question 1

If a country has a high level of income:

Accepted Answer

A)   its income must be rapidly increasing each year.
B)   it likely also has large amounts of physical and human capital.
C)   it must have a large endowment of natural resources.
D)   it likely has limited access to technology.E) B) and D)
F) A) and D)

Question 2

Effective, stable leadership is essential to:

Accepted Answer

A)   economic growth.
B)   the interest rate.
C)   increasing human capital.
D)   increasing population size.E) C) and D)
F) A) and D)

Question 3

The table shown displays GDP growth rates and GDP per capita values for different countries.  Which country has the highest rate of growth?

Accepted Answer

A)   China
B)   Ghana
C)   Italy
D)   United StatesE) All of the above
F) B) and D)

Question 4

Which of the following productive resources is considered fundamentally different from other resources with respect to supply and diminishing returns?

Accepted Answer

A)   Labor
B)   Land
C)   Physical capital
D)   TechnologyE) B) and D)
F) A) and B)

Question 5

Human capital:

Accepted Answer

A)   is always on the rise.
B)   can become outdated or deteriorate.
C)   is more productive when acquired as an adult.
D)   All of these are true.E) All of the above
F) None of the above

Question 6

The money for investment in physical capital comes from:

Accepted Answer

A)   the savings of ordinary households.
B)   government subsidies.
C)   shareholder dividends.
D)   tariffs collected from trade with foreign countries.E) A) and D)
F) B) and C)

Question 7

A country can acquire more physical capital if it:

Accepted Answer

A)   forgoes current consumption.
B)   borrows money to finance investment.
C)   delays investment in human capital.
D)   first harvests more natural resources.E) B) and D)
F) B) and C)

Question 8

Use the table shown, which displays income and growth rates, to assess convergence.  Which country is not converging?

Accepted Answer

A)   India
B)   Ghana
C)   Germany
D)   ItalyE) C) and D)
F) B) and C)

Question 9

The real GDP per capita growth rate is captured by subtracting the percentage changes in:

Accepted Answer

A)   both prices and population from the nominal GDP growth rate.
B)   both population and capital depreciation from the nominal GDP growth rate.
C)   prices from the nominal GDP growth rate.
D)   population from the nominal GDP growth rate.E) None of the above
F) A) and B)

Question 10

Which of the following is not an example of a natural resource?

Accepted Answer

A)   A river
B)   A forest
C)   A coal deposit
D)   MachineryE) None of the above
F) B) and C)

Question 11

According to the rule of 70, a country will double its real GDP per capita in 20 years if it grows at an average of _______ per year.

Accepted Answer

A)   2.0 percent
B)   3.5 percent
C)   5.0 percent
D)   7.0 percentE) A) and C)
F) A) and B)

Question 12

Using the growth accounting equation, if the growth rate of technology is 3 percent, the growth rate of labor is 2 percent, the growth rate of capital is 1 percent, and α = 0.25, then the growth rate of output can be estimated to be:

Accepted Answer

A)   4.25 percent.
B)   4 percent.
C)   6 percent.
D)   4.75 percent.E) C) and D)
F) A) and B)

Question 13

Productivity is generally measured as:

Accepted Answer

A)   output per worker.
B)   output divided by capital.
C)   the number of new products developed each year.
D)   a country's nominal output.E) A) and D)
F) A) and C)

Question 14

Convergence theory suggests that:

Accepted Answer

A)   poorer countries will grow faster than rich ones.
B)   all countries eventually will experience the same rate of growth.
C)   countries may have the same rate of growth but differing levels of income.
D)   All of these are true.E) B) and D)
F) B) and C)

Question 15

Economist Hernando de Soto found that poor enforcement of property rights in South America likely slowed _______.

Accepted Answer

A)   growth
B)   investments in education
C)   the unemployment rate
D)   public policyE) A) and B)
F) B) and C)

Question 16

Rapid economic growth:

Accepted Answer

A)   is a modern phenomenon, happening only in the last century or two.
B)   has happened in various places around the world since the 1300s.
C)   has occurred since 1500, but strong depressions since then have prevented real growth.
D)   is a modern phenomenon, happening only in the past decade.E) C) and D)
F) B) and D)

Question 17

Human capital contributes to growth because it helps workers in the economy:

Accepted Answer

A)   produce more with the same amount of physical capital.
B)   capture a larger share of company profits.
C)   work longer hours.
D)   All of these are true.E) All of the above
F) B) and C)

Question 18

Which of the following is an example of a natural resource?

Accepted Answer

A)   Serena Williams' athletic ability
B)   Yosemite National Park
C)   An Oculus virtual reality headset
D)   The cotton ginE) None of the above
F) A) and B)

Question 19

Education and training are ways to build _______ capital.

Accepted Answer

A)   human
B)   physical
C)   technological
D)   productiveE) C) and D)
F) B) and D)

Question 20

Total changes in GDP over time are:

Accepted Answer

A)   larger than the annual growth rate due to compounding.
B)   smaller than the annual growth rate due to seasonal adjustments.
C)   larger than the annual growth rate due to inflation.
D)   larger than the annual growth rate due to population growth.E) B) and D)
F) B) and C)

Exam 10: Economicgrowth

A country can acquire more physical capital if it:

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Education and training are ways to build _______ capital.

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Use the table shown, which displays income and growth rates, to assess convergence. Which country is not converging?

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The real GDP per capita growth rate is captured by subtracting the percentage changes in:

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Which of the following is not an example of a natural resource?

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Human capital:

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Rapid economic growth:

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According to the rule of 70, a country will double its real GDP per capita in 20 years if it grows at an average of _______ per year.

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Economist Hernando de Soto found that poor enforcement of property rights in South America likely slowed _______.

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Total changes in GDP over time are:

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The money for investment in physical capital comes from:

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Using the growth accounting equation, if the growth rate of technology is 3 percent, the growth rate of labor is 2 percent, the growth rate of capital is 1 percent, and α = 0.25, then the growth rate of output can be estimated to be:

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Convergence theory suggests that:

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Effective, stable leadership is essential to:

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Human capital contributes to growth because it helps workers in the economy:

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Which of the following is an example of a natural resource?

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If a country has a high level of income:

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Productivity is generally measured as:

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Which of the following productive resources is considered fundamentally different from other resources with respect to supply and diminishing returns?

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The table shown displays GDP growth rates and GDP per capita values for different countries. Which country has the highest rate of growth?

Correct AnswerverifiedShow Answer

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