Question 1

Evidence from the developing countries supports the predictions of economic growth theory.

Accepted Answer

A) True 
 B)False  False

Question 2

An important precondition that enables a country to adopt existing technology is

Accepted Answer

A) the establishment of a bourgeois class. 
B) a supply of well-trained and highly skilled workers. 
C) the existence of a manufacturing sector. 
D) the establishment of an informal sector. 
E) the establishment of a service sector. 
A) the establishment of a bourgeois class. 
B) a supply of well-trained and highly skilled workers. 
C) the existence of a manufacturing sector. 
D) the establishment of an informal sector. 
E) the establishment of a service sector. B

Question 3

The theory of diminishing returns leads to the prediction that poor countries will catch up with rich countries.

Accepted Answer

A) True 
 B)False  True

Question 4

A country with a population growth of 5 percent and capital growth of 10 percent is better off than a country with population growth of 2 percent and capital growth of 2 percent. Please answer true or false and explain.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true?

Accepted Answer

A) There is no correlation between a state's per capita income in 1880 and its growth rate over the past century. 
B) States with low income per capita in 1880 had the same growth rates over the past century as states that had higher income per capita in 1880. 
C) States with low income per capita in 1880 had higher growth rates over the past century than states that had higher income per capita in 1880. 
D) States with low income per capita in 1880 had lower growth rates over the past century than states that had higher income per capita in 1880. 
E) States with low income per capita in 1880 used aggressive growth policies to accelerate their growth rates. 
A) There is no correlation between a state's per capita income in 1880 and its growth rate over the past century. 
B) States with low income per capita in 1880 had the same growth rates over the past century as states that had higher income per capita in 1880. 
C) States with low income per capita in 1880 had higher growth rates over the past century than states that had higher income per capita in 1880. 
D) States with low income per capita in 1880 had lower growth rates over the past century than states that had higher income per capita in 1880. 
E) States with low income per capita in 1880 used aggressive growth policies to accelerate their growth rates.

Question 6

Which of the following is considered an emerging market country?

Accepted Answer

A) United States 
B) Japan 
C) Mexico 
D) Germany 
E) Italy 
A) United States 
B) Japan 
C) Mexico 
D) Germany 
E) Italy

Question 7

Two countries that don't conform to the North-South income distribution pattern are

Accepted Answer

A) Japan and Uruguay. 
B) Korea and Japan. 
C) Australia and New Zealand. 
D) Italy and Portugal. 
E) Norway and Ireland. 
A) Japan and Uruguay. 
B) Korea and Japan. 
C) Australia and New Zealand. 
D) Italy and Portugal. 
E) Norway and Ireland.

Question 8

Other things being equal, a country with population growth of 5 percent will grow more slowly than a country with population growth of 2 percent. Please answer true or false and explain.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true?

Accepted Answer

A) Bangladesh, Indonesia, South Korea, and Ethiopia had the same level of real GDP per capita in 1960 as well as the same rate of economic growth between 1960 and 2005. 
B) Bangladesh, Indonesia, South Korea, and Ethiopia had the same rate of economic growth between 1960 and 2005; however, South Korea's and Singapore's levels of real GDP per capita were twice that of Bangladesh and Ethiopia. 
C) Indonesia's and South Korea's growth rates between 1960 and 2005 and their level of per capita real GDP in 1960 were twice that of Bangladesh and Ethiopia. 
D) Indonesia's and South Korea's growth rates between 1960 and 2005 were much higher than Bangladesh's and Ethiopia's even though the level of real per capita GDP in 1960 was almost the same for all four of these countries. 
E) What happened in terms of economic growth to Bangladesh and Ethiopia between 1960 and 2005 did not happen to any other poor countries. 
A) Bangladesh, Indonesia, South Korea, and Ethiopia had the same level of real GDP per capita in 1960 as well as the same rate of economic growth between 1960 and 2005. 
B) Bangladesh, Indonesia, South Korea, and Ethiopia had the same rate of economic growth between 1960 and 2005; however, South Korea's and Singapore's levels of real GDP per capita were twice that of Bangladesh and Ethiopia. 
C) Indonesia's and South Korea's growth rates between 1960 and 2005 and their level of per capita real GDP in 1960 were twice that of Bangladesh and Ethiopia. 
D) Indonesia's and South Korea's growth rates between 1960 and 2005 were much higher than Bangladesh's and Ethiopia's even though the level of real per capita GDP in 1960 was almost the same for all four of these countries. 
E) What happened in terms of economic growth to Bangladesh and Ethiopia between 1960 and 2005 did not happen to any other poor countries.

Question 10

The establishment of individual property rights played an important role in European economic growth.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a unique feature of poor countries?

Accepted Answer

A) Limited stocks of capital per worker 
B) Diminishing returns to capital 
C) Poor distribution systems 
D) Poor educational systems 
E) Political repression 
A) Limited stocks of capital per worker 
B) Diminishing returns to capital 
C) Poor distribution systems 
D) Poor educational systems 
E) Political repression

Question 12

After World War II, in order to reform the international monetary system, the

Accepted Answer

A) World Bank and the International Monetary Fund (IMF) were established. 
B) Federal Reserve was made independent of the U.S.Treasury. 
C) European Central Bank was created. 
D) League of Nations was created. 
E) United Nations was created. 
A) World Bank and the International Monetary Fund (IMF) were established. 
B) Federal Reserve was made independent of the U.S.Treasury. 
C) European Central Bank was created. 
D) League of Nations was created. 
E) United Nations was created.

Question 13

Today, there are more than 3 billion people, which is about half the human race, who live on less than the equivalent of $2 per day.

Accepted Answer

A) True 
 B)False

Question 14

The establishment and recognition by courts of law of individual property rights

Accepted Answer

A) made it more difficult for entrepreneurs to earn profits. 
B) has been shown to have little effect on technological development. 
C) did not occur until the twentieth century. 
D) enabled entrepreneurs to keep the profits they earned. 
E) enabled nobles and kings to confiscate profits. 
A) made it more difficult for entrepreneurs to earn profits. 
B) has been shown to have little effect on technological development. 
C) did not occur until the twentieth century. 
D) enabled entrepreneurs to keep the profits they earned. 
E) enabled nobles and kings to confiscate profits.

Question 15

An emerging market is a country that

Accepted Answer

A) became a country after World War II. 
B) was once poor but has since grown rapidly. 
C) is at a stage of development ahead of an advanced economy. 
D) has experienced no economic development. 
E) has always depended on the growth of other countries. 
A) became a country after World War II. 
B) was once poor but has since grown rapidly. 
C) is at a stage of development ahead of an advanced economy. 
D) has experienced no economic development. 
E) has always depended on the growth of other countries.

Question 16

Which of the following increases the likelihood of poor countries catching up to rich countries, and which decreases the likelihood? Explain.

Accepted Answer

The answer of Which of the following increases the likelihood...

Question 17

What are some of the benefits of allowing and encouraging foreign investment in a country?

Accepted Answer

Within a country, S = I + X. If the econ

Question 18

The main purpose of the catch-up line is to show

Accepted Answer

A) how uneven the growth rate has been in different countries or regions of the world. 
B) income inequality between different countries or regions. 
C) how well the productivity level predicts the rate of productivity growth. 
D) how well the productivity growth rate predicts the level of productivity. 
E) that catch-up has occurred. 
A) how uneven the growth rate has been in different countries or regions of the world. 
B) income inequality between different countries or regions. 
C) how well the productivity level predicts the rate of productivity growth. 
D) how well the productivity growth rate predicts the level of productivity. 
E) that catch-up has occurred.

Question 19

Between 1960 and 2005 Indonesia and South Korea had higher growth rates than Nigeria and Ethiopia even though the levels of real per capita income in Indonesia and South Korea were much higher in 1960.

Accepted Answer

A) True 
 B)False

Question 20

All of the following can prevent poor countries to increase capital per worker except

Accepted Answer

A) low population growth. 
B) low saving rate. 
C) low foreign investment inflow. 
D) low domestic investment. 
E) absence of foreign aid. 
A) low population growth. 
B) low saving rate. 
C) low foreign investment inflow. 
D) low domestic investment. 
E) absence of foreign aid.

Exam 28: Economic Growth Around the World

Evidence from the developing countries supports the predictions of economic growth theory.

An important precondition that enables a country to adopt existing technology is

The theory of diminishing returns leads to the prediction that poor countries will catch up with rich countries.

A country with a population growth of 5 percent and capital growth of 10 percent is better off than a country with population growth of 2 percent and capital growth of 2 percent. Please answer true or false and explain.

Which of the following statements is true?

Which of the following is considered an emerging market country?

Two countries that don't conform to the North-South income distribution pattern are

Other things being equal, a country with population growth of 5 percent will grow more slowly than a country with population growth of 2 percent. Please answer true or false and explain.

Which of the following statements is true?

The establishment of individual property rights played an important role in European economic growth.

Which of the following is not a unique feature of poor countries?

After World War II, in order to reform the international monetary system, the

Today, there are more than 3 billion people, which is about half the human race, who live on less than the equivalent of $2 per day.

The establishment and recognition by courts of law of individual property rights

An emerging market is a country that

Which of the following increases the likelihood of poor countries catching up to rich countries, and which decreases the likelihood? Explain.

What are some of the benefits of allowing and encouraging foreign investment in a country?

The main purpose of the catch-up line is to show

Between 1960 and 2005 Indonesia and South Korea had higher growth rates than Nigeria and Ethiopia even though the levels of real per capita income in Indonesia and South Korea were much higher in 1960.

All of the following can prevent poor countries to increase capital per worker except

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

International Trade

International Finance

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