Question 1

The "rule of 70" is a simple rule

Accepted Answer

A) (70 divided by the growth rate) that approximates the number of years it will take for income to double at various growth rates. 
B) (70 multiplied by the growth rate) that approximates the number of years it will take for income to double at various growth rates. 
C) (70 divided by the percentage of population over age 70) that can be used to approximate a nation's growth of real GDP. 
D) (70 multiplied by the percentage of population over age 70) that can be used to approximate a nation's growth of real GDP. 
A) (70 divided by the growth rate) that approximates the number of years it will take for income to double at various growth rates. 
B) (70 multiplied by the growth rate) that approximates the number of years it will take for income to double at various growth rates. 
C) (70 divided by the percentage of population over age 70) that can be used to approximate a nation's growth of real GDP. 
D) (70 multiplied by the percentage of population over age 70) that can be used to approximate a nation's growth of real GDP. A

Question 2

Which of the following is true?

Accepted Answer

A) Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B) Human and physical capital investments are largely irrelevant to economic growth. 
C) Poor nations grow slowly because they do not have access to modern technology 
D) A favorable institutional environment will tend to attract more investment in human and physical capital. 
A) Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B) Human and physical capital investments are largely irrelevant to economic growth. 
C) Poor nations grow slowly because they do not have access to modern technology 
D) A favorable institutional environment will tend to attract more investment in human and physical capital. D

Question 3

In a market economy, what determines whether an entrepreneur will continue in business or terminate the production of a new product?

Accepted Answer

A) government regulations 
B) licensing by industrial development agencies 
C) the profit or loss of the business 
D) the taxes paid to the government relative to the subsidies received 
A) government regulations 
B) licensing by industrial development agencies 
C) the profit or loss of the business 
D) the taxes paid to the government relative to the subsidies received C

Question 4

Which of the following is true regarding the per person income of the world during the past 1000 years

Accepted Answer

A) The world's income per person has approximately doubled during the past 1000 years and most of that growth has occurred since 1900. 
B) The world's income per person changed very little during the 800 years prior to 1813, but it has increased by nearly tenfold during the past 200 years. 
C) The world's income per person has grown steadily during the past 1000 years. 
D) The world's per person income grew at an annual rate of more than 2 percent during 1000-1813, but the annual growth rate has declined as the population increased during the past 200 years. 
A) The world's income per person has approximately doubled during the past 1000 years and most of that growth has occurred since 1900. 
B) The world's income per person changed very little during the 800 years prior to 1813, but it has increased by nearly tenfold during the past 200 years. 
C) The world's income per person has grown steadily during the past 1000 years. 
D) The world's per person income grew at an annual rate of more than 2 percent during 1000-1813, but the annual growth rate has declined as the population increased during the past 200 years.

Question 5

Which of the following is true of the per person income of the West (Western Europe and its offshoots of the United States, Canada, Australia, and New Zealand)

Accepted Answer

A) It has increased each century and grown steadily since 1500. 
B) It is now approximately 20 times greater than the figure of 200 years ago. 
C) It rose steadily between 1000 and 1800, but income growth has slowed during the past 200 years. 
D) While income per person has increased since 1800, there has been little change in life expectancy and other indicators of quality of life during this time period. 
A) It has increased each century and grown steadily since 1500. 
B) It is now approximately 20 times greater than the figure of 200 years ago. 
C) It rose steadily between 1000 and 1800, but income growth has slowed during the past 200 years. 
D) While income per person has increased since 1800, there has been little change in life expectancy and other indicators of quality of life during this time period.

Question 6

When the markets of an economy are more competitive, economic growth

Accepted Answer

A) is harmed by the resulting low rates of profit for industry. 
B) is enhanced because producers have a stronger incentive to provide goods efficiently. 
C) will be slower because prices do not rise as rapidly. 
D) is unaffected. 
A) is harmed by the resulting low rates of profit for industry. 
B) is enhanced because producers have a stronger incentive to provide goods efficiently. 
C) will be slower because prices do not rise as rapidly. 
D) is unaffected.

Question 7

Which of the following would be most likely to help the residents of a nation produce a larger output and consume a wide variety of products at economical prices?

Accepted Answer

A) imposition of tariffs on imported goods 
B) quotas that protect domestic businesses against foreign producers that pay workers low wages 
C) free trade 
D) exchange rate controls 
A) imposition of tariffs on imported goods 
B) quotas that protect domestic businesses against foreign producers that pay workers low wages 
C) free trade 
D) exchange rate controls

Question 8

Which of the following will tend to retard the growth and prosperity of a country?

Accepted Answer

A) imposition of price controls and regulations that restrain domestic and international trade 
B) an expansionary monetary policy that leads to high rates of inflation 
C) high marginal tax rates 
D) all of the above 
A) imposition of price controls and regulations that restrain domestic and international trade 
B) an expansionary monetary policy that leads to high rates of inflation 
C) high marginal tax rates 
D) all of the above

Question 9

Which of the following is true?

Accepted Answer

A) The United States is rich because it has democratic political institutions. 
B) Economic growth is primarily the result of gains from trade, discovery of better ways of doing things, and capital investment. 
C) Without foreign aid, poor countries are unable to break the cycle of poverty, low savings and investment, and economic stagnation. 
D) Most all countries with an abundance of natural resources have been able to achieve rapid growth and high levels of per capita income. 
A) The United States is rich because it has democratic political institutions. 
B) Economic growth is primarily the result of gains from trade, discovery of better ways of doing things, and capital investment. 
C) Without foreign aid, poor countries are unable to break the cycle of poverty, low savings and investment, and economic stagnation. 
D) Most all countries with an abundance of natural resources have been able to achieve rapid growth and high levels of per capita income.

Question 10

Which of the following is true of sub-Saharan Africa?

Accepted Answer

A) Sub-Saharan Africa has received very little foreign aid and as a result, the poverty rate in the region is high. 
B) Sub-Saharan Africa has received more foreign aid than any other region and nonetheless the poverty rate in the region remains high. 
C) The economic freedom rating of sub-Saharan African countries is high, but the poverty rate in the region is still the highest in the world. 
D) the reduction in the poverty rate in sub-Saharan Africa has been faster than for other regions of the world during the past quarter of a century. 
A) Sub-Saharan Africa has received very little foreign aid and as a result, the poverty rate in the region is high. 
B) Sub-Saharan Africa has received more foreign aid than any other region and nonetheless the poverty rate in the region remains high. 
C) The economic freedom rating of sub-Saharan African countries is high, but the poverty rate in the region is still the highest in the world. 
D) the reduction in the poverty rate in sub-Saharan Africa has been faster than for other regions of the world during the past quarter of a century.

Question 11

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Accepted Answer

A) higher tax rates 
B) a higher rate of investment 
C) a smaller trade sector 
D) greater use of taxation to transfer income from the rich to the poor 
A) higher tax rates 
B) a higher rate of investment 
C) a smaller trade sector 
D) greater use of taxation to transfer income from the rich to the poor

Question 12

Which of the following goods are available at highly economical prices because the use of mass production techniques substantially reduces their per unit production costs?

Accepted Answer

A) automobiles 
B) DVD players 
C) microwave ovens 
D) all of the above 
A) automobiles 
B) DVD players 
C) microwave ovens 
D) all of the above

Question 13

Economic growth will

Accepted Answer

A) reduce the future real GDP of an economy. 
B) expand the production possibilities of an economy. 
C) increase an economy's nominal income, but not its real income. 
D) increase real output, but the real income level of the country will decline. 
A) reduce the future real GDP of an economy. 
B) expand the production possibilities of an economy. 
C) increase an economy's nominal income, but not its real income. 
D) increase real output, but the real income level of the country will decline.

Question 14

How does private ownership and a competitive market affect the efficiency of economic organization?

Accepted Answer

Private ownership of resources, includin

Question 15

Which of the following will be most likely to contribute to the growth of a less-developed country?

Accepted Answer

A) price controls that keep the cost of agricultural products low 
B) rapid population growth 
C) exchange rate controls and export restrictions 
D) secure property rights and low marginal tax rates 
A) price controls that keep the cost of agricultural products low 
B) rapid population growth 
C) exchange rate controls and export restrictions 
D) secure property rights and low marginal tax rates

Question 16

When the government is heavily involved in the regulation of business activity, entrepreneurs will be encourage to spend more time and resources on

Accepted Answer

A) research and the development of better products. 
B) keeping their production costs low. 
C) rent seeking. 
D) productive activities and less on political lobbying. 
A) research and the development of better products. 
B) keeping their production costs low. 
C) rent seeking. 
D) productive activities and less on political lobbying.

Question 17

Which of the following is true?

Accepted Answer

A) Real GDP is a measure of income, but not output. 
B) Real GDP is a measure of output, but not income. 
C) Real GDP is a measure of inflation. 
D) Growth of output is necessary for the growth of income. 
A) Real GDP is a measure of income, but not output. 
B) Real GDP is a measure of output, but not income. 
C) Real GDP is a measure of inflation. 
D) Growth of output is necessary for the growth of income.

Question 18

When individuals and businesses are permitted to trade freely over a larger market area,

Accepted Answer

A) wages will decline to the level of the poorest country in the region. 
B) the monopoly power of business firms will increase. 
C) they will be able to produce a larger output and consume a more diverse bundle of goods. 
D) businesses will be able to earn higher profits, but the income levels of individuals will decline. 
A) wages will decline to the level of the poorest country in the region. 
B) the monopoly power of business firms will increase. 
C) they will be able to produce a larger output and consume a more diverse bundle of goods. 
D) businesses will be able to earn higher profits, but the income levels of individuals will decline.

Question 19

Which of the following will discourage investment?

Accepted Answer

A) well-defined property rights 
B) monetary instability 
C) a low and steady rate of inflation 
D) low tax rates 
A) well-defined property rights 
B) monetary instability 
C) a low and steady rate of inflation 
D) low tax rates

Question 20

If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective?

Accepted Answer

A) imposition of price controls on agricultural products in an effort to keep food cheap 
B) a public-sector investment program financed by highly progressive taxation 
C) low taxes, a monetary policy consistent with long-run price stability, and the abolition of price controls and trade restrictions 
D) expansionary monetary policy designed to keep interest rates low 
A) imposition of price controls on agricultural products in an effort to keep food cheap 
B) a public-sector investment program financed by highly progressive taxation 
C) low taxes, a monetary policy consistent with long-run price stability, and the abolition of price controls and trade restrictions 
D) expansionary monetary policy designed to keep interest rates low

The "rule of 70" is a simple rule

Which of the following is true?

In a market economy, what determines whether an entrepreneur will continue in business or terminate the production of a new product?

Which of the following is true regarding the per person income of the world during the past 1000 years

Which of the following is true of the per person income of the West (Western Europe and its offshoots of the United States, Canada, Australia, and New Zealand)

When the markets of an economy are more competitive, economic growth

Which of the following would be most likely to help the residents of a nation produce a larger output and consume a wide variety of products at economical prices?

Which of the following will tend to retard the growth and prosperity of a country?

Which of the following is true?

Which of the following is true of sub-Saharan Africa?

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Which of the following goods are available at highly economical prices because the use of mass production techniques substantially reduces their per unit production costs?

Economic growth will

How does private ownership and a competitive market affect the efficiency of economic organization?

Which of the following will be most likely to contribute to the growth of a less-developed country?

When the government is heavily involved in the regulation of business activity, entrepreneurs will be encourage to spend more time and resources on

Which of the following is true?

When individuals and businesses are permitted to trade freely over a larger market area,

Which of the following will discourage investment?

If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Exam 16: Creating an Environment for Growth and Prosperity

The "rule of 70" is a simple rule

Which of the following is true?

In a market economy, what determines whether an entrepreneur will continue in business or terminate the production of a new product?

Which of the following is true regarding the per person income of the world during the past 1000 years

Which of the following is true of the per person income of the West (Western Europe and its offshoots of the United States, Canada, Australia, and New Zealand)

When the markets of an economy are more competitive, economic growth

Which of the following would be most likely to help the residents of a nation produce a larger output and consume a wide variety of products at economical prices?

Which of the following will tend to retard the growth and prosperity of a country?

Which of the following is true?

Which of the following is true of sub-Saharan Africa?

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Which of the following goods are available at highly economical prices because the use of mass production techniques substantially reduces their per unit production costs?

Economic growth will

How does private ownership and a competitive market affect the efficiency of economic organization?

Which of the following will be most likely to contribute to the growth of a less-developed country?

When the government is heavily involved in the regulation of business activity, entrepreneurs will be encourage to spend more time and resources on

Which of the following is true?

When individuals and businesses are permitted to trade freely over a larger market area,

Which of the following will discourage investment?

If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective?

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

Economic Fluctuations, Unemployment, and Inflation

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters