Question 1

Which of the following did Thomas Malthus believe would deter sustained increases in the growth of income per capita?

Accepted Answer

A)  excessive growth of government expenditures 
B)  rapid growth of population 
C)  the availability of natural resources 
D)  adverse climate conditions 
A)  excessive growth of government expenditures 
B)  rapid growth of population 
C)  the availability of natural resources 
D)  adverse climate conditions B

Question 2

Investment in both physical and human capital tends to enhance economic growth because it generally

Accepted Answer

A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low productivity workers. 
D)  encourages workers to unionize and thereby fight for higher wages. 
A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low productivity workers. 
D)  encourages workers to unionize and thereby fight for higher wages. B

Question 3

Economic growth is important because expansion in the output of goods and services

Accepted Answer

A)  necessarily creates more jobs (more work for people). 
B)  makes it possible for individuals to consume more and achieve higher living standards. 
C)  leads to an increase in the general level of prices. 
D)  generates additional tax revenues for the government. 
A)  necessarily creates more jobs (more work for people). 
B)  makes it possible for individuals to consume more and achieve higher living standards. 
C)  leads to an increase in the general level of prices. 
D)  generates additional tax revenues for the government. B

Question 4

Why is competition important? Do business firms operating in competitive markets have a strong incentive to serve the interests of consumers? Do business owners have to care about the interests of others if they are going to provide them with helpful products and services?

Accepted Answer

Competition is important because it prov

Question 5

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 6

Which of the following is a driving force underlying economic growth?

Accepted Answer

A)  trade restrictions that protect domestic businesses from competition with foreign producers 
B)  regulations that require businesses to obtain permission from the government before starting a new business 
C)  tax increases that expand the revenues of the government 
D)  entrepreneurial discovery and production of improved products 
A)  trade restrictions that protect domestic businesses from competition with foreign producers 
B)  regulations that require businesses to obtain permission from the government before starting a new business 
C)  tax increases that expand the revenues of the government 
D)  entrepreneurial discovery and production of improved products

Question 7

The successful introduction and adoption of a new product or process is called

Accepted Answer

A)  invention. 
B)  innovation. 
C)  economies of scale. 
D)  economic growth. 
A)  invention. 
B)  innovation. 
C)  economies of scale. 
D)  economic growth.

Question 8

Are abundant natural resources good or bad for economic growth?

Accepted Answer

The answer to this question is debatable

Question 9

Which of the following is true for the world as a whole?

Accepted Answer

A)  During the past 200 years, the income per person of the world has increased sharply, but there has been little change in the years of life expectancy at birth. 
B)  During the past 200 years, the years of life expectancy at birth has increased sharply, but there has been little change in the world's income per person. 
C)  During the 800 years between 1000 and 1800, the increases in both world income per person and life expectancy at birth were small, but both of these indicators have increased sharply during the past 200 years. 
D)  Both income per person   and life expectancy rose steadily during 1000-1800, but neither of these indicators have increased much during the past 200 years as the population of the world has become larger and larger. 
A)  During the past 200 years, the income per person of the world has increased sharply, but there has been little change in the years of life expectancy at birth. 
B)  During the past 200 years, the years of life expectancy at birth has increased sharply, but there has been little change in the world's income per person. 
C)  During the 800 years between 1000 and 1800, the increases in both world income per person and life expectancy at birth were small, but both of these indicators have increased sharply during the past 200 years. 
D)  Both income per person   and life expectancy rose steadily during 1000-1800, but neither of these indicators have increased much during the past 200 years as the population of the world has become larger and larger.

Question 10

Which of the following will be required for a country to move up the income ladder and achieve high-income status?

Accepted Answer

A)  rapid growth of the money supply. 
B)  restrictions limiting the import of goods from other nations, particularly low-wage countries. 
C)  tax incentives that encourage consumption rather than investment 
D)  sustained economic growth 
A)  rapid growth of the money supply. 
B)  restrictions limiting the import of goods from other nations, particularly low-wage countries. 
C)  tax incentives that encourage consumption rather than investment 
D)  sustained economic growth

Question 11

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Accepted Answer

A)  development of strong labor unions 
B)  more rapid population growth 
C)  investment expenditures that enhance the human capital of labor force participants 
D)  an international minimum wage law 
A)  development of strong labor unions 
B)  more rapid population growth 
C)  investment expenditures that enhance the human capital of labor force participants 
D)  an international minimum wage law

Question 12

Concerning economic growth, 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.

Question 13

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 14

During the past several decades, foreign aid to sub-Saharan Africa

Accepted Answer

A)  has been smaller than the aid to other regions, but the reduction in  the extreme poverty rate has been larger in Africa than in other areas of the world. 
B)  has been larger than the aid to other regions, but the reduction in  the extreme poverty rate has been smaller in Africa than in other areas of the world. 
C)  has declined and as a result the poverty rate in sub-Saharan Africa has risen sharply. 
D)  has risen and, as a result, the poverty rate in sub-Saharan Africa has declined substantially. 
A)  has been smaller than the aid to other regions, but the reduction in  the extreme poverty rate has been larger in Africa than in other areas of the world. 
B)  has been larger than the aid to other regions, but the reduction in  the extreme poverty rate has been smaller in Africa than in other areas of the world. 
C)  has declined and as a result the poverty rate in sub-Saharan Africa has risen sharply. 
D)  has risen and, as a result, the poverty rate in sub-Saharan Africa has declined substantially.

Question 15

The major sources of economic growth are

Accepted Answer

A)  gains from trade, entrepreneurial discovery, and investment. 
B)  high taxes, an expansion in the size of government, and restrictions on investments by foreigners. 
C)  rapid expansion in the supply of money, trade restrictions, and government licensing of business activities. 
D)  free and open elections and politicians who are willing to place the general welfare of the populace above their political ambitions. 
A)  gains from trade, entrepreneurial discovery, and investment. 
B)  high taxes, an expansion in the size of government, and restrictions on investments by foreigners. 
C)  rapid expansion in the supply of money, trade restrictions, and government licensing of business activities. 
D)  free and open elections and politicians who are willing to place the general welfare of the populace above their political ambitions.

Question 16

The historical record indicates that foreign aid has

Accepted Answer

A)  played a major role in helping formerly poor countries grow rapidly and achieve high income levels. 
B)  re-enforced corrupt governments and policies that stifle productive activities. 
C)  helped poor countries escape counterproductive policies imposed by authoritarian political leaders. 
D)  promoted economic growth, but slowed the movement toward political democracy. 
A)  played a major role in helping formerly poor countries grow rapidly and achieve high income levels. 
B)  re-enforced corrupt governments and policies that stifle productive activities. 
C)  helped poor countries escape counterproductive policies imposed by authoritarian political leaders. 
D)  promoted economic growth, but slowed the movement toward political democracy.

Question 17

In a market economy, what must an entrepreneur do in order to be successful?

Accepted Answer

A)  Purchase resources at lower prices than rivals. 
B)  Produce a good that can be sold for more than its production cost. 
C)  Obtain large subsidies from the government. 
D)  Hire workers at low wage rates. 
A)  Purchase resources at lower prices than rivals. 
B)  Produce a good that can be sold for more than its production cost. 
C)  Obtain large subsidies from the government. 
D)  Hire workers at low wage rates.

Question 18

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 19

Which of the following is most important if the living standards of people residing in a country are going to improve?

Accepted Answer

A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP 
A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP

Question 20

Which of the following would be most likely to enhance the growth rate of an economy?

Accepted Answer

A)  Imposition of a quota restricting the quantity of steel imports. 
B)  Gradual elimination of all tariffs over the next 10 years. 
C)  Legislation limiting the number of hours employees can work during a week to 32. 
D)  Legislation requiring employers to provide one year of severance pay to any employee who is dismissed from employment. 
A)  Imposition of a quota restricting the quantity of steel imports. 
B)  Gradual elimination of all tariffs over the next 10 years. 
C)  Legislation limiting the number of hours employees can work during a week to 32. 
D)  Legislation requiring employers to provide one year of severance pay to any employee who is dismissed from employment.

Which of the following did Thomas Malthus believe would deter sustained increases in the growth of income per capita?

Investment in both physical and human capital tends to enhance economic growth because it generally

Economic growth is important because expansion in the output of goods and services

Why is competition important? Do business firms operating in competitive markets have a strong incentive to serve the interests of consumers? Do business owners have to care about the interests of others if they are going to provide them with helpful products and services?

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 a driving force underlying economic growth?

The successful introduction and adoption of a new product or process is called

Are abundant natural resources good or bad for economic growth?

Which of the following is true for the world as a whole?

Which of the following will be required for a country to move up the income ladder and achieve high-income status?

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Concerning economic growth, which of the following is true?

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

During the past several decades, foreign aid to sub-Saharan Africa

The major sources of economic growth are

The historical record indicates that foreign aid has

In a market economy, what must an entrepreneur do in order to be successful?

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

Which of the following is most important if the living standards of people residing in a country are going to improve?

Which of the following would be most likely to enhance the growth rate of an economy?

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

Special Topics

Filters

Exam 16: Creating an Environment for Growth and Prosperity

Which of the following did Thomas Malthus believe would deter sustained increases in the growth of income per capita?

Investment in both physical and human capital tends to enhance economic growth because it generally

Economic growth is important because expansion in the output of goods and services

Why is competition important? Do business firms operating in competitive markets have a strong incentive to serve the interests of consumers? Do business owners have to care about the interests of others if they are going to provide them with helpful products and services?

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 a driving force underlying economic growth?

The successful introduction and adoption of a new product or process is called

Are abundant natural resources good or bad for economic growth?

Which of the following is true for the world as a whole?

Which of the following will be required for a country to move up the income ladder and achieve high-income status?

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Concerning economic growth, which of the following is true?

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

During the past several decades, foreign aid to sub-Saharan Africa

The major sources of economic growth are

The historical record indicates that foreign aid has

In a market economy, what must an entrepreneur do in order to be successful?

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

Which of the following is most important if the living standards of people residing in a country are going to improve?

Which of the following would be most likely to enhance the growth rate of an economy?

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

Special Topics

Filters