Question 1

Countries with more economic freedom have levels of economic growth that

Accepted Answer

A)  are generally higher than those of nations with less economic freedom. 
B)  are similar to those of nations with less economic freedom since the level of investment, not economic freedom, determines the growth rate. 
C)  cannot continue at high levels because too little government planning is being done. 
D)  are generally lower than the growth rates of countries with less economic freedom. 
A)  are generally higher than those of nations with less economic freedom. 
B)  are similar to those of nations with less economic freedom since the level of investment, not economic freedom, determines the growth rate. 
C)  cannot continue at high levels because too little government planning is being done. 
D)  are generally lower than the growth rates of countries with less economic freedom. A

Question 2

How does investment as a share of GDP in countries with more economic freedom compare with economies that are less free? How does the productivity of investment in the freer economies compare with its productivity in the less free economies? How will this influence differences in growth rates and income levels? Explain.

Accepted Answer

Both investment as a share of GDP and the productivity of that investment are higher in countries with more economic freedom. This is highly important because investment and its productivity drive economic growth. Discovery of new improved products and production methods are also a driving force for economic growth. These discoveries generally lead to additional investment and improve productivity. Thus, improvements in technology and discovery of better ways of doing things are contributing factors to both the higher investment rates and greater investment productivity of the countries with more economic freedom.

Question 3

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Accepted Answer

A)  The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B)  None of the LDCs have been able to match the per capita income growth rate of the United States. 
C)  During the last two decades, the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more) have been LDCs. 
D)  Both a and c are correct. 
E)  All of the above are correct. 
A)  The per capita GDP of several poverty stricken African countries was lower in 2009 than in 1980. 
B)  None of the LDCs have been able to match the per capita income growth rate of the United States. 
C)  During the last two decades, the fastest growing countries in the world (those with annual real growth rates of 3.5 percent or more) have been LDCs. 
D)  Both a and c are correct. 
E)  All of the above are correct. D

Question 4

Some low-income countries generally remain poor because

Accepted Answer

A)  their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B)  they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C)  they are poorly endowed with natural resources, which are essential for long-term growth. 
D)  when the average income level is low, workers have little incentive to earn higher incomes. 
A)  their institutional arrangements and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B)  they are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C)  they are poorly endowed with natural resources, which are essential for long-term growth. 
D)  when the average income level is low, workers have little incentive to earn higher incomes.

Question 5

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

Accepted Answer

A)  grow more rapidly, but experience higher poverty rates. 
B)  achieve higher income levels per person but experience higher poverty rates. 
C)  grow more rapidly and achieve larger poverty rate reductions. 
D)  experience less rapid rates of economic growth and higher overall poverty rates. 
A)  grow more rapidly, but experience higher poverty rates. 
B)  achieve higher income levels per person but experience higher poverty rates. 
C)  grow more rapidly and achieve larger poverty rate reductions. 
D)  experience less rapid rates of economic growth and higher overall poverty rates.

Question 6

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

Accepted Answer

Perhaps it is easier to answer the secon

Question 7

The economic freedom of the world data indicate that during 1985-2013, economic freedom in less developed countries

Accepted Answer

A)  declined and the economic freedom gap compared with high-income developed countries expanded. 
B)  increased, but the economic freedom gap compared with high-income developed countries widened because economic freedom rose by an even larger amount in high-income countries. 
C)  declined but the economic freedom gap compared with high-income developed countries narrowed because there was an even larger decline in economic freedom in high-income countries. 
D)  increased, and the economic freedom gap compared with high-income developed countries narrowed. 
A)  declined and the economic freedom gap compared with high-income developed countries expanded. 
B)  increased, but the economic freedom gap compared with high-income developed countries widened because economic freedom rose by an even larger amount in high-income countries. 
C)  declined but the economic freedom gap compared with high-income developed countries narrowed because there was an even larger decline in economic freedom in high-income countries. 
D)  increased, and the economic freedom gap compared with high-income developed countries narrowed.

Question 8

Which of the following will increase economic freedom?

Accepted Answer

A)  Low rates of inflation and easy access to money that maintains its purchasing power. 
B)  High tariff rates. 
C)  Government spending that comprises a large share of the economy. 
D)  Rapid and unpredictable inflation. 
A)  Low rates of inflation and easy access to money that maintains its purchasing power. 
B)  High tariff rates. 
C)  Government spending that comprises a large share of the economy. 
D)  Rapid and unpredictable inflation.

Question 9

Which of the following provides the fuel for growth and achievement of high income levels?

Accepted Answer

A)  Gains from trade 
B)  Entrepreneurial discovery 
C)  Capital formation 
D)  All of the above 
A)  Gains from trade 
B)  Entrepreneurial discovery 
C)  Capital formation 
D)  All of the above

Question 10

Which of the following is a key characteristic of economic freedom?

Accepted Answer

A)  Institutions and policies supportive of voluntary exchange. 
B)  Freedom to compete. 
C)  Protection of people and their property from aggressors. 
D)  All of the above. 
A)  Institutions and policies supportive of voluntary exchange. 
B)  Freedom to compete. 
C)  Protection of people and their property from aggressors. 
D)  All of the above.

Question 11

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 12

In order to achieve high rates of economic growth countries must

Accepted Answer

A)  hold free (democratic) elections 
B)  maintain a government expenditure/GDP ratio of at least 40 percent. 
C)  restrain the growth of government, keep taxes low, remove trade barriers, and follow a monetary policy consistent with price stability. 
D)  obtain financial aid from foreign governments in order to get the growth process started. 
A)  hold free (democratic) elections 
B)  maintain a government expenditure/GDP ratio of at least 40 percent. 
C)  restrain the growth of government, keep taxes low, remove trade barriers, and follow a monetary policy consistent with price stability. 
D)  obtain financial aid from foreign governments in order to get the growth process started.

Question 13

Researchers have found that countries that were settled by Europeans who planned on staying permanently were

Accepted Answer

A)  more likely to protect private ownership rights and limit the power of the government. 
B)  less likely to protect private ownership rights and limit the power of the government. 
C)  more likely to protect private ownership, but less likely to limit the power of the government. 
D)  less likely to protect private ownership, but more likely to limit the power of the government. 
A)  more likely to protect private ownership rights and limit the power of the government. 
B)  less likely to protect private ownership rights and limit the power of the government. 
C)  more likely to protect private ownership, but less likely to limit the power of the government. 
D)  less likely to protect private ownership, but more likely to limit the power of the government.

Question 14

Nations will attract investment and its citizens will engage in productive activities when the institutions and policies of that country

Accepted Answer

A)  discourage market exchange. 
B)  protect people and their property and enforce contracts even-handedly. 
C)  abolish private property rights. 
D)  all of the above. 
A)  discourage market exchange. 
B)  protect people and their property and enforce contracts even-handedly. 
C)  abolish private property rights. 
D)  all of the above.

Question 15

Which of the following will increase economic freedom?

Accepted Answer

A)  Institutions and policies supportive of voluntary exchange. 
B)  High tariff rates. 
C)  High taxes. 
D)  Rapid and unpredictable inflation. 
E)  All of the above. 
A)  Institutions and policies supportive of voluntary exchange. 
B)  High tariff rates. 
C)  High taxes. 
D)  Rapid and unpredictable inflation. 
E)  All of the above.

Question 16

Which of the following about economic freedom is true?

Accepted Answer

A)  Low income countries that have adopted institutions and policies consistent with economic freedom have grown rapidly. 
B)  Low-income countries that have adopted institutions and policies consistent with economic freedom have failed to grow more rapidly than economies that are relatively unfree. 
C)  Economic freedom appears to improve the performance of developed economies, but not those that are less developed. 
D)  Economic freedom appears to improve the performance of less developed economies, but not those that already have a high degree of development. 
A)  Low income countries that have adopted institutions and policies consistent with economic freedom have grown rapidly. 
B)  Low-income countries that have adopted institutions and policies consistent with economic freedom have failed to grow more rapidly than economies that are relatively unfree. 
C)  Economic freedom appears to improve the performance of developed economies, but not those that are less developed. 
D)  Economic freedom appears to improve the performance of less developed economies, but not those that already have a high degree of development.

Question 17

Which of the following about economic growth is true?

Accepted Answer

A)  The fastest growing economies in the world (those with annual real growth rates of 3.5 percent or more) are mostly less developed countries. 
B)  The fastest growing economies in the world are mostly high-income industrial countries. 
C)  The slowest growing countries in the world, many of which are experiencing declines in per capita GDP, are less developed countries. 
D)  Both a and c are true. 
A)  The fastest growing economies in the world (those with annual real growth rates of 3.5 percent or more) are mostly less developed countries. 
B)  The fastest growing economies in the world are mostly high-income industrial countries. 
C)  The slowest growing countries in the world, many of which are experiencing declines in per capita GDP, are less developed countries. 
D)  Both a and c are true.

Question 18

Which of the following will increase economic freedom?

Accepted Answer

A)  Freedom to enter and compete in markets. 
B)  High tariff rates. 
C)  High taxes. 
D)  Rapid and unpredictable inflation. 
A)  Freedom to enter and compete in markets. 
B)  High tariff rates. 
C)  High taxes. 
D)  Rapid and unpredictable inflation.

Question 19

According to data on GDP growth between 1980 and 2014,

Accepted Answer

A)  poor nations stagnated, while the rich nations continued to grow. 
B)  poor nations grew rapidly, while the rich nations stagnated. 
C)  most of the world's rapidly growing countries were located in Africa. 
D)  many poor nations grew more rapidly than wealthy nations, while others continued to stagnate. 
A)  poor nations stagnated, while the rich nations continued to grow. 
B)  poor nations grew rapidly, while the rich nations stagnated. 
C)  most of the world's rapidly growing countries were located in Africa. 
D)  many poor nations grew more rapidly than wealthy nations, while others continued to stagnate.

Question 20

The per capita incomes of countries in the quartile with the most economic freedom during 2013 were

Accepted Answer

A)  slightly lower than those of the quartile of countries with the least economic freedom. 
B)  about the same as the quartile of countries with the least economic freedom. 
C)  about twice those of the countries with the least economic freedom. 
D)  about sixtimes those of the quartile of countries with the least economic freedom. 
A)  slightly lower than those of the quartile of countries with the least economic freedom. 
B)  about the same as the quartile of countries with the least economic freedom. 
C)  about twice those of the countries with the least economic freedom. 
D)  about sixtimes those of the quartile of countries with the least economic freedom.

Countries with more economic freedom have levels of economic growth that

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Some low-income countries generally remain poor because

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

The economic freedom of the world data indicate that during 1985-2013, economic freedom in less developed countries

Which of the following will increase economic freedom?

Which of the following provides the fuel for growth and achievement of high income levels?

Which of the following is a key characteristic of economic freedom?

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

In order to achieve high rates of economic growth countries must

Researchers have found that countries that were settled by Europeans who planned on staying permanently were

Nations will attract investment and its citizens will engage in productive activities when the institutions and policies of that country

Which of the following will increase economic freedom?

Which of the following about economic freedom is true?

Which of the following about economic growth is true?

Which of the following will increase economic freedom?

According to data on GDP growth between 1980 and 2014,

The per capita incomes of countries in the quartile with the most economic freedom during 2013 were

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

Creating an Environment for Growth and Prosperity

Gaining From International Trade

International Finance and the Foreign Exchange Market

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Exam 17: Institutions, Policies, and Cross-Country Differences in Income and Growth

Countries with more economic freedom have levels of economic growth that

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Some low-income countries generally remain poor because

The empirical evidence indicates that compared to economies that are less free, countries with institutions and policies more consistent with economic freedom

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

The economic freedom of the world data indicate that during 1985-2013, economic freedom in less developed countries

Which of the following will increase economic freedom?

Which of the following provides the fuel for growth and achievement of high income levels?

Which of the following is a key characteristic of economic freedom?

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

In order to achieve high rates of economic growth countries must

Researchers have found that countries that were settled by Europeans who planned on staying permanently were

Nations will attract investment and its citizens will engage in productive activities when the institutions and policies of that country

Which of the following will increase economic freedom?

Which of the following about economic freedom is true?

Which of the following about economic growth is true?

Which of the following will increase economic freedom?

According to data on GDP growth between 1980 and 2014,

The per capita incomes of countries in the quartile with the most economic freedom during 2013 were

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

Creating an Environment for Growth and Prosperity

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters