Question 1

If institutions in an economy change from being inclusive to extractive,the return-to-entrepreneurship schedule in the economy will ________.

Accepted Answer

A)  become vertical 
B)  become horizontal 
C)  shift leftward 
D)  shift rightward 
A)  become vertical 
B)  become horizontal 
C)  shift leftward 
D)  shift rightward

Question 2

The colonization policy adopted by the European countries between the fifteenth century and the middle of the twentieth century ________.

Accepted Answer

A)  was profit driven 
B)  was welfare driven 
C)  aimed to set up inclusive economic institutions in all nations 
D)  aimed to set up exclusive economic institutions in all nations 
A)  was profit driven 
B)  was welfare driven 
C)  aimed to set up inclusive economic institutions in all nations 
D)  aimed to set up exclusive economic institutions in all nations

Question 3

Institutions ________.

Accepted Answer

A)  are mostly beyond human control 
B)  do not affect incentives 
C)  cannot be changed over time 
D)  place constraints on human behavior, and these constraints may not be absolute 
A)  are mostly beyond human control 
B)  do not affect incentives 
C)  cannot be changed over time 
D)  place constraints on human behavior, and these constraints may not be absolute

Question 4

Extractive institutions control political power to ________.

Accepted Answer

A)  allow new businesses to enter and compete in a market 
B)  enforce property rights and an equitable legal system 
C)  transfer resources from the ruling party to society 
D)  transfer resources from society to the ruling party 
A)  allow new businesses to enter and compete in a market 
B)  enforce property rights and an equitable legal system 
C)  transfer resources from the ruling party to society 
D)  transfer resources from society to the ruling party

Question 5

If an individual is indifferent about being an entrepreneur,her ________ her opportunity cost of entrepreneurship.

Accepted Answer

A)  returns to entrepreneurship are likely to be equal to 
B)  returns to entrepreneurship are likely to be greater than 
C)  losses from entrepreneurship are likely to be equal to 
D)  losses from entrepreneurship are likely to be greater than 
A)  returns to entrepreneurship are likely to be equal to 
B)  returns to entrepreneurship are likely to be greater than 
C)  losses from entrepreneurship are likely to be equal to 
D)  losses from entrepreneurship are likely to be greater than

Question 6

According to Samuel Huntington,South Korea's economy experienced rapid economic growth because South Koreans valued thrift,investment,education,and discipline.In contrast,Ghana's economy did not grow as fast because the country had different social values.This argument claims that ________.

Accepted Answer

A)  culture is a fundamental cause of prosperity 
B)  institutions are a fundamental cause of prosperity 
C)  institutions are a proximate cause of prosperity 
D)  geographical location is a fundamental cause of prosperity 
A)  culture is a fundamental cause of prosperity 
B)  institutions are a fundamental cause of prosperity 
C)  institutions are a proximate cause of prosperity 
D)  geographical location is a fundamental cause of prosperity

Question 7

Urbanization is measured by ________.

Accepted Answer

A)  the fraction of the population living in towns with a population of more than 1,000 
B)  the fraction of the population living in towns with a population of more than 5,000 
C)  the ratio of the population living in rural areas to the number of people living in urban areas in a country 
D)  the ratio of the population living in urban areas to the number of people living in rural areas in a country 
A)  the fraction of the population living in towns with a population of more than 1,000 
B)  the fraction of the population living in towns with a population of more than 5,000 
C)  the ratio of the population living in rural areas to the number of people living in urban areas in a country 
D)  the ratio of the population living in urban areas to the number of people living in rural areas in a country

Question 8

What will happen if an economy transforms from being extractive to being inclusive?

Accepted Answer

A)  The return-to-entrepreneurship schedule will shift rightward, and the opportunity cost to entrepreneurship will decrease. 
B)  The return-to-entrepreneurship schedule will shift leftward, and the opportunity cost to entrepreneurship will decrease. 
C)  The return-to-entrepreneurship schedule will shift rightward, and the opportunity cost to entrepreneurship will increase. 
D)  The return-to-entrepreneurship schedule will shift leftward, and the opportunity cost to entrepreneurship will increase. 
A)  The return-to-entrepreneurship schedule will shift rightward, and the opportunity cost to entrepreneurship will decrease. 
B)  The return-to-entrepreneurship schedule will shift leftward, and the opportunity cost to entrepreneurship will decrease. 
C)  The return-to-entrepreneurship schedule will shift rightward, and the opportunity cost to entrepreneurship will increase. 
D)  The return-to-entrepreneurship schedule will shift leftward, and the opportunity cost to entrepreneurship will increase.

Question 9

The formal and informal rules governing the organization of a society on the whole,including its laws and regulations,are referred to as ________.

Accepted Answer

A)  institutions 
B)  organizational structure 
C)  cultural scenario 
D)  religious norms 
A)  institutions 
B)  organizational structure 
C)  cultural scenario 
D)  religious norms

Question 10

The reason differences in the growth stories of North Korea and South Korea can be viewed approximately as a natural experiment or an experiment of history is that ________.

Accepted Answer

A)  the culture in both countries was changing radically, while geography and institutions remained largely unchanged 
B)  the geography in both countries was changing radically, while culture and institutions remained largely unchanged 
C)  institutions in both countries were changing radically, while geography and culture remained largely unchanged 
D)  institutions, geography, and culture in both countries were changing radically 
A)  the culture in both countries was changing radically, while geography and institutions remained largely unchanged 
B)  the geography in both countries was changing radically, while culture and institutions remained largely unchanged 
C)  institutions in both countries were changing radically, while geography and culture remained largely unchanged 
D)  institutions, geography, and culture in both countries were changing radically

Question 11

A researcher claims that the standards of law and order are the basis of the economic prosperity of a certain country.This argument is based on the ________.

Accepted Answer

A)  culture hypothesis 
B)  geography hypothesis 
C)  institutions hypothesis 
D)  location hypothesis 
A)  culture hypothesis 
B)  geography hypothesis 
C)  institutions hypothesis 
D)  location hypothesis

Question 12

One of the reasons the Industrial Revolution started in Britain is that ________.

Accepted Answer

A)  Britain was a command economy 
B)  property rights were absent in Britain 
C)  economic agents in Britain opposed creative destruction 
D)  Britain had inclusive institutions 
A)  Britain was a command economy 
B)  property rights were absent in Britain 
C)  economic agents in Britain opposed creative destruction 
D)  Britain had inclusive institutions

Question 13

Consider two countries: Country A and Country B.Both countries are identical in all aspects except one.The institutions in Country A are inclusive,while the institutions in Country B are extractive.Given this information,which of the following statements is likely to be true?

Accepted Answer

A)  Country A is likely to have well-defined property rights, while Country B is likely to lack well-defined property rights. 
B)  Country B is likely to have well-defined property rights, while Country A is likely to lack well-defined property rights. 
C)  Both countries are likely to be totalitarian. 
D)  Both countries are likely to be capitalistic. 
A)  Country A is likely to have well-defined property rights, while Country B is likely to lack well-defined property rights. 
B)  Country B is likely to have well-defined property rights, while Country A is likely to lack well-defined property rights. 
C)  Both countries are likely to be totalitarian. 
D)  Both countries are likely to be capitalistic.

Question 14

Which of the following statements is true of the number of entrepreneurs in an economy?

Accepted Answer

A)  The number of entrepreneurs is likely to be higher in a command economy than in a market economy. 
B)  The number of entrepreneurs is likely to be the same in a command economy and a market economy. 
C)  The number of entrepreneurs is likely to be higher in an economy with inclusive institutions than in an economy with extractive institutions. 
D)  The number of entrepreneurs is likely to be the same in an economy with inclusive institutions and an economy with extractive institutions. 
A)  The number of entrepreneurs is likely to be higher in a command economy than in a market economy. 
B)  The number of entrepreneurs is likely to be the same in a command economy and a market economy. 
C)  The number of entrepreneurs is likely to be higher in an economy with inclusive institutions than in an economy with extractive institutions. 
D)  The number of entrepreneurs is likely to be the same in an economy with inclusive institutions and an economy with extractive institutions.

Question 15

Which of the following statements is true?

Accepted Answer

A)  Cultures in a nation are likely to change faster than the institutions in a nation. 
B)  The geography of a nation is likely to change faster than the institutions in a nation. 
C)  Geographical handicaps affected economic prosperity less 500 years ago than they do now. 
D)  Geographical handicaps affected economic prosperity more 500 years ago than they do now. 
A)  Cultures in a nation are likely to change faster than the institutions in a nation. 
B)  The geography of a nation is likely to change faster than the institutions in a nation. 
C)  Geographical handicaps affected economic prosperity less 500 years ago than they do now. 
D)  Geographical handicaps affected economic prosperity more 500 years ago than they do now.

Question 16

If an economic agent's returns to entrepreneurship are greater than his opportunity cost of entrepreneurship,he will ________.

Accepted Answer

A)  most likely choose to be an entrepreneur 
B)  most likely not choose to be an entrepreneur 
C)  always make profits if he chooses to be an entrepreneur 
D)  always incur losses if he chooses to be an entrepreneur 
A)  most likely choose to be an entrepreneur 
B)  most likely not choose to be an entrepreneur 
C)  always make profits if he chooses to be an entrepreneur 
D)  always incur losses if he chooses to be an entrepreneur

Question 17

Which of the following statements correctly highlights a difference between countries with extractive economic institutions and countries with inclusive economic institutions?

Accepted Answer

A)  Entry barriers for new businesses are likely to be higher in countries with extractive economic institutions than in countries with inclusive economic institutions. 
B)  Entry barriers for new businesses are likely to be lower in countries with extractive economic institutions than in countries with inclusive economic institutions. 
C)  Countries with extractive economic institutions typically have worse geographical conditions compared to countries with inclusive economic institutions. 
D)  Countries with extractive economic institutions typically have better geographical conditions compared to countries with inclusive economic institutions. 
A)  Entry barriers for new businesses are likely to be higher in countries with extractive economic institutions than in countries with inclusive economic institutions. 
B)  Entry barriers for new businesses are likely to be lower in countries with extractive economic institutions than in countries with inclusive economic institutions. 
C)  Countries with extractive economic institutions typically have worse geographical conditions compared to countries with inclusive economic institutions. 
D)  Countries with extractive economic institutions typically have better geographical conditions compared to countries with inclusive economic institutions.

Question 18

If an economy imposes entry barriers to entrepreneurship,the ________.

Accepted Answer

A)  opportunity cost of entrepreneurship will increase 
B)  opportunity cost of entrepreneurship will decrease 
C)  number of entrepreneurs in the economy will increase 
D)  aggregate output in the economy will increase 
A)  opportunity cost of entrepreneurship will increase 
B)  opportunity cost of entrepreneurship will decrease 
C)  number of entrepreneurs in the economy will increase 
D)  aggregate output in the economy will increase

Question 19

Which of the following statements is true?

Accepted Answer

A)  The fundamental causes of prosperity are effective only in the short run. 
B)  The proximate causes of prosperity are effective only in the short run. 
C)  The proximate causes of prosperity are shaped by the fundamental causes of prosperity. 
D)  The fundamental causes of prosperity are shaped by the proximate causes of prosperity. 
A)  The fundamental causes of prosperity are effective only in the short run. 
B)  The proximate causes of prosperity are effective only in the short run. 
C)  The proximate causes of prosperity are shaped by the fundamental causes of prosperity. 
D)  The fundamental causes of prosperity are shaped by the proximate causes of prosperity.

Question 20

Many communist dictators ban the adoption of new technologies to ________.

Accepted Answer

A)  reduce inequality in income 
B)  enhance economic growth 
C)  encourage creative destruction 
D)  discourage creative destruction 
A)  reduce inequality in income 
B)  enhance economic growth 
C)  encourage creative destruction 
D)  discourage creative destruction

If institutions in an economy change from being inclusive to extractive,the return-to-entrepreneurship schedule in the economy will ________.

The colonization policy adopted by the European countries between the fifteenth century and the middle of the twentieth century ________.

Institutions ________.

Extractive institutions control political power to ________.

If an individual is indifferent about being an entrepreneur,her ________ her opportunity cost of entrepreneurship.

According to Samuel Huntington,South Korea's economy experienced rapid economic growth because South Koreans valued thrift,investment,education,and discipline.In contrast,Ghana's economy did not grow as fast because the country had different social values.This argument claims that ________.

Urbanization is measured by ________.

What will happen if an economy transforms from being extractive to being inclusive?

The formal and informal rules governing the organization of a society on the whole,including its laws and regulations,are referred to as ________.

The reason differences in the growth stories of North Korea and South Korea can be viewed approximately as a natural experiment or an experiment of history is that ________.

A researcher claims that the standards of law and order are the basis of the economic prosperity of a certain country.This argument is based on the ________.

One of the reasons the Industrial Revolution started in Britain is that ________.

Consider two countries: Country A and Country B.Both countries are identical in all aspects except one.The institutions in Country A are inclusive,while the institutions in Country B are extractive.Given this information,which of the following statements is likely to be true?

Which of the following statements is true of the number of entrepreneurs in an economy?

Which of the following statements is true?

If an economic agent's returns to entrepreneurship are greater than his opportunity cost of entrepreneurship,he will ________.

Which of the following statements correctly highlights a difference between countries with extractive economic institutions and countries with inclusive economic institutions?

If an economy imposes entry barriers to entrepreneurship,the ________.

Which of the following statements is true?

Many communist dictators ban the adoption of new technologies to ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters

Exam 8: Why Isn't the Whole World Developed?

If institutions in an economy change from being inclusive to extractive,the return-to-entrepreneurship schedule in the economy will ________.

The colonization policy adopted by the European countries between the fifteenth century and the middle of the twentieth century ________.

Institutions ________.

Extractive institutions control political power to ________.

If an individual is indifferent about being an entrepreneur,her ________ her opportunity cost of entrepreneurship.

According to Samuel Huntington,South Korea's economy experienced rapid economic growth because South Koreans valued thrift,investment,education,and discipline.In contrast,Ghana's economy did not grow as fast because the country had different social values.This argument claims that ________.

Urbanization is measured by ________.

What will happen if an economy transforms from being extractive to being inclusive?

The formal and informal rules governing the organization of a society on the whole,including its laws and regulations,are referred to as ________.

The reason differences in the growth stories of North Korea and South Korea can be viewed approximately as a natural experiment or an experiment of history is that ________.

A researcher claims that the standards of law and order are the basis of the economic prosperity of a certain country.This argument is based on the ________.

One of the reasons the Industrial Revolution started in Britain is that ________.

Consider two countries: Country A and Country B.Both countries are identical in all aspects except one.The institutions in Country A are inclusive,while the institutions in Country B are extractive.Given this information,which of the following statements is likely to be true?

Which of the following statements is true of the number of entrepreneurs in an economy?

Which of the following statements is true?

If an economic agent's returns to entrepreneurship are greater than his opportunity cost of entrepreneurship,he will ________.

Which of the following statements correctly highlights a difference between countries with extractive economic institutions and countries with inclusive economic institutions?

If an economy imposes entry barriers to entrepreneurship,the ________.

Which of the following statements is true?

Many communist dictators ban the adoption of new technologies to ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, Supply, and Equilibrium

The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Aggregate Incomes

Economic Growth

Employment and Unemployment

Credit Markets

The Monetary System

Short-Run Fluctuations

Countercyclical Macroeconomic Policy

Macroeconomics and International Trade

Open Economy Macroeconomics

Filters