Question 1

A hypothesis states that religious teachings,family ties,and/or social norms are the causes of economic prosperity.According to this hypothesis,________.

Accepted Answer

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

Question 2

Which of the following is a valid shortcoming of the use of foreign aid to eradicate poverty?

Accepted Answer

A)  It can lead to the polarization of the world economy. 
B)  It may not lead to a sizable increase in physical capital in poorer countries. 
C)  It is difficult to transfer aid to poor countries. 
D)  It mostly leads to the transfer of resources among rich countries. 
A)  It can lead to the polarization of the world economy. 
B)  It may not lead to a sizable increase in physical capital in poorer countries. 
C)  It is difficult to transfer aid to poor countries. 
D)  It mostly leads to the transfer of resources among rich countries.

Question 3

Which of the following statements is true?

Accepted Answer

A)  Both extractive and inclusive institutions fail to foster economic activity, productivity growth, and economic activity. 
B)  Both extractive and inclusive institutions foster economic activity, productivity growth, and economic activity. 
C)  Extractive economic institutions foster economic activity, productivity growth, and economic prosperity, while inclusive institutions fail to do so. 
D)  Inclusive economic institutions foster economic activity, productivity growth, and economic prosperity, while extractive institutions fail to do so. 
A)  Both extractive and inclusive institutions fail to foster economic activity, productivity growth, and economic activity. 
B)  Both extractive and inclusive institutions foster economic activity, productivity growth, and economic activity. 
C)  Extractive economic institutions foster economic activity, productivity growth, and economic prosperity, while inclusive institutions fail to do so. 
D)  Inclusive economic institutions foster economic activity, productivity growth, and economic prosperity, while extractive institutions fail to do so.

Question 4

Consider an economy where there are initially no barriers to entry into markets for new entrepreneurs.Everything else remaining unchanged,if the government of the nation decides to impose entry barriers,how will it affect the number of entrepreneurs in the economy? Use a return-to-entrepreneurship curve to illustrate.

Accepted Answer

The following figure illustrates the ret

Question 5

One of the methods of reducing the geographical disadvantage faced by poorer countries is to ________.

Accepted Answer

A)  undertake large-scale disease eradication programs 
B)  adopt a socialist economic system 
C)  borrow financial resources at market interest rates 
D)  reduce participation in international trade 
A)  undertake large-scale disease eradication programs 
B)  adopt a socialist economic system 
C)  borrow financial resources at market interest rates 
D)  reduce participation in international trade

Question 6

Institutional reversal refers to the fact that ________.

Accepted Answer

A)  Europeans established more extractive institutions in places that were previously more developed and set up more inclusive institutions that were previously less developed 
B)  Europeans established more extractive institutions in places that were previously less developed and set up more inclusive institutions that were previously more developed 
C)  the same institutions that were highly extractive in the year 1500 slowly changed into inclusive institutions as a result of modernization 
D)  the same institutions that were highly inclusive in the year 1500 slowly changed into extractive institutions as a result of modernization 
A)  Europeans established more extractive institutions in places that were previously more developed and set up more inclusive institutions that were previously less developed 
B)  Europeans established more extractive institutions in places that were previously less developed and set up more inclusive institutions that were previously more developed 
C)  the same institutions that were highly extractive in the year 1500 slowly changed into inclusive institutions as a result of modernization 
D)  the same institutions that were highly inclusive in the year 1500 slowly changed into extractive institutions as a result of modernization

Question 7

Countries in sub-Saharan Africa are economically disadvantaged because infectious diseases spread in these countries relatively easily.This statement reflects 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 8

Which of the following may partially reduce the geographical disadvantages faced by poorer countries?

Accepted Answer

A)  Restricting the immigration of skilled workers from rich countries to the poorer countries 
B)  Transferring technology from richer to poorer countries 
C)  Limiting the use of natural resources so that they can be preserved for future use 
D)  Limiting the participation of poorer countries in international trade 
A)  Restricting the immigration of skilled workers from rich countries to the poorer countries 
B)  Transferring technology from richer to poorer countries 
C)  Limiting the use of natural resources so that they can be preserved for future use 
D)  Limiting the participation of poorer countries in international trade

Question 9

Which of the following statements correctly identifies an advantage of using foreign aid to eradicate poverty?

Accepted Answer

A)  It leads to a redistribution of income around the world. 
B)  It is extremely efficient in countries where institutions are extractive. 
C)  It directly increases the efficiency of production in poorer countries. 
D)  Its flow is transparent and can be questioned by all individuals in the receiving country. 
A)  It leads to a redistribution of income around the world. 
B)  It is extremely efficient in countries where institutions are extractive. 
C)  It directly increases the efficiency of production in poorer countries. 
D)  Its flow is transparent and can be questioned by all individuals in the receiving country.

Question 10

Which of the following is a good proxy for the measure of economic prosperity when GDP per capita data are unavailable?

Accepted Answer

A)  Measurements of urbanization 
B)  Measurements of consumer surplus 
C)  Measurements of producer surplus 
D)  Measurements of balance of payments 
A)  Measurements of urbanization 
B)  Measurements of consumer surplus 
C)  Measurements of producer surplus 
D)  Measurements of balance of payments

Question 11

Foreign aid ________.

Accepted Answer

A)  is limited to African countries 
B)  flows from developing nations to developed nations 
C)  can lead to corrupt practices in countries ruled by dictators 
D)  is extremely effective in economies with extractive institutions 
A)  is limited to African countries 
B)  flows from developing nations to developed nations 
C)  can lead to corrupt practices in countries ruled by dictators 
D)  is extremely effective in economies with extractive institutions

Question 12

The relationship between urbanization and GDP per capita is likely to be represented by a(n)________.

Accepted Answer

A)  U-shaped curve 
B)  inverted U-shaped curve 
C)  upward-sloping curve 
D)  downward-sloping curve 
A)  U-shaped curve 
B)  inverted U-shaped curve 
C)  upward-sloping curve 
D)  downward-sloping curve

Question 13

Adam Smith supported the view that the ________ of a nation greatly influenced its economic growth.

Accepted Answer

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

Question 14

What is creative destruction? Define political creative destruction.

Accepted Answer

Creative destruction refers to the proce

Question 15

One morning,while working on an assignment,you realize that your computer is functioning very slowly because of a new virus.Hence,you decide to get your computer serviced.Using this scenario,distinguish between the proximate cause and fundamental cause of getting your computer serviced.

Accepted Answer

In the given scenario,the proximate caus

Question 16

The causes of prosperity that link high levels of prosperity to high levels of inputs used in production,without explaining why the levels of those inputs are high,are referred to as ________.

Accepted Answer

A)  implicit causes of prosperity 
B)  explicit causes of prosperity 
C)  proximate causes of prosperity 
D)  fundamental causes of prosperity 
A)  implicit causes of prosperity 
B)  explicit causes of prosperity 
C)  proximate causes of prosperity 
D)  fundamental causes of prosperity

Question 17

Which of the following is not true of institutions?

Accepted Answer

A)  Institutions affect incentives. 
B)  Institutions are permanent and cannot be changed over time. 
C)  Institutions act as constraints on the behavior of economic agents. 
D)  Institutions are determined by individuals as members of society. 
A)  Institutions affect incentives. 
B)  Institutions are permanent and cannot be changed over time. 
C)  Institutions act as constraints on the behavior of economic agents. 
D)  Institutions are determined by individuals as members of society.

Question 18

Which of the following statements is true?

Accepted Answer

A)  It is possible for an economy to change both its political and economic institutions. 
B)  Neither the political institutions nor the economic institutions of a nation can be changed. 
C)  It is possible for an economy to change its political institutions but not its economic institutions. 
D)  It is possible for an economy to change its economic institutions but not its political institutions. 
A)  It is possible for an economy to change both its political and economic institutions. 
B)  Neither the political institutions nor the economic institutions of a nation can be changed. 
C)  It is possible for an economy to change its political institutions but not its economic institutions. 
D)  It is possible for an economy to change its economic institutions but not its political institutions.

Question 19

Compared to an economy with extractive institutions,an economy with inclusive institutions will be characterized by ________.

Accepted Answer

A)  higher output and fewer entrepreneurs 
B)  lower output and more entrepreneurs 
C)  higher output and more entrepreneurs 
D)  lower output and fewer entrepreneurs 
A)  higher output and fewer entrepreneurs 
B)  lower output and more entrepreneurs 
C)  higher output and more entrepreneurs 
D)  lower output and fewer entrepreneurs

Question 20

Consider two economies: Economy A and Economy B.In Economy A,the work culture is such that people do not mind working 12 hours a day.On the contrary,in Economy B,people work a maximum of 6 hours a day.If the culture hypothesis holds,then ________.

Accepted Answer

A)  both economies are likely to grow at the same rate 
B)  Economy A is likely to grow faster than Economy B 
C)  Economy B is likely to grow faster than Economy A 
D)  the growth rates in both economies are likely to fluctuate randomly 
A)  both economies are likely to grow at the same rate 
B)  Economy A is likely to grow faster than Economy B 
C)  Economy B is likely to grow faster than Economy A 
D)  the growth rates in both economies are likely to fluctuate randomly

A hypothesis states that religious teachings,family ties,and/or social norms are the causes of economic prosperity.According to this hypothesis,________.

Which of the following is a valid shortcoming of the use of foreign aid to eradicate poverty?

Which of the following statements is true?

One of the methods of reducing the geographical disadvantage faced by poorer countries is to ________.

Institutional reversal refers to the fact that ________.

Countries in sub-Saharan Africa are economically disadvantaged because infectious diseases spread in these countries relatively easily.This statement reflects the ________.

Which of the following may partially reduce the geographical disadvantages faced by poorer countries?

Which of the following statements correctly identifies an advantage of using foreign aid to eradicate poverty?

Which of the following is a good proxy for the measure of economic prosperity when GDP per capita data are unavailable?

Foreign aid ________.

The relationship between urbanization and GDP per capita is likely to be represented by a(n)________.

Adam Smith supported the view that the ________ of a nation greatly influenced its economic growth.

What is creative destruction? Define political creative destruction.

One morning,while working on an assignment,you realize that your computer is functioning very slowly because of a new virus.Hence,you decide to get your computer serviced.Using this scenario,distinguish between the proximate cause and fundamental cause of getting your computer serviced.

The causes of prosperity that link high levels of prosperity to high levels of inputs used in production,without explaining why the levels of those inputs are high,are referred to as ________.

Which of the following is not true of institutions?

Which of the following statements is true?

Compared to an economy with extractive institutions,an economy with inclusive institutions will be characterized by ________.

Consider two economies: Economy A and Economy B.In Economy A,the work culture is such that people do not mind working 12 hours a day.On the contrary,in Economy B,people work a maximum of 6 hours a day.If the culture hypothesis holds,then ________.

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

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

A hypothesis states that religious teachings,family ties,and/or social norms are the causes of economic prosperity.According to this hypothesis,________.

Which of the following is a valid shortcoming of the use of foreign aid to eradicate poverty?

Which of the following statements is true?

One of the methods of reducing the geographical disadvantage faced by poorer countries is to ________.

Institutional reversal refers to the fact that ________.

Countries in sub-Saharan Africa are economically disadvantaged because infectious diseases spread in these countries relatively easily.This statement reflects the ________.

Which of the following may partially reduce the geographical disadvantages faced by poorer countries?

Which of the following statements correctly identifies an advantage of using foreign aid to eradicate poverty?

Which of the following is a good proxy for the measure of economic prosperity when GDP per capita data are unavailable?

Foreign aid ________.

The relationship between urbanization and GDP per capita is likely to be represented by a(n)________.

Adam Smith supported the view that the ________ of a nation greatly influenced its economic growth.

What is creative destruction? Define political creative destruction.

One morning,while working on an assignment,you realize that your computer is functioning very slowly because of a new virus.Hence,you decide to get your computer serviced.Using this scenario,distinguish between the proximate cause and fundamental cause of getting your computer serviced.

The causes of prosperity that link high levels of prosperity to high levels of inputs used in production,without explaining why the levels of those inputs are high,are referred to as ________.

Which of the following is not true of institutions?

Which of the following statements is true?

Compared to an economy with extractive institutions,an economy with inclusive institutions will be characterized by ________.

Consider two economies: Economy A and Economy B.In Economy A,the work culture is such that people do not mind working 12 hours a day.On the contrary,in Economy B,people work a maximum of 6 hours a day.If the culture hypothesis holds,then ________.

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