Question 1

By definition, the rate of growth of per capita real income equals the sum of the rate of growth of aggregate real income and the rate of population growth.

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following is not a constituent institution of the World Bank?

Accepted Answer

A)  World Trade Organization 
B)  International FINANCE CORPORTATION 
C)  International Bank for Reconstruction and Development 
D)  International Center for Settlement of Investment Disputes 
A)  World Trade Organization 
B)  International FINANCE CORPORTATION 
C)  International Bank for Reconstruction and Development 
D)  International Center for Settlement of Investment Disputes A

Question 3

The growth equation is a relationship indicating that the rate of growth in a country's aggregate real income is equal to the sum of three components: (1) the rate of growth of productivity of labor and capital; (2) the contribution to aggregate real income of labor resources multiplied by the rate of growth of labor resources; and (3) the contribution to aggregate real income of capital resources multiplied by the rate of growth of capital resources.

Accepted Answer

A) True 
 B)False  True

Question 4

The World Bank was established in 1971, following the collapse of the Bretton Woods system of fixed exchange rates.

Accepted Answer

A) True 
 B)False

Question 5

Dead capital resources are those that are untaxed by national governments.

Accepted Answer

A) True 
 B)False

Question 6

The bulk of international trade is carried out by the minority of the world-s population residing in developed nations.

Accepted Answer

A) True 
 B)False

Question 7

Product innovations broaden the range of markets for goods and services within a nation.

Accepted Answer

A) True 
 B)False

Question 8

A double taxation treaty:

Accepted Answer

A)  imposes both a standard domestic tax rate on a foreign investor-s return and a special tax rate to ensure investors pay taxes in their home nation. 
B)  imposes a tax rate on the returns earned by foreign investors that is twice as high as the tax rate on domestic investors- returns. 
C)  exempts from taxation a specified portion of the return on an investment, or offers tax credits to foreign investors. 
D)  exempts from taxation all returns of investors whose earnings also are not taxed in their home nation. 
A)  imposes both a standard domestic tax rate on a foreign investor-s return and a special tax rate to ensure investors pay taxes in their home nation. 
B)  imposes a tax rate on the returns earned by foreign investors that is twice as high as the tax rate on domestic investors- returns. 
C)  exempts from taxation a specified portion of the return on an investment, or offers tax credits to foreign investors. 
D)  exempts from taxation all returns of investors whose earnings also are not taxed in their home nation.

Question 9

A bilateral investment treaty between two nations ensures that no flows of investment will take place across their nations and thereby insulates them from destabilizing volatility of flows of foreign direct investment and portfolio investment.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a potential problem faced by developing nations that borrow from abroad?

Accepted Answer

A)  Interest payments on the debt obligations are transfers from domestic residents to foreign residents. 
B)  Funds obtained from foreign borrowing are often used to finance acquisitions of capital resources. 
C)  Foreign borrowers may place conditions on loans that effectively transfer some control over resource-allocation decisions away from domestic residents. 
D)  Foreign shorter-term investment and loans can be highly volatile. 
A)  Interest payments on the debt obligations are transfers from domestic residents to foreign residents. 
B)  Funds obtained from foreign borrowing are often used to finance acquisitions of capital resources. 
C)  Foreign borrowers may place conditions on loans that effectively transfer some control over resource-allocation decisions away from domestic residents. 
D)  Foreign shorter-term investment and loans can be highly volatile.

Question 11

According to the rule of 72, when a nation-s average annual rate of economic growth is 3 percent, it will take about _____ years for that nation-s ___________ to double in magnitude.

Accepted Answer

A)  24; per capita real income 
B)  216; per capita real income 
C)  24; population 
D)  216; population 
A)  24; per capita real income 
B)  216; per capita real income 
C)  24; population 
D)  216; population

Question 12

If a nation-s rate of growth of economic growth is 3 percent and its rate of population growth is 2 percent, then its rate of growth in aggregate real income is:

Accepted Answer

A)  1 percent. 
B)  1.5 percent. 
C)  5 percent. 
D)  6 percent. 
A)  1 percent. 
B)  1.5 percent. 
C)  5 percent. 
D)  6 percent.

Question 13

Which of the following is a private organization that periodically seeks to address financial problems of less developed nations?

Accepted Answer

A)  World Bank 
B)  London Club 
C)  Paris Club 
D)  International Bank for Reconstruction and Development 
A)  World Bank 
B)  London Club 
C)  Paris Club 
D)  International Bank for Reconstruction and Development

Question 14

The World Bank classifies low-income countries as those with per capita incomes less than a maximum threshold of about:

Accepted Answer

A)  18000 
B)  12000 
C)  4000 
D)  1000 
A)  18000 
B)  12000 
C)  4000 
D)  1000

Question 15

Of the following regions, which currently receives the largest share of World Bank assistance?

Accepted Answer

A)  Africa 
B)  South Asia 
C)  Europe and Central Asia 
D)  the Middle East and North Africa 
A)  Africa 
B)  South Asia 
C)  Europe and Central Asia 
D)  the Middle East and North Africa

Question 16

According to the rule of 72, the number of years required for a country's per capita real income to double is approximately equal to 72 divided by the average annual rate of economic growth.

Accepted Answer

A) True 
 B)False

Question 17

Entrepreneurs are individuals who seek to earn profits from organizing the production and distribution of goods and services.

Accepted Answer

A) True 
 B)False

Question 18

Based on World Bank estimates, about ___ billion people live on less than $____ per day.

Accepted Answer

A)  1; 5 
B)  2; 3 
C)  3; 2 
D)  4; 1 
A)  1; 5 
B)  2; 3 
C)  3; 2 
D)  4; 1

Question 19

Technological improvement is the production of a wider array of goods and services that more fully provide consumer satisfaction.

Accepted Answer

A) True 
 B)False

Question 20

A key implication of the growth equation is that when the contribution of the growth of labor resources to economic growth is taken into account, a higher population growth rate ultimately:

Accepted Answer

A)  must reduce economic growth. 
B)  must increase economic growth. 
C)  never has any effect on economic growth. 
D)  has an ambiguous effect on economic growth. 
A)  must reduce economic growth. 
B)  must increase economic growth. 
C)  never has any effect on economic growth. 
D)  has an ambiguous effect on economic growth.

By definition, the rate of growth of per capita real income equals the sum of the rate of growth of aggregate real income and the rate of population growth.

Which of the following is not a constituent institution of the World Bank?

The World Bank was established in 1971, following the collapse of the Bretton Woods system of fixed exchange rates.

Dead capital resources are those that are untaxed by national governments.

The bulk of international trade is carried out by the minority of the world-s population residing in developed nations.

Product innovations broaden the range of markets for goods and services within a nation.

A double taxation treaty:

A bilateral investment treaty between two nations ensures that no flows of investment will take place across their nations and thereby insulates them from destabilizing volatility of flows of foreign direct investment and portfolio investment.

Which of the following is not a potential problem faced by developing nations that borrow from abroad?

According to the rule of 72, when a nation-s average annual rate of economic growth is 3 percent, it will take about _ years for that nation-s _______ to double in magnitude.

If a nation-s rate of growth of economic growth is 3 percent and its rate of population growth is 2 percent, then its rate of growth in aggregate real income is:

Which of the following is a private organization that periodically seeks to address financial problems of less developed nations?

The World Bank classifies low-income countries as those with per capita incomes less than a maximum threshold of about:

Of the following regions, which currently receives the largest share of World Bank assistance?

According to the rule of 72, the number of years required for a country's per capita real income to double is approximately equal to 72 divided by the average annual rate of economic growth.

Entrepreneurs are individuals who seek to earn profits from organizing the production and distribution of goods and services.

Based on World Bank estimates, about _ billion people live on less than $__ per day.

Technological improvement is the production of a wider array of goods and services that more fully provide consumer satisfaction.

A key implication of the growth equation is that when the contribution of the growth of labor resources to economic growth is taken into account, a higher population growth rate ultimately:

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Regionalism and Multilateralism

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Industrial Structure and Trade in the Global Economy: Businesses Without Borders

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

Filters

Exam 11: Economic Development

By definition, the rate of growth of per capita real income equals the sum of the rate of growth of aggregate real income and the rate of population growth.

Which of the following is not a constituent institution of the World Bank?

The World Bank was established in 1971, following the collapse of the Bretton Woods system of fixed exchange rates.

Dead capital resources are those that are untaxed by national governments.

The bulk of international trade is carried out by the minority of the world-s population residing in developed nations.

Product innovations broaden the range of markets for goods and services within a nation.

A double taxation treaty:

A bilateral investment treaty between two nations ensures that no flows of investment will take place across their nations and thereby insulates them from destabilizing volatility of flows of foreign direct investment and portfolio investment.

Which of the following is not a potential problem faced by developing nations that borrow from abroad?

According to the rule of 72, when a nation-s average annual rate of economic growth is 3 percent, it will take about _____ years for that nation-s ___________ to double in magnitude.

If a nation-s rate of growth of economic growth is 3 percent and its rate of population growth is 2 percent, then its rate of growth in aggregate real income is:

Which of the following is a private organization that periodically seeks to address financial problems of less developed nations?

The World Bank classifies low-income countries as those with per capita incomes less than a maximum threshold of about:

Of the following regions, which currently receives the largest share of World Bank assistance?

According to the rule of 72, the number of years required for a country's per capita real income to double is approximately equal to 72 divided by the average annual rate of economic growth.

Entrepreneurs are individuals who seek to earn profits from organizing the production and distribution of goods and services.

Based on World Bank estimates, about ___ billion people live on less than $____ per day.

Technological improvement is the production of a wider array of goods and services that more fully provide consumer satisfaction.

A key implication of the growth equation is that when the contribution of the growth of labor resources to economic growth is taken into account, a higher population growth rate ultimately:

Understanding the Global Economy

Comparative Advantage: How Nations Can Gain From International Trade

Sources of Comparative Advantage

Regulating International Trade: Trade Policies and Their Effects

Regionalism and Multilateralism

Balance of Payments and Foreign Exchange Markets

Exchange Rate Systems: Past to Present

The Power of Arbitrage: Purchasing Power and Interest Rate Parities

Global Money and Banking: Where Central Banks Fit Into the World Economy

Contemporary Global Economic Issues and Policies

Industrial Structure and Trade in the Global Economy: Businesses Without Borders

The Public Sector in the Global Economy

Dealing With Financial Crises: Does the World Need a New International Financial Architecture

Filters

According to the rule of 72, when a nation-s average annual rate of economic growth is 3 percent, it will take about _ years for that nation-s _______ to double in magnitude.

Based on World Bank estimates, about _ billion people live on less than $__ per day.