Question 1

When the markets of an economy are more competitive,economic growth

Accepted Answer

A) is harmed by the resulting low rates of profit for industry. 
B) is enhanced because producers have a stronger incentive to provide goods efficiently. 
C) will be slower because prices do not rise as rapidly. 
D) is unaffected. 
A) is harmed by the resulting low rates of profit for industry. 
B) is enhanced because producers have a stronger incentive to provide goods efficiently. 
C) will be slower because prices do not rise as rapidly. 
D) is unaffected.

Question 2

The most important factor for producing long-run economic growth is

Accepted Answer

A) abundant natural resources. 
B) foreign aid. 
C) good policies and institutions. 
D) slow population growth. 
A) abundant natural resources. 
B) foreign aid. 
C) good policies and institutions. 
D) slow population growth.

Question 3

Monetary and price instability will

Accepted Answer

A) make it easier for both individuals and businesses to plan wisely for the future. 
B) generate uncertainty,and encourage investors and businesses to move their activities to countries with a more stable monetary environment. 
C) encourage businesses to invest and expand their future output. 
D) encourage domestic citizens to increase their rate of saving. 
A) make it easier for both individuals and businesses to plan wisely for the future. 
B) generate uncertainty,and encourage investors and businesses to move their activities to countries with a more stable monetary environment. 
C) encourage businesses to invest and expand their future output. 
D) encourage domestic citizens to increase their rate of saving.

Question 4

Which of the following is a true statement with regard to competitive markets?

Accepted Answer

A) Self-interested individuals do not promote the general welfare in competitive markets,only in regulated markets. 
B) Competition promotes prosperity best when price controls are implemented. 
C) Policies that make it easy to enter and exit business promote competition and economic progress. 
D) All of the above are correct. 
A) Self-interested individuals do not promote the general welfare in competitive markets,only in regulated markets. 
B) Competition promotes prosperity best when price controls are implemented. 
C) Policies that make it easy to enter and exit business promote competition and economic progress. 
D) All of the above are correct.

Question 5

Which of the following goods are available at highly economical prices because the use of mass production techniques substantially reduces their per unit production costs?

Accepted Answer

A) automobiles 
B) DVD players 
C) microwave ovens 
D) all of the above 
A) automobiles 
B) DVD players 
C) microwave ovens 
D) all of the above

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

(I)Policies such as price controls,licensing restrictions,and high taxes that reduce the volume of exchange will retard economic progress.
(II)Political instability,regulation,and high rates of taxation have undermined private ownership rights in many countries,reducing economic prosperity.

Accepted Answer

A) Both I and II are true. 
B) Both I and II are false. 
C) I is true;II is false. 
D) I is false;II is true. 
A) Both I and II are true. 
B) Both I and II are false. 
C) I is true;II is false. 
D) I is false;II is true.

Question 8

When the money supply is expanding and prices rise rapidly,economic growth

Accepted Answer

A) is slowed by the resulting unpredictability of the future level of prices. 
B) is enhanced as economic activity grows more rapidly. 
C) is enhanced because profits are higher so that capital investment is greater. 
D) is enhanced because existing debt is reduced in value,so people are willing to buy more goods. 
A) is slowed by the resulting unpredictability of the future level of prices. 
B) is enhanced as economic activity grows more rapidly. 
C) is enhanced because profits are higher so that capital investment is greater. 
D) is enhanced because existing debt is reduced in value,so people are willing to buy more goods.

Question 9

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 10

Which of the following is important if a country is going to achieve and sustain high rates of economic growth?

Accepted Answer

A) investment in physical and human capital 
B) improvements in technology 
C) institutional and policy arrangements consistent with economic efficiency 
D) All of the above. 
A) investment in physical and human capital 
B) improvements in technology 
C) institutional and policy arrangements consistent with economic efficiency 
D) All of the above.

Question 11

The growth records of Japan and Hong Kong during the last fifty years indicate that an economy can grow rapidly without

Accepted Answer

A) securely defined property rights. 
B) abundant domestic natural resources. 
C) significant capital formation. 
D) adopting modern technology. 
A) securely defined property rights. 
B) abundant domestic natural resources. 
C) significant capital formation. 
D) adopting modern technology.

Question 12

Stable money and prices are a key source of economic growth because

Accepted Answer

A) they allow activist policymakers to fine tune the economy. 
B) uncertainty and instability in prices will attract investors and business decision makers. 
C) price instability increases capital formation. 
D) price stability reduces the risks that accompany investment and other long-term commitments. 
A) they allow activist policymakers to fine tune the economy. 
B) uncertainty and instability in prices will attract investors and business decision makers. 
C) price instability increases capital formation. 
D) price stability reduces the risks that accompany investment and other long-term commitments.

Question 13

(I)With trade,individuals will be able to use more of their time and resources producing items they can supply economically and less time and resources producing goods that they can supply only at a high cost.
(II)Reductions in trade barriers will expand the productive potential of the economy.

Accepted Answer

A) I is true,II is false. 
B) I is false,II is true. 
C) Both I and II are true. 
D) Both I and II are false. 
A) I is true,II is false. 
B) I is false,II is true. 
C) Both I and II are true. 
D) Both I and II are false.

Question 14

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

Accepted Answer

A) the development of strong labor unions 
B) a sharp increase in the legal minimum wage 
C) an increase in expenditures on education and capital investment 
D) rapid growth rate of the money supply 
A) the development of strong labor unions 
B) a sharp increase in the legal minimum wage 
C) an increase in expenditures on education and capital investment 
D) rapid growth rate of the money supply

Question 15

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 16

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

Accepted Answer

A) rapid growth of the money supply to increase inflation and prices 
B) restrictions limiting the import of goods from other nations 
C) high tax rates to support a large government sector 
D) a high rate of sustained economic growth 
A) rapid growth of the money supply to increase inflation and prices 
B) restrictions limiting the import of goods from other nations 
C) high tax rates to support a large government sector 
D) a high rate of sustained economic growth

Question 17

Which of the following policies would be most likely to reduce the efficiency of a country's economic organization?

Accepted Answer

A) a legal structure that establishes secure property rights 
B) imposition of tariffs and other barriers limiting international trade 
C) competitive markets 
D) a stable monetary system 
A) a legal structure that establishes secure property rights 
B) imposition of tariffs and other barriers limiting international trade 
C) competitive markets 
D) a stable monetary system

Question 18

What are the primary sources of economic growth? Why are our real incomes and living standards today so much higher than those of our great grandparents 50 or 100 years ago? Why is the income per person so much higher in some countries than others?

Accepted Answer

The major sources of economic growth are

Question 19

If the per capita income of a country is growing at 2 percent per year,approximately how long will it take for that income to double?

Accepted Answer

A) twenty years 
B) twenty-five years 
C) thirty-five years 
D) seventy years 
A) twenty years 
B) twenty-five years 
C) thirty-five years 
D) seventy years

Question 20

Which of the following is true?

Accepted Answer

A) Poor countries are unable to ignite the growth process unless they receive financial aid from richer countries. 
B) Countries that fail to adopt institutions and policies supportive of trade,entrepreneurial discovery,and private investment will remain poor in the foreseeable future. 
C) Countries that lack an abundance of natural resources have been unable to grow and achieve high income levels. 
D) Countries with a large population relative to their land area are destined to remain poor. 
A) Poor countries are unable to ignite the growth process unless they receive financial aid from richer countries. 
B) Countries that fail to adopt institutions and policies supportive of trade,entrepreneurial discovery,and private investment will remain poor in the foreseeable future. 
C) Countries that lack an abundance of natural resources have been unable to grow and achieve high income levels. 
D) Countries with a large population relative to their land area are destined to remain poor.

Exam 16: Creating an Environment for Growth and Prosperity

When the markets of an economy are more competitive,economic growth

The most important factor for producing long-run economic growth is

Monetary and price instability will

Which of the following is a true statement with regard to competitive markets?

Which of the following goods are available at highly economical prices because the use of mass production techniques substantially reduces their per unit production costs?

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

(I)Policies such as price controls,licensing restrictions,and high taxes that reduce the volume of exchange will retard economic progress. (II)Political instability,regulation,and high rates of taxation have undermined private ownership rights in many countries,reducing economic prosperity.

When the money supply is expanding and prices rise rapidly,economic growth

Which of the following is true?

Which of the following is important if a country is going to achieve and sustain high rates of economic growth?

The growth records of Japan and Hong Kong during the last fifty years indicate that an economy can grow rapidly without

Stable money and prices are a key source of economic growth because

(I)With trade,individuals will be able to use more of their time and resources producing items they can supply economically and less time and resources producing goods that they can supply only at a high cost. (II)Reductions in trade barriers will expand the productive potential of the economy.

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

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

Which of the following policies would be most likely to reduce the efficiency of a country's economic organization?

What are the primary sources of economic growth? Why are our real incomes and living standards today so much higher than those of our great grandparents 50 or 100 years ago? Why is the income per person so much higher in some countries than others?

If the per capita income of a country is growing at 2 percent per year,approximately how long will it take for that income to double?

Which of the following is true?

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney 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

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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