Question 1

Which of the following is/are the benefit(s) of economic growth?

Accepted Answer

A)   increases in life expectancy
B)   reductions in infant mortality
C)   higher incomes
D)   an expansion in the range of goods and services available
E)   All of these answers are correct. E

Question 2

Per capita real GDP is given by the equation y = Y/PN, where Y is nominal GDP, P is GDP deflator, and N is population. In the United States, if the average growth rate of nominal GDP is 6.8 percent, inflation is 3.6 percent, and population growth is 1.1 percent, what is the growth of real GDP? Per capita nominal GDP? Per capita real GDP?

Accepted Answer

First we note $\bar { g } _ { y } = \bar { g } _ { Y } - \bar { g } _ { P } - \bar { g } _ { N }$
• Real GDP: $\bar { g } _ { N } = 0,6.8 \% - 3.6 \% = 3.2 \%$ 
• PCNGDP: $\bar { g } _ { P } = 0,6.8 \% - 1.1 \% = 5.7 \%$ 
• PCRGDP: $6.8 \% - 3.6 - 1.1 \% = 2.1 \%$

Question 3

Assume that Mexico's average annual per capita GDP growth rate is 3 percent per year, while Argentina's is 2.5 percent. Next, assume that both countries began with an initial per capita GDP of $1,000 in 1960. By 2010, per capita GDP would have been ________ in Mexico and ________ in Argentina.

Accepted Answer

A)   $228; $291
B)   $3,437; $4,384
C)   $4,515; $3,523
D)   $4,384; $3,437
E)   Not enough information is given. D

Question 4

According to the text, does economic growth occur in the same place at the same time? In which countries did economic growth begin? Which countries lag behind?

Accepted Answer

The answer of According to the text, does economic growth...

Question 5

According to historical data, the wages in ancient Greece and Rome were ________ in sixteenth-century Britain or eighteenth-century France.

Accepted Answer

A)   somewhat lower than
B)   a lot higher than
C)   a lot lower than
D)   about the same as
E)   None of these answers are correct.

Question 6

Between 1986 and 2010, China's per capita GDP grew an average of ________ percent.

Accepted Answer

A)   4.4
B)   8
C)   3.7
D)   7
E)   6

Question 7

In 1950, per capita real GDP in Argentina was $5,200 per year and it grew at a constant growth rate of 1.5 percent per year. In Mexico, 1950 per capita real GDP was $3,600, but it grew at a constant rate of 2 percent (both in 2005 prices).What would per capita real GDP be in each country in 61 years (2010)? What about in 91 years (2040)? Will per capita real GDP in Mexico ever surpass that in Argentina? If so, when, approximately? What inference do we make about growth rates from this example?

Accepted Answer

The answer of In 1950, per capita real GDP in...

Question 8

Between 1960 and 2010, Madagascar was one of the fastest-growing countries in the world.

Accepted Answer

A) True 
 B)False

Question 9

If France's per capita GDP is $5,000 in 1950 and Portugal's is $2,500, but Portugal is growing faster, the expectation that sometime in the future Portugal's per capita GDP will equal that of France is called economic:

Accepted Answer

A)   growth
B)   divergence
C)   convergence
D)   dynamics
E)   justice

Question 10

The president of the World Bank has asked you to calculate the average population growth rate of Hungary from 1970 to 2010. You know the population in 1970 was about 10.4 million and in 2010 about 9.5 million. The average growth rate is about:

Accepted Answer

A)   0.2 percent
B)   -0.2 percent
C)   98.4 percent
D)   2.7 percent
E)   -200 percent

Question 11

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ $\bar { g } _ {y }$
And $\bar { g } _ { A }$
)What is the growth rate of y if $y = A k ^ { \alpha } l ^ { 1 - \alpha } , \alpha > 0 ?$

Accepted Answer

A)    gˉy=gˉA+αgˉk−αgˉl\bar { g } _ { y } = \bar { g } _ { A } + \alpha \bar { g } _ { k } - \alpha \bar { g } _ { l }gˉ​y​=gˉ​A​+αgˉ​k​−αgˉ​l​ .
B)    gˉy=gˉA+α(gˉk−gˉl) \bar { g } _ { y } = \bar { g } _ { A } + \alpha \left( \bar { g } _ { k } - \bar { g } _ { l } \right) gˉ​y​=gˉ​A​+α(gˉ​k​−gˉ​l​)  
C)    gˉy=gˉA+αgˉk−αgˉl\bar { g } _ { y } = \bar { g } _ { A } + \alpha \bar { g } _ { k } - \alpha \bar { g } _ { l }gˉ​y​=gˉ​A​+αgˉ​k​−αgˉ​l​ 
D)    gˉy=gˉA+gˉkα+gˉL1−α\bar { g } _ { y } = \bar { g } _ { A } + \bar { g } _ { k } ^ { \alpha } + \bar { g } _ { L } ^ { 1 - \alpha }gˉ​y​=gˉ​A​+gˉ​kα​+gˉ​L1−α​ 
E)    gˉy=gˉA+αgˉX+(1−α) gˉZ\bar { g } _ { y } = \bar { g } _ { A } + \alpha \bar { g } _ { X } + ( 1 - \alpha )  \bar { g } _ { Z }gˉ​y​=gˉ​A​+αgˉ​X​+(1−α) gˉ​Z​

Question 12

The birthplace of modern economic growth was in ________ during the ________ century.

Accepted Answer

A)   Japan; mid-twentieth
B)   the United States; mid-nineteenth
C)   the United Kingdom; mid-eighteenth
D)   China; late twentieth
E)   Germany; early nineteenth

Question 13

Economic growth can be useful in describing why:

Accepted Answer

A)   Europeans are better off in 2007 than they were in 1907 and why Europeans are better off than Thais
B)   Europeans are better off in 2007 than they were in 1907 and why Europeans are worse off than Thais
C)   Europeans are better off in 2007 than they were in 1907
D)   Europeans are worse off than Thais
E)   Europeans are worse off in 2007 than they were in 1907 and why Europeans are better off than Thais

Question 14

The president of the World Bank has asked you to calculate the average per capita GDP growth rate of Rwanda from 1980 to 2010. In 1980, per capita GDP was about $728 and in 2010 about $1,025. You tell him the average growth rate of per capita GDP is about:

Accepted Answer

A)   1.1 percent
B)   -1.1 percent
C)   0.0 percent
D)   -2.3 percent
E)   20.2 percent

Question 15

The growth rate of any variable y between periods t and t + 1 is the percent change in that variable, given by $\left( y _ { t + 1 } - y _ { t } \right) / y _ { t }$  .

Accepted Answer

A) True 
 B)False

Question 16

Define $Y = A K ^ { 1 / 3 } L ^ { 2/3 }$  . If $\bar { g } _ { A } = 1 \%$  , $\bar { g } _ { X } = 6 \%$  , and if $\bar { g } _ { L } = 6 \%$  , then $\bar { g } _ { Y } = 7 \%$

Accepted Answer

A) True 
 B)False

Question 17

Assuming the current rate of economic growth continues, the average college student will have a lifetime income ________ that of his or her parents.

Accepted Answer

A)   five times
B)   ten times
C)   about the same as
D)   about twice
E)   half

Question 18

When a lower-income economy's GDP is able to "catch up" with a higher-income economy's GDP, this behavior is related to an important concept called economic convergence.

Accepted Answer

A) True 
 B)False

Question 19

The rule of 70 states that:

Accepted Answer

A)   if yt grows at a rate of g percent per year, then the number of years it takes yt to double is approximately equal to 70/g
B)   if yt grows at a rate of g percent per year, then the number of years it takes yt to double is exactly equal to 70/g
C)   if yt grows at a rate of g percent per year, then the number of years it takes yt to double is approximately equal to g/70
D)   if yt grows at a rate of g percent per year, then the number of years it takes yt to triple is approximately equal to 70/g
E)   if yt grows at a rate of g percent per year, then the number of years it takes yt to double is approximately equal to 70/(1 + g)

Question 20

Which of the following had a negative growth rate over the past 50 years?

Accepted Answer

A)   Tanzania
B)   Ethiopia
C)   Burundi
D)   Democratic Republic of Congo
E)   All of these answers are correct.

Exam 3: An Overview of Long-Run Economic Growth

Which of the following is/are the benefit(s) of economic growth?

Assume that Mexico's average annual per capita GDP growth rate is 3 percent per year, while Argentina's is 2.5 percent. Next, assume that both countries began with an initial per capita GDP of $1,000 in 1960. By 2010, per capita GDP would have been in Mexico and in Argentina.

According to the text, does economic growth occur in the same place at the same time? In which countries did economic growth begin? Which countries lag behind?

According to historical data, the wages in ancient Greece and Rome were ________ in sixteenth-century Britain or eighteenth-century France.

Between 1986 and 2010, China's per capita GDP grew an average of ________ percent.

Between 1960 and 2010, Madagascar was one of the fastest-growing countries in the world.

If France's per capita GDP is $5,000 in 1950 and Portugal's is $2,500, but Portugal is growing faster, the expectation that sometime in the future Portugal's per capita GDP will equal that of France is called economic:

The president of the World Bank has asked you to calculate the average population growth rate of Hungary from 1970 to 2010. You know the population in 1970 was about 10.4 million and in 2010 about 9.5 million. The average growth rate is about:

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ $\bar { g } _ {y }$ And $\bar { g } _ { A }$ ) What is the growth rate of y if $y = A k ^ { \alpha } l ^ { 1 - \alpha } , \alpha > 0 ?$

The birthplace of modern economic growth was in during the century.

Economic growth can be useful in describing why:

The president of the World Bank has asked you to calculate the average per capita GDP growth rate of Rwanda from 1980 to 2010. In 1980, per capita GDP was about $728 and in 2010 about $1,025. You tell him the average growth rate of per capita GDP is about:

The growth rate of any variable y between periods t and t + 1 is the percent change in that variable, given by $\left( y _ { t + 1 } - y _ { t } \right) / y _ { t }$ .

Define $Y = A K ^ { 1 / 3 } L ^ { 2/3 }$ . If $\bar { g } _ { A } = 1 \%$ , $\bar { g } _ { X } = 6 \%$ , and if $\bar { g } _ { L } = 6 \%$ , then $\bar { g } _ { Y } = 7 \%$

Assuming the current rate of economic growth continues, the average college student will have a lifetime income ________ that of his or her parents.

When a lower-income economy's GDP is able to "catch up" with a higher-income economy's GDP, this behavior is related to an important concept called economic convergence.

The rule of 70 states that:

Which of the following had a negative growth rate over the past 50 years?

Exam 3: An Overview of Long-Run Economic Growth

Which of the following is/are the benefit(s) of economic growth?

Assume that Mexico's average annual per capita GDP growth rate is 3 percent per year, while Argentina's is 2.5 percent. Next, assume that both countries began with an initial per capita GDP of $1,000 in 1960. By 2010, per capita GDP would have been ________ in Mexico and ________ in Argentina.

According to the text, does economic growth occur in the same place at the same time? In which countries did economic growth begin? Which countries lag behind?

According to historical data, the wages in ancient Greece and Rome were ________ in sixteenth-century Britain or eighteenth-century France.

Between 1986 and 2010, China's per capita GDP grew an average of ________ percent.

Between 1960 and 2010, Madagascar was one of the fastest-growing countries in the world.

If France's per capita GDP is $5,000 in 1950 and Portugal's is $2,500, but Portugal is growing faster, the expectation that sometime in the future Portugal's per capita GDP will equal that of France is called economic:

The president of the World Bank has asked you to calculate the average population growth rate of Hungary from 1970 to 2010. You know the population in 1970 was about 10.4 million and in 2010 about 9.5 million. The average growth rate is about:

Suppose k, l, and A grow at constant rates given by gˉk\bar { g } _ { k }gˉ​k​ gˉy\bar { g } _ {y }gˉ​y​ And gˉA\bar { g } _ { A }gˉ​A​ ) What is the growth rate of y if y=Akαl1−α,α>0?y = A k ^ { \alpha } l ^ { 1 - \alpha } , \alpha > 0 ?y=Akαl1−α,α>0?

The birthplace of modern economic growth was in ________ during the ________ century.

Economic growth can be useful in describing why:

The president of the World Bank has asked you to calculate the average per capita GDP growth rate of Rwanda from 1980 to 2010. In 1980, per capita GDP was about $728 and in 2010 about $1,025. You tell him the average growth rate of per capita GDP is about:

The growth rate of any variable y between periods t and t + 1 is the percent change in that variable, given by (yt+1−yt)/yt\left( y _ { t + 1 } - y _ { t } \right) / y _ { t }(yt+1​−yt​)/yt​ .

Define Y=AK1/3L2/3Y = A K ^ { 1 / 3 } L ^ { 2/3 }Y=AK1/3L2/3 . If gˉA=1%\bar { g } _ { A } = 1 \%gˉ​A​=1% , gˉX=6%\bar { g } _ { X } = 6 \%gˉ​X​=6% , and if gˉL=6%\bar { g } _ { L } = 6 \%gˉ​L​=6% , then gˉY=7%\bar { g } _ { Y } = 7 \%gˉ​Y​=7%

Assuming the current rate of economic growth continues, the average college student will have a lifetime income ________ that of his or her parents.

When a lower-income economy's GDP is able to "catch up" with a higher-income economy's GDP, this behavior is related to an important concept called economic convergence.

The rule of 70 states that:

Which of the following had a negative growth rate over the past 50 years?

Assume that Mexico's average annual per capita GDP growth rate is 3 percent per year, while Argentina's is 2.5 percent. Next, assume that both countries began with an initial per capita GDP of $1,000 in 1960. By 2010, per capita GDP would have been in Mexico and in Argentina.

Suppose k, l, and A grow at constant rates given by $\bar { g } _ { k }$ $\bar { g } _ {y }$ And $\bar { g } _ { A }$ ) What is the growth rate of y if $y = A k ^ { \alpha } l ^ { 1 - \alpha } , \alpha > 0 ?$

The birthplace of modern economic growth was in during the century.

The growth rate of any variable y between periods t and t + 1 is the percent change in that variable, given by $\left( y _ { t + 1 } - y _ { t } \right) / y _ { t }$ .

Define $Y = A K ^ { 1 / 3 } L ^ { 2/3 }$ . If $\bar { g } _ { A } = 1 \%$ , $\bar { g } _ { X } = 6 \%$ , and if $\bar { g } _ { L } = 6 \%$ , then $\bar { g } _ { Y } = 7 \%$