Question 1

All of the following will cause the reported growth rate in a country to change EXCEPT

Accepted Answer

A)  population changes.
B)  changes in the number of poor people in the country.
C)  a shift of the production possibilities curve.
D)  changes in productivity.

Question 2

Limiting protectionism means

Accepted Answer

A)  reducing trade barriers.
B)  reducing corruption.
C)  reducing consumer fraud.
D)  reducing political dishonesty.

Question 3

Whenever average output produced per worker during a specific time-period increases,then

Accepted Answer

A)  leisure time increases.
B)  nominal GDP decreases.
C)  labor productivity increases.
D)  the standard of living goes down.

Question 4

The development of a strain of wheat that will yield two crops per year rather than one crop per year is an example of economic growth resulting from

Accepted Answer

A)  capital accumulation.
B)  increased gross investment.
C)  technological progress.
D)  an increase in per capita real income.

Question 5

A change in the growth rate of a country of one percentage point annually has

Accepted Answer

A)  very little impact on the economy of a country.
B)  a large impact in the future due to compounding.
C)  a small impact in the current year,and smaller impact in the future because of compounding.
D)  a large impact on the economy in the current year,but not in the future.

Question 6

Which of the following is NOT a benefit of economic growth?

Accepted Answer

A)  urban congestion
B)  reduction in illiteracy
C)  improved health
D)  longer lives

Question 7

The term "creative destruction" refers to

Accepted Answer

A)  the process by which immigrants build a new life in their country of destination.
B)  the process by which new jobs are created and old ones destroyed.
C)  the effects of population growth on the environment.
D)  All of the above are correct.

Question 8

Innovation is

Accepted Answer

A)  another term for something new.
B)  the transformation of an invention into something that is useful to humans.
C)  the term for invention when a firm obtains a patent.
D)  the term for inventions in the electronic and computer industries.

Question 9

Traditionally,economists regarded improvements in technology as

Accepted Answer

A)  the most important factor that helped explain economic growth,and basically the only factor that would cause economic growth.
B)  an outside factor that helped explain economic growth.
C)  an important factor in explaining economic growth that was due to economic forces that also could easily be explained.
D)  unrelated to economic growth in any systematic way.

Question 10

Of the following views on the effects of immigration on the receiving nation's economic growth,which have NOT been suggested by economists Michael Kremer and Julian Simon?

Accepted Answer

A)  Technological progress is driven by population growth.
B)  Immigrants raise the standard of living of a nation's native population.
C)  Immigration increases a nation's labor pool and encourages ingenuity.
D)  Immigration costs the local population jobs and greatly lowers their incomes.

Question 11

Innovation typically increases when

Accepted Answer

A)  market incentives and private property rights are encouraged.
B)  government controls the resource base.
C)  high taxes are present.
D)  the legal system is weak.

Question 12

Which of the following is a negative effect of economic growth?

Accepted Answer

A)  higher inflation
B)  higher unemployment
C)  environmental pollution
D)  all of the above

Question 13

An important foundation of the new growth theory is that

Accepted Answer

A)  we will get more technological advances the more the government is involved.
B)  we will get more technological advances when the rewards for producing them are greater.
C)  the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth.
D)  improvements in labor productivity are poor measures of technological growth.

Question 14

Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

Accepted Answer

A)  plentiful natural resources
B)  openness to international trade.
C)  an educated population
D)  All of the above are correct.

Question 15

Economic growth depends on

Accepted Answer

A)  low tax rates.
B)  high government spending.
C)  high rates of consumption.
D)  increases in the capital stock as a result of saving.

Question 16

The development of new products through research and development in new growth theory is important because

Accepted Answer

A)  there can be a positive impact on future growth.
B)  society's scarce resources are being used when they could be used for current consumption.
C)  it will lead to a reduction in the savings rate.
D)  new patents are created.

Question 17

A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

Accepted Answer

A)  an innovation.
B)  a copyright.
C)  a patent.
D)  a trademark.

Question 18

The reason that differences in economic growth rates are important in the long run is that

Accepted Answer

A)  growth compounds over time.
B)  population naturally shrinks in most countries.
C)  real GDP usually drops when adjusted for inflation.
D)  nominal GDP typically increases faster than real GDP.

Question 19

A higher rate of saving should lead to

Accepted Answer

A)  higher current consumption.
B)  less growth.
C)  more investment,higher capital growth,and more future consumption.
D)  a higher price level and reduced future consumption.

Question 20

The concept of an open economy means that

Accepted Answer

A)  imports should be limited while exports should be expanded.
B)  a nation's borders are open to flows of imports and exports.
C)  exports should be controlled but imports should be allowed in without restriction.
D)  imports and exports should be restricted.

Exam 9: Global Economic Growth and Development

A higher rate of saving should lead to

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A change in the growth rate of a country of one percentage point annually has

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Which of the following factors are considered by economists who study economic development to be directly related to the rate of economic growth?

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Innovation is

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All of the following will cause the reported growth rate in a country to change EXCEPT

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Innovation typically increases when

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Limiting protectionism means

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Traditionally,economists regarded improvements in technology as

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The development of new products through research and development in new growth theory is important because

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The term "creative destruction" refers to

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The concept of an open economy means that

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Of the following views on the effects of immigration on the receiving nation's economic growth,which have NOT been suggested by economists Michael Kremer and Julian Simon?

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The reason that differences in economic growth rates are important in the long run is that

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A government protection for an inventor that provides the inventor with the right to make use of her invention in any way she desires is

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Which of the following is a negative effect of economic growth?

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Economic growth depends on

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Whenever average output produced per worker during a specific time-period increases,then

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An important foundation of the new growth theory is that

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The development of a strain of wheat that will yield two crops per year rather than one crop per year is an example of economic growth resulting from

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Which of the following is NOT a benefit of economic growth?

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