Question 1

Using public policy to promote health can contribute to growth because:

Accepted Answer

A)  workers who are in good health will be more productive and less likely to miss work days.
B)  workers who get free health care are more likely to be careless.
C)  workers who are in good health take more vacation days and are less likely to work.
D)  it allows the importation of more goods and services.E) B) and C)
F) None of the above

Question 2

Industrial policies are:

Accepted Answer

A)  favorable tax policies to encourage private domestic investment in certain industries.
B)  favorable trade policies to encourage private investment in certain industries.
C)  government investments in certain industries to encourage growth in those industries.
D)  All of these are true.E) C) and D)
F) A) and B)

Question 3

If a country has a high level of income,it:

Accepted Answer

A)  must be rapidly increasing its income each year.
B)  has large amounts of physical and human capital.
C)  must be maintaining all natural resources.
D)  must be increasing all its natural resources.E) B) and C)
F) C) and D)

Question 4

The only way that the family can consume more and enjoy a higher standard of living is:

Accepted Answer

A)  to increase the amount each person produces.
B)  to decrease the amount each person produces.
C)  to increase how many people are in the family.
D)  to increase both how many people are in the family,and the amount each one produces.E) All of the above
F) A) and C)

Question 5

Education and training is a way to build:

Accepted Answer

A)  human capital.
B)  physical capital.
C)  technological capital.
D)  All of these could be true.E) None of the above
F) A) and B)

Question 6

Household savings rates:

Accepted Answer

A)  vary enormously across countries.
B)  can be negative.
C)  are generally higher in China than in the United States.
D)  All of these are true.E) A) and C)
F) A) and B)

Question 7

Which of the following is considered a nonrenewable resource?

Accepted Answer

A)  Natural gas
B)  Sunlight
C)  Rivers
D)  WindE) A) and C)
F) All of the above

Question 8

If a country's income level is high:

Accepted Answer

A)  it must have a high level of growth.
B)  it must have a high level of GDP per capita.
C)  it must be well-endowed with natural resources.
D)  All of these are true.E) B) and D)
F) A) and B)

Question 9

Creating economic growth:

Accepted Answer

A)  is well understood by macroeconomists.
B)  has two central tenets upon which the theory is based.
C)  involves savings,capital,labor,and technology.
D)  All of these are true.E) A) and D)
F) None of the above

Question 10

We can tell how much physical capital has been added to the economy by:

Accepted Answer

A)  taking into account both new investment and the retirement of older capital.
B)  adding up the value of all tools,equipment,and structures that have ever been built.
C)  counting the number of persons of working age.
D)  counting the number of persons of working age who are employed.E) B) and D)
F) None of the above

Question 11

An example of human capital would be:

Accepted Answer

A)  your computer.
B)  your writing skills.
C)  your desk.
D)  None of these is an example of human capital.E) A) and C)
F) A) and B)

Question 12

The purchasing power of the average person in the world today is:

Accepted Answer

A)  more than 30 times as high as it was 200 years ago.
B)  more than 20 times as high as it was 300 years ago.
C)  is about the same as it has been during the last two centuries.
D)  has increased steadily over the last two centuries.E) None of the above
F) A) and B)

Question 13

We can estimate that if a country grows at 7 percent per year,it will double its real GDP per capita in:

Accepted Answer

A)  2 years.
B)  20 years.
C)  35 years.
D)  10 years.E) B) and D)
F) B) and C)

Question 14

The poorer a country is:

Accepted Answer

A)  the more difficult it is to pay for things that will bring it out of poverty.
B)  the less they have to give up for the basic things that will bring them out of poverty.
C)  the easier it is to pay for things that will bring it out of poverty.
D)  the more they can invest in all the components of productivity at once.E) None of the above
F) A) and B)

Question 15

The convergence theory states that:

Accepted Answer

A)  poorer countries will grow faster than rich ones.
B)  rich countries will grow faster than poor ones.
C)  poor countries tend to converge together and stagnate.
D)  rich countries tend to leapfrog ahead maintaining the gap in global development.E) B) and D)
F) All of the above

Question 16

Which of the following would not be considered physical capital?

Accepted Answer

A)  An axe
B)  Fertile soil
C)  A factory
D)  A forkliftE) All of the above
F) A) and B)

Question 17

Protecting property rights:

Accepted Answer

A)  is essential to economic growth.
B)  encourages people to invest in capital.
C)  by governments will likely increase productivity.
D)  All of these are true.E) None of the above
F) All of the above

Question 18

The rule of 70 estimates how long it will take a country to:

Accepted Answer

A)  double its real GDP per capita.
B)  achieve zero inflation.
C)  reach its maximum production capacity.
D)  double its output.E) All of the above
F) C) and D)

Question 19

An example of physical capital is:

Accepted Answer

A)  a tractor.
B)  a plow.
C)  a shovel.
D)  All of these are examples of physical capital.E) A) and D)
F) A) and C)

Question 20

If a country devotes its resources to acquiring more physical capital:

Accepted Answer

A)  it will increase its productivity.
B)  it will decrease its current consumption.
C)  it will increase its output per person.
D)  All of these are true.E) A) and D)
F) All of the above

Exam 26: Economic Growth

If a country's income level is high:

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We can tell how much physical capital has been added to the economy by:

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The poorer a country is:

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We can estimate that if a country grows at 7 percent per year,it will double its real GDP per capita in:

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The rule of 70 estimates how long it will take a country to:

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Creating economic growth:

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The purchasing power of the average person in the world today is:

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The only way that the family can consume more and enjoy a higher standard of living is:

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Which of the following would not be considered physical capital?

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If a country has a high level of income,it:

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Using public policy to promote health can contribute to growth because:

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The convergence theory states that:

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Household savings rates:

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If a country devotes its resources to acquiring more physical capital:

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Which of the following is considered a nonrenewable resource?

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An example of human capital would be:

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Protecting property rights:

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An example of physical capital is:

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Education and training is a way to build:

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Industrial policies are:

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