Question 1

Domestic savings:

Accepted Answer

A)   is equal to domestic income minus consumption spending.
B)   comes from private households spending less than they earn.
C)   occurs when government revenues exceed noncapital expenditures.
D)   All of these are true.E) C) and D)
F) A) and C)

Question 2

Which of the following would not be considered physical capital?

Accepted Answer

A)   An optical lens
B)   A trained physicist
C)   A spotlight
D)   A clipboardE) C) and D)
F) A) and B) B

Question 3

An example of a nonrenewable resource would be:

Accepted Answer

A)   a computer.
B)   wireless technology.
C)   sunlight.
D)   None of these is considered a nonrenewable resource.E) B) and D)
F) A) and B)

Question 4

We calculate the amount of physical capital in an economy by adding up the value of all:

Accepted Answer

A)   tools, equipment, and structures.
B)   skills and expertise of all employed people.
C)   skills and expertise of the working age population.
D)   technological capabilities used in production.E) All of the above
F) A) and B)

Question 5

The productivity of workers can depend upon which of the following?

Accepted Answer

A)   Physical capital
B)   population growth
C)   Number of businesses established
D)   All of these are determinants of productivity.E) A) and D)
F) A) and C)

Question 6

Increases in productivity per person lead to increases in per capita income, which we call:

Accepted Answer

A)   economic growth.
B)   GDP per capita.
C)   the GDP deflator.
D)   the producer productivity index.E) A) and D)
F) B) and D)

Question 7

Which of the following is not considered a renewable resource?

Accepted Answer

A)   Fish in the ocean
B)   Sunlight
C)   Wind
D)   All of these are renewable resources.E) None of the above
F) A) and B) D

Question 8

An example of a renewable resource would be:

Accepted Answer

A)   trees.
B)   oxygen.
C)   fish in the ocean.
D)   All of these are examples of renewable resources.E) None of the above
F) All of the above

Question 9

According to the rule of 70, a country will double its real GDP per capita in 10 years if it:

Accepted Answer

A)   experiences a 7 percent growth rate in per-capita GDP.
B)   has inflation of 7 percent.
C)   has a population growth rate of 7 percent.
D)   None of these is true.E) A) and C)
F) B) and D)

Question 10

The growth rate of real GDP per capita is best captured by subtracting the percentage changes in:

Accepted Answer

A)   both prices and population from the nominal GDP growth rate.
B)   population from the nominal GDP growth rate, while dividing it by the inflation rate in order to hold prices constant.
C)   prices from the nominal GDP growth rate and not the population growth.
D)   population from the nominal GDP growth rate and not the percentage changes in prices.E) A) and D)
F) B) and D)

Question 11

If a country's income is rapidly increasing it must:

Accepted Answer

A)   have a high level of growth.
B)   have a high level of income.
C)   have a lot of room to expand.
D)   be well-endowed with natural resources.E) B) and C)
F) None of the above

Question 12

Many governments actively work to:

Accepted Answer

A)   attract foreign direct investment, hoping it will build up their capital stock when domestic savings aren't sufficient.
B)   attract foreign direct investment, so that when foreign companies invest in local firms, they can transfer human capital to local managers.
C)   discourage foreign direct investment, in an effort to encourage locals to invest in their own economy.
D)   discourage foreign direct investment, in an effort to avoid "crowding out."E) None of the above
F) B) and C)

Question 13

A country's income is:

Accepted Answer

A)   dependent upon how productive its workers are.
B)   difficult to measure given current macroeconomic data.
C)   likely to increase if the country experiences high rates of inflation.
D)   None of these is true.E) B) and C)
F) A) and D)

Question 14

Computing capacity has approximately:

Accepted Answer

A)   doubled every two years since the invention of computers.
B)   tripled every two years since the invention of computers.
C)   doubled every five years since the invention of computers.
D)   tripled every three years since the invention of computers.E) A) and D)
F) A) and C)

Question 15

One explanation for the growth in the U.S. economy over the last 100 years is:

Accepted Answer

A)   a large increase in human capital.
B)   a rapid decline in human capital.
C)   a small, incremental increase in human capital.
D)   Human capital was not the cause of growth in the United States over the last 100 years.E) B) and D)
F) C) and D)

Question 16

Trees are considered:

Accepted Answer

A)   a renewable resource.
B)   a nonrenewable resource.
C)   physical capital.
D)   technology.E) C) and D)
F) B) and C)

Question 17

Effective, stable leadership is essential to:

Accepted Answer

A)   economic growth.
B)   discourage foreign direct investment from taking hold in a country.
C)   increasing human capital.
D)   increasing population size.E) A) and B)
F) A) and C) A

Question 18

A nonrenewable resource:

Accepted Answer

A)   is a production input that comes from the earth.
B)   can be replenished naturally over time.
C)   is used to regenerate an old piece of capital.
D)   All of these statements are true.E) C) and D)
F) All of the above

Question 19

According to the rule of 70, if a country grows at an average rate of 2 percent per year, what would happen after 35 years?

Accepted Answer

A)   The country's real GDP per capita would double.
B)   The country's nominal GDP would double.
C)   The country's real GDP would double.
D)   The country's nominal GDP per capita would double.E) B) and C)
F) A) and D)

Question 20

Natural resources:

Accepted Answer

A)   are production inputs that come from the earth.
B)   are natural talents people are born with that make them productive.
C)   are physical structures that sit on the earth, improving it and making it more productive.
D)   None of these is true.E) C) and D)
F) B) and D)

Exam 10: Economic Growth

Domestic savings:

Correct AnswerverifiedShow Answer

Which of the following would not be considered physical capital?

Correct AnswerverifiedB

An example of a nonrenewable resource would be:

Correct AnswerverifiedShow Answer

We calculate the amount of physical capital in an economy by adding up the value of all:

Correct AnswerverifiedShow Answer

The productivity of workers can depend upon which of the following?

Correct AnswerverifiedShow Answer

Increases in productivity per person lead to increases in per capita income, which we call:

Correct AnswerverifiedShow Answer

Which of the following is not considered a renewable resource?

Correct AnswerverifiedD

An example of a renewable resource would be:

Correct AnswerverifiedShow Answer

According to the rule of 70, a country will double its real GDP per capita in 10 years if it:

Correct AnswerverifiedShow Answer

The growth rate of real GDP per capita is best captured by subtracting the percentage changes in:

Correct AnswerverifiedShow Answer

If a country's income is rapidly increasing it must:

Correct AnswerverifiedShow Answer

Many governments actively work to:

Correct AnswerverifiedShow Answer

A country's income is:

Correct AnswerverifiedShow Answer

Computing capacity has approximately:

Correct AnswerverifiedShow Answer

One explanation for the growth in the U.S. economy over the last 100 years is:

Correct AnswerverifiedShow Answer

Trees are considered:

Correct AnswerverifiedShow Answer

Effective, stable leadership is essential to:

Correct AnswerverifiedA

A nonrenewable resource:

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According to the rule of 70, if a country grows at an average rate of 2 percent per year, what would happen after 35 years?

Correct AnswerverifiedShow Answer

Natural resources:

Correct AnswerverifiedShow Answer

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B

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D

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A

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