Question 1

Household savings rates:

Accepted Answer

A)   were negative in China in 2014.
B)   were 49% in China in 2014.
C)   were fairly constant at about 8% in China from 2000 to 2010.
D)   have been roughly 10% for the last 30 years or so in China.E) A) and C)
F) B) and D)

Question 2

Accounting that relates how growth in inputs of production are related to growth in output is called:

Accepted Answer

A)   input to output accounting.
B)   national income accounting.
C)   production accounting.
D)   growth accounting.E) A) and B)
F) B) and C)

Question 3

Using public policy to promote health can:

Accepted Answer

A)   contribute to growth.
B)   take away resources from those that promote growth.
C)   hurt a country's chance of reaching high growth.
D)   discourage citizens from taking care of themselves.E) C) and D)
F) A) and C)

Question 4

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

Accepted Answer

A)   taking into account both new investment and depreciation of 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) A) and D)

Question 5

Countries with low levels of GDP per capita usually also have:

Accepted Answer

A)   low levels of schooling.
B)   high levels of schooling.
C)   mandatory military service.
D)   highly developed infrastructures.E) A) and D)
F) B) and D)

Question 6

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 C)
F) A) and D)

Question 7

Often, improvements in technology can:

Accepted Answer

A)   lead to more improvements in technology.
B)   lead to sustainable rates of growth in income for a country.
C)   continuously increase the productivity of workers.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 8

If a country grows at an average rate of 3.5 percent per year, we can estimate it will double its:

Accepted Answer

A)   growth rate in 70 years.
B)   real GDP per capita in 70 years.
C)   real GDP per capita in 20 years.
D)   growth rate in 20 years.E) C) and D)
F) B) and D)

Question 9

Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if Î±=0.75 then growth of output can be estimated to be:

Accepted Answer

A)   4.25%.
B)   4.00%.
C)   6.00%.
D)   4.75%.E) B) and C)
F) None of the above

Question 10

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) B) and C)
F) A) and D)

Question 11

Estimations calculated using the rule of 70:

Accepted Answer

A)   make it easier to appreciate how small differences in growth rates can add up to huge differences in income over time.
B)   make it easier to appreciate how big differences in growth rates are needed to create any real difference in income over time.
C)   are simple to use, but make it difficult to see the relationship between growth rate and income over time.
D)   are simple to use, but give estimates that have been proven wrong in recent decades.E) A) and C)
F) A) and B)

Question 12

Oil is considered:

Accepted Answer

A)   a renewable resource.
B)   a nonrenewable resource.
C)   physical capital.
D)   technology.E) A) and C)
F) None of the above

Question 13

Where does the money for investment in physical capital come from? It largely comes from:

Accepted Answer

A)   the savings of ordinary households.
B)   government subsidies.
C)   the reinvestment of funds from businesses.
D)   donation by foreign countries.E) A) and B)
F) All of the above

Question 14

The convergence theory predicts that:

Accepted Answer

A)   even if countries differ in their rates of savings, population growth, and other features, they will still converge to the same growth rate, although not the same level of income.
B)   countries that start out poor should initially grow faster than ones that start out rich, but will eventually slow to the same growth rate.
C)   poor countries are not generally expected to sustain a high growth rate and surpass the existing rich countries.
D)   All of these are predicted by the convergence theory.E) B) and C)
F) A) and D)

Question 15

The enforcement of contracts by the government:

Accepted Answer

A)   encourages economic growth.
B)   allows people to enter into long-term investments more easily.
C)   can increase physical capital investment.
D)   All of these are true.E) C) and D)
F) All of the above

Question 16

The trade-off between physical capital and current consumption:

Accepted Answer

A)   is harder for poorer countries than rich ones.
B)   is easier for poorer countries than rich ones.
C)   involves giving up less current consumption for poor countries, since they have little.
D)   involves giving up more current consumption for rich countries, since they have so much.E) B) and C)
F) C) and D)

Question 17

Using the growth accounting equation, if the growth rate of out is 5%, the growth of labor is 3% and the growth of capital is 2% then if Î±=0.75 then growth of technology can be estimated to be:

Accepted Answer

A)   4.25%.
B)   4.00%.
C)   3.00%.
D)   2.75%.E) A) and D)
F) A) and C)

Question 18

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) C) and D)
F) A) and B)

Question 19

Which of the following is generally not a result of increases in productivity per person?

Accepted Answer

A)   increases in per capita income.
B)   economic growth.
C)   increases in GDP per capita.
D)   increase in unemployment.E) None of the above
F) A) and B)

Question 20

Productivity is generally measured as:

Accepted Answer

A)   output per worker.
B)   nominal output over time.
C)   real output over time.
D)   output per year.E) B) and C)
F) C) and D)

Exam 10: Economic Growth

Accounting that relates how growth in inputs of production are related to growth in output is called:

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Protecting property rights:

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Often, improvements in technology can:

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The trade-off between physical capital and current consumption:

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The convergence theory predicts that:

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Oil is considered:

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If a country grows at an average rate of 3.5 percent per year, we can estimate it will double its:

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Where does the money for investment in physical capital come from? It largely comes from:

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Using the growth accounting equation, if the growth rate of out is 5%, the growth of labor is 3% and the growth of capital is 2% then if Î±=0.75 then growth of technology can be estimated to be:

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

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Countries with low levels of GDP per capita usually also have:

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

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The enforcement of contracts by the government:

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Household savings rates:

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Productivity is generally measured as:

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Using public policy to promote health can:

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The convergence theory states that:

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Which of the following is generally not a result of increases in productivity per person?

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Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if Î±=0.75 then growth of output can be estimated to be:

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Estimations calculated using the rule of 70:

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