05 Jun Question EC 202-HY Chapter Review 11 1. Which of the following is the correct definition of economic growth?
Question
EC 202-HY Chapter Review 11
1. Which of the following is the correct definition of economic growth?
a. growth rate of GDP
b. growth rate of per capita GDP
c. growth rate of real per capita GDPd. growth rate of employment rate
e. growth rate of both GDP and employment rate
2. For calculating economic growth of a country we need to collect data on which of the following?
I. nominal GDP II. real GDP III. prices
IV. population
a. either I or IIb. I and IIIc. II and IIId. I and IVe. II and IVf. I, II, and IIIg. I, II, III, and IV
3. How does the World Bank classify as rich (R) or poor (P) the following countries: Bangladesh, Israel, North Korea, South Korea?
a. P, P, P, Pb. P, R, R, Pc. P, R, P, Pd. P, R, R, Re. P, R, P, R
4. Which of the following years roughly presents a historical break for an unprecedented increase in average world living standards?
a. 1350
b. 1600c. 1700d. 1800
5. Which of the following is true about income levels in Western Europe and Latin America before 1700?
a. Average income in Western Europe was higher than that in Latin America
b. Average income in Western Europe was lower than that in Latin America
c. Average income in Western Europe was equal to that in Latin America
6. Which of the following was responsible for slower economic growth before the Industrial Revolution?
a. There was no instance of technological innovation.
b. Population growth caught up to the rate of technological innovation.
c. The rate of technological innovation outpaced population growth
7. Which of the following is true regarding world economic growth rates for the different historical eras?
a. 0–1800 < 1800–1900 < 1900–1950 < 1950–2000
b. 1900–1950 < 0–1800 < 1800–1900 < 1950–2000
c. 1950–2000 < 0–1800 < 1800–1900 < 1900–1950
d. 1950–2000 < 1900–1950 < 1800–1900 < 0–1800
8. The per capita real GDP of the United States and Europe was higher than that of the rest of the world, and this gap widened largely during the
a. Seventeenth Century
b. Eighteenth Century
c. Nineteenth Centuryd. Twentieth Century
Page 1 of 3EC 202-HY Chapter Review 11
9. Which of the following is the correct expression for calculating economic growth?
a. %?Nominal GDP – %?Prices + %?Population
b. %?Nominal GDP + %?Prices – %?Populationc. %?Real GDP – %?Prices – %?Population
d. %?Real GDP – %?Population
10. From 2011 to 2012, the country of Fredonia experienced a growth rate of – 1.8%. If the nominal GDP increased by 2% and the population growth was recorded as 0.8%, calculate the annual inflation rate in Fredonia.
a. –0.6%b. 3%c. 0.2%
d. We need information on prices to be able to calculate the inflation rate.
11. Using the information in the table below, calculate the growth for 2011.
13. The real per capita GDP in country X is 4 times of that in country Y. The annual growth rate in country X is 2.33%, while in country Y it is 7%. How many years will it take for country Y to catch up to the real per capita GDP of country X?
a. 10 years
b. 30 years
c. 40 years
d. 120 years
e. Country Y will never be able to catch up to country X.
14. The rule of 70 has a variety of applications involving growth rates of variables. Using the rule, calculate the time it will take for price levels to double if the annual rate of inflation is 7.5%.
a. 2 years.b. 9 years.c. 13 years.
d. The rule of 70 can only be used to calculate growth and not decay of variables.
15. All of the following qualifies as capital inDateNominal GDP Inflation rate ecPonomicspulationexcept (billions of (millions) current $) a. factories. 2010 14,061 2% 112 b. roads and infrastructure. 2011 14, 660 3% 114 c. machines used by the Ford Motor 2012 14, 992 1% 117 Company. stocks. d. bonds and
a. –1.37%
b. 3.05 %
c. –0.53%
d. 0.53%
12. What is the annual growth rate of a country whose living standards can double in 60 years?
a. 30%b. 1.17%c. 0.86%d. 1.67%
16. Which of the following are key sources of economic growth?
a. resources and technology
b. resources and institution
c. resources, technology and institutions
17. Natural resources includeI. physical land.II. diamonds.III. temperate weather patterns.
a. only I b. I and IIc. I and III d. I, II and III
Page 2 of 3EC 202-HY Chapter Review 11
18. Zimbabwe has recently experienced a spurt in its growth rate, although the total quantity of resources in the country has remained unchanged. This growth must have been caused by
a. a random increase in demand.
b. an increase in imports.
c. a technological advance.
d. a decrease in exports.
19. Which of the following is/are likely to lead to economic growth?
I. More immigrant workers are added to a nation. II. Existing workers in a country get trained to operate a widely used accounting software.
III. More stay-at-home moms join the labor force.
a. only Ib. only IIc. I and IId. I and IIIe. II and IIIf. I, II, and III
20. Countries A and B are exactly similar in terms of resources and technology. Still country A reported a higher growth rate than country B last year. Which of the following can explain this anomaly?
I. higher population growth in country B II. favorable climate in country AIII. lack of proper institutions in country B
a. only Ib. only IIIc. I and IIId. II and IIIe. I, II, and III
21. All of the following can lead to economic growth except
a. an increase in the level of skills of the labor force.b. an increase in the quantity of capital.c. protection of private property rights.d. an increase in the quantity of money.
22. Which of the following institutions will most accurately explain the impact of corruption on economic growth?
a. private-property rights
b. political stability and the rule of lawc. competitive and open markets
d. stable money and prices
23. Consider the case of long-distance telephone service. In country X, there are 20 providers of long-distance telephone service in a highly competitive market environment. On the other hand, in country Y, long-distance telephone service is largely regulated by the government, with the firm Horizon as the sole provider of this service. Under these circumstances, it is expected that
a. country X will have higher growth potential than country Y.
b. country X will have lower growth potential than country Y.
c. countries X and Y will have similar growth potential.
d. More information is needed to comment on the growth potential.
24. Which of the following is true?
a. Taxes on consumers restrict economic growth; hence, taxes on consumers should be abolished to promote growth.
b. Taxes on businesses restrict economic growth; hence, taxes on businesses should be abolished to promote growth.
c. Taxes on both consumers and businesses restrict economic growth; hence, taxes on both consumers and businesses should be abolished to promote growth.
d. Taxes on both consumers and businesses restrict economic growth; hence, an efficient tax system is necessary to fund government activities without largely impeding production and consumption decisions.
Page 3 of 3EC 202-HY Chapter Review 11
1. Which of the following is the correct definition of economic growth?
a. growth rate of GDP
b. growth rate of per capita GDP
c. growth rate of real per capita GDPd. growth rate of employment rate
e. growth rate of both GDP and employment rate
2. For calculating economic growth of a country we need to collect data on which of the following?
I. nominal GDP II. real GDP III. prices
IV. population
a. either I or IIb. I and IIIc. II and IIId. I and IVe. II and IVf. I, II, and IIIg. I, II, III, and IV
3. How does the World Bank classify as rich (R) or poor (P) the following countries: Bangladesh, Israel, North Korea, South Korea?
a. P, P, P, Pb. P, R, R, Pc. P, R, P, Pd. P, R, R, Re. P, R, P, R
4. Which of the following years roughly presents a historical break for an unprecedented increase in average world living standards?
a. 1350
b. 1600c. 1700d. 1800
5. Which of the following is true about income levels in Western Europe and Latin America before 1700?
a. Average income in Western Europe was higher than that in Latin America
b. Average income in Western Europe was lower than that in Latin America
c. Average income in Western Europe was equal to that in Latin America
6. Which of the following was responsible for slower economic growth before the Industrial Revolution?
a. There was no instance of technological innovation.
b. Population growth caught up to the rate of technological innovation.
c. The rate of technological innovation outpaced population growth
7. Which of the following is true regarding world economic growth rates for the different historical eras?
a. 0–1800 < 1800–1900 < 1900–1950 < 1950–2000
b. 1900–1950 < 0–1800 < 1800–1900 < 1950–2000
c. 1950–2000 < 0–1800 < 1800–1900 < 1900–1950
d. 1950–2000 < 1900–1950 < 1800–1900 < 0–1800
8. The per capita real GDP of the United States and Europe was higher than that of the rest of the world, and this gap widened largely during the
a. Seventeenth Century
b. Eighteenth Century
c. Nineteenth Centuryd. Twentieth Century
Page 1 of 3EC 202-HY Chapter Review 11
9. Which of the following is the correct expression for calculating economic growth?
a. %?Nominal GDP – %?Prices + %?Population
b. %?Nominal GDP + %?Prices – %?Populationc. %?Real GDP – %?Prices – %?Population
d. %?Real GDP – %?Population
10. From 2011 to 2012, the country of Fredonia experienced a growth rate of – 1.8%. If the nominal GDP increased by 2% and the population growth was recorded as 0.8%, calculate the annual inflation rate in Fredonia.
a. –0.6%b. 3%c. 0.2%
d. We need information on prices to be able to calculate the inflation rate.
11. Using the information in the table below, calculate the growth for 2011.
13. The real per capita GDP in country X is 4 times of that in country Y. The annual growth rate in country X is 2.33%, while in country Y it is 7%. How many years will it take for country Y to catch up to the real per capita GDP of country X?
a. 10 years
b. 30 years
c. 40 years
d. 120 years
e. Country Y will never be able to catch up to country X.
14. The rule of 70 has a variety of applications involving growth rates of variables. Using the rule, calculate the time it will take for price levels to double if the annual rate of inflation is 7.5%.
a. 2 years.b. 9 years.c. 13 years.
d. The rule of 70 can only be used to calculate growth and not decay of variables.
15. All of the following qualifies as capital inDateNominal GDP Inflation rate ecPonomicspulationexcept (billions of (millions) current $) a. factories. 2010 14,061 2% 112 b. roads and infrastructure. 2011 14, 660 3% 114 c. machines used by the Ford Motor 2012 14, 992 1% 117 Company. stocks. d. bonds and
a. –1.37%
b. 3.05 %
c. –0.53%
d. 0.53%
12. What is the annual growth rate of a country whose living standards can double in 60 years?
a. 30%b. 1.17%c. 0.86%d. 1.67%
16. Which of the following are key sources of economic growth?
a. resources and technology
b. resources and institution
c. resources, technology and institutions
17. Natural resources includeI. physical land.II. diamonds.III. temperate weather patterns.
a. only I b. I and IIc. I and III d. I, II and III
Page 2 of 3EC 202-HY Chapter Review 11
18. Zimbabwe has recently experienced a spurt in its growth rate, although the total quantity of resources in the country has remained unchanged. This growth must have been caused by
a. a random increase in demand.
b. an increase in imports.
c. a technological advance.
d. a decrease in exports.
19. Which of the following is/are likely to lead to economic growth?
I. More immigrant workers are added to a nation. II. Existing workers in a country get trained to operate a widely used accounting software.
III. More stay-at-home moms join the labor force.
a. only Ib. only IIc. I and IId. I and IIIe. II and IIIf. I, II, and III
20. Countries A and B are exactly similar in terms of resources and technology. Still country A reported a higher growth rate than country B last year. Which of the following can explain this anomaly?
I. higher population growth in country B II. favorable climate in country AIII. lack of proper institutions in country B
a. only Ib. only IIIc. I and IIId. II and IIIe. I, II, and III
21. All of the following can lead to economic growth except
a. an increase in the level of skills of the labor force.b. an increase in the quantity of capital.c. protection of private property rights.d. an increase in the quantity of money.
22. Which of the following institutions will most accurately explain the impact of corruption on economic growth?
a. private-property rights
b. political stability and the rule of lawc. competitive and open markets
d. stable money and prices
23. Consider the case of long-distance telephone service. In country X, there are 20 providers of long-distance telephone service in a highly competitive market environment. On the other hand, in country Y, long-distance telephone service is largely regulated by the government, with the firm Horizon as the sole provider of this service. Under these circumstances, it is expected that
a. country X will have higher growth potential than country Y.
b. country X will have lower growth potential than country Y.
c. countries X and Y will have similar growth potential.
d. More information is needed to comment on the growth potential.
24. Which of the following is true?
a. Taxes on consumers restrict economic growth; hence, taxes on consumers should be abolished to promote growth.
b. Taxes on businesses restrict economic growth; hence, taxes on businesses should be abolished to promote growth.
c. Taxes on both consumers and businesses restrict economic growth; hence, taxes on both consumers and businesses should be abolished to promote growth.
d. Taxes on both consumers and businesses restrict economic growth; hence, an efficient tax system is necessary to fund government activities without largely impeding production and consumption decisions.
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