Chapter 9: Global Economic Growth and Development

1. Chapter 9: Global Economic Growth and Development

2. According to your text, which of the following countries currently has the highest annual per capita Gross Domestic Product (GDP) growth rate? • China • Japan • Germany • United States

3. Economic growth is usually defined as • the rate of increase in output divided by the increase in labor. • the increase in output over time, as measured by real per capita Gross Domestic Product (GDP). • the increase in input availability. • the reduction in the real cost of necessities.

4. Labor productivity can best be calculated as • real Gross Domestic Product (GDP) / Gross Domestic Product (GDP) price index. • real Gross Domestic Product (GDP) / number of workers. • number of workers / hours of work. • real wages / hours of work.

5. Labor productivity increases when • the population increases. • output increases even if the labor force has decreased. • output increases at the same rate as the labor force increases. • output increases faster than population increases.

6. Economic growth tends to be higher in a country that • has a low saving rate. • has an open economy that encourages the rapid spread of technology. • has an undeveloped system of property rights. • does not grant patents to investors.

7. If all income is consumed in a year, then • investment spending will increase. • income next year will increase. • investment spending will be zero. • any investment spending will be done by the government.

8. Economic growth depends on • low tax rates. • high government spending. • high rates of consumption. • increases in the capital stock as a result of saving.

9. Regarding the role of saving in economic growth, studies indicate that • there is a positive relationship between economic growth and saving. • there is no relationship between economic growth and saving. • there is a negative relationship between economic growth and saving. • there is both a positive and a negative relationship between economic growth and saving.

10. Which of the following are mentioned as forces of the new growth theory that influence economic growth?I. TechnologyII. ResearchIII. Innovations • I only • I and II only • I and III only • II and III only • I, II, and III

11. 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 • capital accumulation. • increased gross investment. • technological progress. • an increase in per capita real income.

12. Economists typically agree that the special protection given to owners of patents tends to • reduce expenditures on research and development. • increase expenditures on research and development. • reduce economic growth. • reduce productivity.

13. Which of the following does free trade encourage? • more rapid spread of technology • higher rates of economic growth • domestic industries' access to larger markets • all of the above

14. The more certain private property rights are, • the less people need to invest in education or human capital development. • the less entrepreneurship there will be. • the more capital accumulation there will be. • the more an economy must grow to maintain a certain living standard.

15. The immediate effect of increased population growth, with real GDP growth unchanged, is to • reduce economic growth by reducing per capita real GDP. • increase economic growth by stimulating more saving. • increase economic growth by boosting the capital stock. • leave economic growth unchanged.

16. The protection of property rights leads to • more poverty. • more illiteracy. • more capital formation. • unemployment.

17. In the absence of well-defined property rights, we would likely find • people with more incentives to take risks. • people with less incentives to take risks. • higher economic growth rates. • increases in investment activity.

18. All of the following are listed in the text as being keys to economic development EXCEPT • a system of property rights. • an educated population. • an open economy. • a higher level of protectionism.

19. The three stages of economic development include • the agriculture stage, the manufacturing stage, and the service sector stage. • the computerized stage, the agriculture stage, and the manufacturing stage. • the feudal stage, the agriculture stage, and the totalitarian stage. • the agriculture stage, the manufacturing stage, and the socialist stage.

20. Economists have determined that there are four factors that seem to strongly affect a nation's rate of economic development. Which is NOT one of these four factors? • establishing a system of property rights • developing an educated population • supporting current industries and the jobs they provide instead of adopting new technology that brings disruptive social changes • limiting the extent to which the government imposes trade barriers

21. Which one of the following is a key to economic development? • the removal of property rights • the preservation of established means of production • an educated population • a high level of protection against imported products