Deck 2: Economic Growth and Latin America

Question 1

Which of the following economists formulated a theory of growth in the 1950s?

A) Adam Smith
B) Robert Solow
C) Paul Romer
D) Douglas North
E) none of the above

Answer 1

B

Question 2

_____ are estimated to be of squatters in Latin America.

A) 240 million.
B) 100 million.
C) 320 million.
D) 130 million.
E) 190 million.

Answer 2

D

Question 3

A property rights problem that affects 25 percent of the population of Latin America is:

A) judicial independence.
B) favoritism of government officials
C) squatting.
D) per astra
E) none of the above

Answer 3

C

Question 4

Which of the following is not an aspect of the rule of law?

A) enforcement of contracts
B) habeas corpus
C) judicial independence
D) favoritism in the decisions of government officials
E) the efficiency of the legal framework

Question 5

In which decade were there serious property rights and rule of law problems in Latin America?

A) 1790s
B) 1830s
C) 1870s
D) 1890s
E) none of the above

Question 6

Which of the following would not cause an upward shift in the production function?

A) a change in the labor force
B) a change in the capital stock
C) a change in technology
D) a change in human capital

Question 7

A change in _____ would cause a movement along the production function.

A) labor
B) K
C) TFP
D) K/L
E) none of the above

Question 8

Which of the following would not cause a shift in the production function?

A) a change in the size of the labor force
B) an increase in the capital stock
C) an improvement in technology
D) lower TFP
E) higher TFP

Question 9

A decrease in the labor force would tend to:

A) decrease GDP.
B) increase GDP.
C) cause the production function to shift down.
D) cause the production function to shift up.
E) none of the above

Question 10

Which of the following would not cause a shift in the production function?

A) a change in the size of the labor force
B) an increase in the capital stock
C) an improvement in technology
D) lower TFP
E) higher TFP

Question 11

If GDP per capita is higher in Chile than Bolivia, what might be causing this?

A) low R&D expenditures in Bolivia
B) high human capital in Bolivia
C) a high K/L ratio in Chile
D) low institutional quality in Chile
E) revenues from copper production in Bolivia

Question 12

One would observe low K/L ratios in:

A) the richest countries in the region.
B) the formal sector of the economy.
C) the manufacturing sector of the economy.
D) the informal sector.
E) none of the above

Question 13

The size of the labor force in Latin America is:

A) 159 million.
B) 203 million.
C) 314 million.
D) 320 million.
E) 327 million.

Question 14

What percentage of the labor force of Latin America is unionized?

A) 14
B) 19
C) 22
D) 29
E) 35

Question 15

The savings rate in Latin America is closest to _____ percent.

A) 4
B) 7
C) 13.6
D) 17.3
E) 28

Question 16

FDI in Latin America is approximately ___ percent of GDP.

A) 1
B) 3
C) 7
D) 12
E) 14

Question 17

The link between education and growth in Latin America is:

A) the informal economy.
B) educational inequality.
C) human capital.
D) teachers unions.
E) robustness.

Question 18

For Latin America, R&D as a percentage of GDP is:

A) small.
B) large.
C) inappropriate.
D) 6.2.
E) 8.7.

Question 19

What are some of the dimensions of the rule of law? Why does this matter in Latin America?

Question 20

Suppose that a country in Latin America experienced a breakdown of basic government in the decades following independence. Further assume that domestic conflicts led to serious loss of life and destruction of infrastructure. Using the theory of economic growth, draw a graph and describe how this could lead to low or even negative economic growth.

Question 21

As a result of the War of the Triple Alliance (1865 - 1870), the population of Paraguay declined from 525,000 to 221,000. Using a graph, show and explain how this would have affected the GDP of the country.

Question 22

Using a production function show how the decline in population in the 16^th century hampered economic growth in the region.

Question 23

Suppose that millions of workers from Mexico immigrate to the U.S. Show how this would affect Mexico's GDP.

Question 24

Why did Latin America fail to grow from 1820 to 1850?

Question 25

Suppose that Chile is growing at 4 percent and Bolivia is growing at 2 percent. Using a standard model of economic growth, show and explain what might cause this difference.

Question 26

Why would the K/L ratio be important in Latin America? What problems are associated with the accumulation of capital in the region?

Question 27

Latin America's principal economic problem has been relatively slow growth. Explain this problem in terms of labor, capital, human capital, and TFP.

Question 28

Using a production function, show why economic growth in Latin America has tended to be slower than economic growth in North America.

Question 29

Why have the economies of Latin America grown more slowly than they could have?

Question 30

Describe how infrastructure and human capital development have tended to lower economic growth in Latin America.