Deck 13: The Economics of Sustainability

Question 1

Gross Domestic Product (GDP), the most widely used indicator of macroeconomic
activities explicitly includes natural resources and the environment.

Answer 1

False

Question 2

GDP measures the 'flow' of total income.

Answer 2

True

Question 3

GDP per capita, is used as a proxy for measuring the standard of living in a nation.

Answer 3

True

Question 4

For any given year, GDP explicitly provides information about changes in the value of
the initial capital stock.

Question 5

It is important to provide allowances for the depreciation of capital assets in order to
safeguard an economy's wealth.

Question 6

In order to maintain a sustained level of consumption, an economy requires the allowance
for depreciation of human-made capital and resource depletion to be reinvested in the
economy.

Question 7

Under the notion of weak sustainability, if resource depletion is not expected to impair
the future productive capacity of a nation, manufactured and natural capital are assumed
to be close substitutes.

Question 8

Factor substitution can occur between renewable and non-renewable resources.

Question 9

Greening the SNA based on weak sustainability takes thresholds in critical natural capital
into account.

Question 10

Green accounting should include economic welfare.

Question 11

Countries normally take taking into consideration to the resource flow of their trading
partners.

Question 12

Through trade, rich countries are able to transfer of environmental and resource wealth
from poor countries to themselves.

Question 13

Trade is always cognizant of environmental sustainability.

Question 14

NNPe assumes 'known reserves' of mineral and other exhaustible resources.

Question 15

The general consensus is that fully corrected green accounting is possible.

Question 16

Which one of the following is not a limitation of GDP?

A) GDP does not include volunteer work.
B) GDP does not value leisure time.
C) GDP does not account for loss of non-renewables.
D) GDP does not consider capital depreciation
E) GDP does not account for loss of natural resources.

Question 17

Which one of the following measures is obtained by adjusting Net Domestic Product?

A) GDP
B) the Index of Sustainable Economic Welfare (ISEW)
C) the Genuine Net Savings (GS)
D) Gini Coefficient
E) environmentally adjusted net domestic product (EDP)

Question 18

Which of the following assets will have no valuation problem when one needs to account for capital depreciation?

A) Farm tractors.
B) Oil refineries.
C) Farmland.
D) Natural gas pipelines.
E) Railways.

Question 19

Which of the following is a capital stock?

A) Farmland.
B) Aquifers.
C) Diamond mines.
D) None of the above.
E) All of the above.

Question 20

Which one of the following is the best example of critical natural capital?

A) Ozone layer.
B) Wetlands.
C) Farmland.
D) A forest.
E) All of the above.

Question 21

Which of the follow is an indicator of sustainable income?

A) Gross domestic Product.
B) Net domestic Product.
C) Index of Sustainable Economic Welfare.
D) System of National Accounts.
E) Ecological Footprint.

Question 22

When was the international standard of national accounts revised for the first time to incorporated a 'satellite system' for organizing data and other information pertaining to natural resources and the environment?

A) Never
B) 2016
C) 1916
D) 1968
E) 1993

Question 23

In which way is EDP per capita different than GDP per capita?

A) EDP is calculated after accounting for both the deprecation of human-made
Capital and the costs to the environment.
B) GDP is calculated after accounting for both the deprecation of human-made
Capital and the costs to the environment.
C) EDP does not include volunteer services.
D) EDP does not include part-time work.
E) EDP does not include depletion of exhaustible resources.

Question 24

"Not all environmental assets have to be 'priced' in order to design environmentally adjusted indicators that are of considerable value to decision makers". How prevalent is
this view?

A) All economists agree with the statement.
B) No economist agrees with the statement.
C) Some economists agree with this statement.
D) Only Neo-Malthusians agree with this statement.
E) Only Neo-Malthusians disagree with this statement.

Question 25

Which of the following statements is most accurate?

A) For many developing countries, genuine savings are found to be negative.
B) For many 'resource dependent countries,' the adjusted net genuine savings and
Their gross domestic savings are usually both negative.
C) For developing countries, the adjustment for resource depletion would have a
Positive impact on their genuine savings.
D) Resource dependent countries with a persistent positive net genuine savings rates
Suggests that their use of natural capital is unsustainable.
E) Genuine savings is negatively influenced by expenditures on human capital.