Question 1

Since the year 2000,economic performance in sub-Saharan Africa has improved; this can be attributed to all of the following reasons EXCEPT for:&#10;A) improved economic policies and management.&#10;B) more democratic and accountable governments.&#10;C) a return to state-directed economic policies.&#10;D) new technologies.

Accepted Answer

The other three choices (improved economic policies and management, more democratic and accountable governments, and new technologies) have all been contributing factors to the improvement in economic performance in sub-Saharan Africa since 2000. However, a return to state-directed economic policies has not been a significant contributor to this improvement. In fact, many countries in the region have been moving away from state intervention in the economy in favor of market-oriented reforms.

Question 2

Most economists agree that an effective way of comparing income levels between countries around the world is through the use of:&#10;A) employment statistics.&#10;B) GDP divided by GNP.&#10;C) foreign investment.&#10;D) purchasing power parity.

Accepted Answer

Purchasing power parity (PPP) takes into account the relative cost of living and inflation rates between countries when comparing income levels. This allows for a more accurate comparison of the true purchasing power of individuals in different countries. Employment statistics, GDP divided by GNP, and foreign investment do not necessarily reflect the actual standard of living or purchasing power of individuals in a country.

Question 3

The human development index is a composite of three basic measures of human welfare.Which of the following is NOT a component of the human development index?&#10;A) life expectancy&#10;B) dollars of income&#10;C) infant mortality rate&#10;D) years of schooling

Accepted Answer

The Human Development Index (HDI) is composed of three main components: life expectancy (to assess health), years of schooling (to evaluate education level), and gross national income per capita (to measure standard of living). The infant mortality rate, while related to health outcomes, is not directly used as a component in the HDI calculation.

Question 4

Based on Maddison's research,with an annual world income growth rate of 1.3 percent,average income doubles in:&#10;A) 21 years.&#10;B) 30 years.&#10;C) 55 years.&#10;D) 90 years.

Accepted Answer

Using the rule of 70, if the annual growth rate is 1.3%, it takes approximately 70 / 1.3 = 53.85 years, which is closest to 55 years (C), for the average income to double.

Question 5

In some nations,illegal activities may even be included when calculating GDP; this is most notable in Afghanistan where the GDP includes:&#10;A) military expenses.&#10;B) child trafficking.&#10;C) money laundering.&#10;D) poppy production.

Accepted Answer

The GDP in Afghanistan includes poppy production, which is an illegal activity related to the cultivation of opium poppy for the production of illegal drugs such as heroin. This is due to the significant contribution of the opium trade to the country's economy. However, it is important to note that this inclusion is controversial and not universally accepted.

Question 6

In 2009,Bangladesh's GNP was 9 percent higher than its GDP; this occurred due to the fact that:&#10;A) large numbers of Bangladeshi men and women work abroad.&#10;B) Bangladesh is rich in ore and mineral deposits.&#10;C) Bangladesh is subject to frequent and unpredictable changes in weather patterns.&#10;D) foreign investment has been robust in the country.

Accepted Answer

The difference between GNP and GDP is that GNP includes income earned by domestic citizens abroad, while GDP measures income generated within the country's borders. Therefore, the higher GNP in Bangladesh suggests that a significant number of Bangladeshi citizens are working and earning income abroad. This is supported by data from the World Bank, which shows that remittances from overseas workers accounted for 7.8 percent of Bangladesh's GDP in 2009.

Question 7

All of the regions will meet Target 1 (to halve the number of poor)EXCEPT:&#10;A) Europe and Central Asia.&#10;B) the Middle East and North Africa.&#10;C) sub-Saharan Africa and South Asia.&#10;D) South America.

Accepted Answer

Sub-Saharan Africa and South Asia are regions that have historically struggled with high levels of poverty and have faced significant challenges in reducing poverty rates at the same pace as other regions. Despite efforts and some progress, these areas are not expected to meet the target of halving the number of poor due to factors like high population growth, conflict, and less robust economic growth compared to other regions.

Question 8

More than three-quarters of Angola's national income is derived from:&#10;A) cotton.&#10;B) oil.&#10;C) rubber trees.&#10;D) tourism.

Accepted Answer

Angola's national income is mainly derived from the oil industry, which accounts for more than three-quarters of the country's GDP.

Question 9

For which of the following countries is the divergence between GNP per capita measured at official exchange rates and at purchasing power parity (PPP)likely to be largest?&#10;A) Japan&#10;B) United States&#10;C) Brazil&#10;D) Ethiopia

Accepted Answer

The divergence between GNP per capita measured at official exchange rates and at purchasing power parity (PPP) is likely to be largest for countries with low income and low levels of economic development, such as Ethiopia. This is because official exchange rates tend to overvalue the currency of such countries, thereby exaggerating their GNP per capita compared to what it would be at PPP. In contrast, for countries like Japan and the United States, which have higher levels of economic development and stronger currencies, the divergence is likely to be smaller. Brazil falls somewhere in between the two, but is still closer to the higher-income countries than to Ethiopia in terms of economic development.

Question 10

According to Maddison,rapid economic growth in the world's per capita income as we know it began around the year:&#10;A) 1000.&#10;B) 1492.&#10;C) 1820.&#10;D) 1914.

Accepted Answer

Maddison argues that rapid economic growth in the world's per capita income began around the year 1820, which marked the start of the Industrial Revolution. Prior to this time, economic growth was much slower and subject to constraints such as a limited supply of land and resources. Therefore, choice C, 1820, is the best answer.

Question 11

According to economists,the objective of economic growth is to:&#10;A) increase happiness.&#10;B) provide more choices.&#10;C) increase development.&#10;D) decrease corruption.

Accepted Answer

The answer of According to economists,the objective of economic growth...

Question 12

In order to effectively compare levels of GDP per capita across countries,it is necessary to convert GDP per capita into a:&#10;A) common currency.&#10;B) series of stocks and bonds.&#10;C) time-line series illustrating business cycles.&#10;D) GNP per capita.

Accepted Answer

The answer of In order to effectively compare levels of...

Question 13

GNP or GDP divided by total population provides a measure of:&#10;A) the wellness index.&#10;B) the gap between the rich and poor.&#10;C) per capita income.&#10;D) the poverty index.

Accepted Answer

The answer of GNP or GDP divided by total population...

Question 14

A country's nominal GNP for a given year is defined as the total market value of:&#10;A) labor plus capital plus technical change.&#10;B) all final goods and services produced.&#10;C) all final plus intermediate goods and services produced.&#10;D) all final goods and services consumed.

Accepted Answer

The answer of A country's nominal GNP for a given...

Question 15

When world GDP (2009)is calculated by converting each nation's GDP into a common currency using market exchange rates,world output by low- and middle-income economies account for:&#10;A) 17 percent.&#10;B) 29 percent.&#10;C) 58 percent.&#10;D) 67 percent.

Accepted Answer

The answer of When world GDP (2009)is calculated by converting...

Question 16

A criticism of using GDP to measure growth is that it does not include &#34;social bads&#34;; these include all of the following EXCEPT:&#10;A) crime.&#10;B) pollution.&#10;C) inflation.&#10;D) congestion.

Accepted Answer

The answer of A criticism of using GDP to measure...

Question 17

The total number of Millennium Development Goals established in the year 2000 were:&#10;A) 5.&#10;B) 8.&#10;C) 10.&#10;D) 18.

Accepted Answer

The answer of The total number of Millennium Development Goals...

Question 18

The Easterlin paradox concerns itself with the study of:&#10;A) wealth.&#10;B) happiness.&#10;C) environmental damage caused by development.&#10;D) the demise of the developed nations at the expense of the rapidly developing ones.

Accepted Answer

The answer of The Easterlin paradox concerns itself with the...

Question 19

One of the problems in measuring GDP is that family farm production of food for personal consumption is not included; this is illustrated by the problem of calculating Cambodia's GDP where unpaid family workers represent:

A) 75 percent of the labor force.
B) 57 percent of the labor force.
C) 33 percent of the labor force.
D) 9 percent of the labor force.

Accepted Answer

The answer of One of the problems in measuring GDP...

Question 20

The 1980s are often referred to as &#34;the lost decade&#34; in:&#10;A) Asia.&#10;B) the Middle East.&#10;C) Scandinavia.&#10;D) Latin America.

Accepted Answer

The answer of The 1980s are often referred to as...

Question 21

IDs and Paired-Concept Questions&#10;These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.&#10;Gross national product (GNP),gross domestic product (GDP)

Accepted Answer