Question 1

If population growth occurs while jobs are difficult to obtain or labor force participation does not increase

Accepted Answer

If population growth occurs without a corresponding increase in labor force participation or job availability, there will be little or no increase in the labor resources of a nation. This could even lead to higher unemployment rates and a decrease in per capita GDP.

Question 2

Assume that a country has had a relatively steady growth of aggregate real GDP. A higher population growth tends to

Accepted Answer

If the population grows faster than real GDP, then per capita real GDP will decrease because the same amount of output must be divided among a larger population. This can lead to lower standards of living if the increase in population outpaces the growth of output.

Question 3

According to the text, the 17 countries with high degrees of economic freedom

Accepted Answer

The text states that the 17 countries with high degrees of economic freedom account for 81 percent of total world output.

Question 4

What will happen to the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4.5 percent and the annual rate of population growth goes from 3 percent to 3.5 percent?

Accepted Answer

The annual rate of growth of per capita real GDP is calculated as the difference between the annual rate of growth of real GDP and the annual rate of population growth. In this case, the annual rate of growth of per capita real GDP will decrease from 1.5 percent to 1 percent because real GDP grows at a constant rate of 4.5 percent, but population growth increases from 3 percent to 3.5 percent.

Question 5

If the level of aggregate real Gross Domestic Product (GDP)remains constant, a reduction in the population

Accepted Answer

If the level of aggregate real GDP remains constant and the population decreases, there are fewer people who need to share the output of the economy. This means that there is more output available per person, leading to an increase in per capita real GDP.

Question 6

In the determination of economic growth, political freedom

Accepted Answer

Various studies have indicated that economic freedom plays a more significant role in determining economic growth than political freedom. Economic freedom enables individuals to engage in economic activities without government interference, thus leading to better economic performance. However, this does not imply that political freedom is entirely insignificant. Both economic and political freedom complement each other, but this question is specifically about their relative importance in determining economic growth.

Question 7

Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?

Accepted Answer

The correct answer is A.The growth rate of per capita real GDP is calculated by subtracting the population growth rate from the GDP growth rate. In this case, the GDP growth rate is 4 percent and the population growth rate is 5 percent, so the growth rate of per capita real GDP is 4 percent - 5 percent = -1 percent.

Question 8

The rate of growth in real GDP minus the rate of growth of the population is the

Accepted Answer

The rate of growth in real GDP minus the rate of growth of the population gives us the rate of growth of per capita real GDP, which measures how much economic output is produced per person in the population. It is an important indicator of living standards and economic well-being. A is incorrect because nominal GDP includes inflation and does not account for changes in the population size. B is incorrect because unemployment rate is a measure of the percentage of the labor force that is unemployed and does not account for changes in real GDP or population growth. C is incorrect because population growth rate only measures the percentage change in population size and does not account for changes in real GDP or living standards.

Question 9

Over the past decade, a nation's real Gross Domestic Product (GDP)grew at a constant rate of 10 percent per year while its population grew 8 percent annually. Forecasters predict that during the coming decade, real GDP will continue to grow 10 percent annually, but the population growth rate is expected to drop to 6 percent annually. If the forecasters are correct, which of the following will be TRUE?

Accepted Answer

The annual growth rate of per capita real GDP is the difference between the growth rate of real GDP and the population growth rate. Initially, it was 10% - 8% = 2%. With the new population growth rate, it will be 10% - 6% = 4%.

Question 10

If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will

Accepted Answer

While per capita real GDP is growing at a constant rate of 4 percent, an increase in population growth from 1 percent to 2 percent means that the economy is producing goods and services for more people. As a result, the total output of the economy is increasing at a faster rate than before, but the growth rate of per capita real GDP is slowing down. Therefore, the annual rate of growth of per capita real GDP will decrease.

Question 11

In nondemocratic countries that have experienced consistent economic growth and improvements in their standards of living

Accepted Answer

The answer of In nondemocratic countries that have experienced consistent...

Question 12

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

The formula for per capita real GDP growth rate is:

Per capita real GDP growth rate = Real GDP growth rate – Population growth rate

Substituting the given values, we get:

Per capita real GDP growth rate = 4% - 3% = 1%

Therefore, the annual rate of growth of per capita real GDP is 1 percent.

Question 13

Suppose a nation's rate of growth of per capita real Gross Domestic Product (GDP)is 3 percent and its rate of growth in real GDP is 4 percent. Given this information, the nation's population growth rate is approximately equal to

Accepted Answer

The rate of growth of per capita real GDP represents the increase in the value of economic output per person, adjusted for inflation. If this rate is 3 percent and the rate of growth in real GDP is 4 percent, then we can assume that the population of the nation is growing by approximately 1 percent (4 percent - 3 percent = 1 percent). Therefore, the best choice is A) 1 percent.

Question 14

The term "economic freedom" means

Accepted Answer

Economic freedom encompasses all of the above rights. The right to own private property allows individuals to control and use their resources as they see fit. The right to trade goods and services allows individuals to freely exchange resources and negotiate mutually beneficial transactions. The right to own financial assets allows individuals to save and invest their resources for future use. All of these rights contribute to economic freedom and the ability of individuals to make choices and pursue their own economic goals.

Question 15

Suppose that the real Gross Domestic Product (GDP)growth rate for a country was 7 percent and the population growth rate was 3 percent. What would the per capital real Gross Domestic Product (GDP)growth rate be for this country?

Accepted Answer

Per capita real GDP growth rate = Real GDP growth rate - Population growth rate
= 7% - 3%
= 4%
Therefore, the per capita real GDP growth rate for this country would be 4 percent.

Question 16

With respect to economic freedom, which of the following is TRUE?

Accepted Answer

As economic freedom increases, it allows individuals and businesses to make their own economic decisions without interference from the government. This leads to increased innovation, investment, and competition, all of which contribute to economic growth. Therefore, option D is true. Options A, B, and C are all false statements.

Question 17

Political freedom can sometimes moderately reduce economic growth because

Accepted Answer

When there is greater political freedom, special interest groups may have more power and influence, leading to policies that benefit them but harm the overall economy. For example, they may advocate for protectionist policies that limit foreign competition or regulations that stifle innovation. This can lead to slower economic growth.

Question 18

According to the text, population growth in many poor countries does not generally result in increased labor resources because

Accepted Answer

The text states that "population growth in many poor countries does not generally result in increased labor resources because many people do not join the labor force." This indicates that a significant portion of the growing population is not participating in the labor force, and thus, not contributing to increased labor resources.

Question 19

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 5 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

The annual rate of growth of per capita real GDP can be calculated as:

Growth rate of per capita real GDP = Growth rate of real GDP - Growth rate of population

Given that real GDP grows at a constant rate of 5 percent per year and the annual rate of population growth is 3 percent, the growth rate of per capita real GDP can be calculated as:

Growth rate of per capita real GDP = 5% - 3%
Growth rate of per capita real GDP = 2%

Therefore, the annual rate of growth of per capita real GDP is 2 percent per year.

Question 20

Suppose a nation's real Gross Domestic Product (GDP)grows at a rate of 2 percent per year while its population grows 2 percent annually. Given this information, this nation's annual rate of per capita real GDP growth is equal to

Accepted Answer

Per capita real GDP is calculated by dividing the real GDP by the population. If the real GDP and the population both grow at the same rate, the per capita real GDP will remain constant. Therefore, in this case, the per capita real GDP growth rate will be 0 percent.

Quiz 17: Policies and Prospects for Global Economic Growth