Question 1

The Industrial Revolution began in

Accepted Answer

The Industrial Revolution is generally considered to have started in England in the mid-18th century, around 1750. This is when new inventions and technological advancements began to transform the way goods were produced, leading to increased productivity and economic growth. While other countries did later experience their own industrial revolutions, the timing and location of the first one is typically attributed to England.

Question 2

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Accepted Answer

The real GDP is rising at a slower pace than the population, which means that the economy is not generating enough output to keep up with the growth in the number of people. Therefore, the standard of living is falling since there are fewer goods and services available per person.

Question 3

The period of time from 1,000,000 B.C.to 1300 A.D.was a period of

Accepted Answer

During this period, there were no sustained economic growth as humans were still in the early stages of development and were mostly hunter-gatherers. Agriculture emerged around 10,000 B.C., but it took several thousand years for it to become the primary way of life for most people. The rise of civilizations and development of trade networks did not occur until much later, after 1300 A.D.

Question 4

Growth in real GDP per capita for the world economy was greatest during

Accepted Answer

The twentieth century saw the greatest growth in real GDP per capita for the world economy, largely due to advancements in technology, globalization, and policies promoting economic growth. This century saw unprecedented increases in productivity, global trade, and higher standards of living for many people around the world.

Question 5

According to Douglass North,the Industrial Revolution occurred in England because

Accepted Answer

Douglass North argued that the Industrial Revolution occurred in England because the British Parliament took control of the government and could credibly commit to upholding property rights. This meant that individuals and businesses felt secure in investing and innovating, leading to sustained economic growth. In contrast, countries where property rights were not well-protected struggled to transition to industrialization.

Question 6

Significant economic growth did not begin in the world until

Accepted Answer

Significant economic growth on a global scale is widely recognized to have begun around 1750 A.D., coinciding with the onset of the Industrial Revolution. This period marked a dramatic increase in the rate of economic growth due to technological innovations, increased productivity, and the expansion of global trade networks.

Question 7

Which of the following accurately describes economic growth and standards of living between 1,000,000 B.C.and 1300 A.D.?

Accepted Answer

Between 1,000,000 B.C. and 1300 A.D., there is no evidence of sustained economic growth or improvement in standards of living. Human societies in this period were largely hunter-gatherer societies with minimal technology, and there was little or no improvement in productivity or living conditions over this long timescale. While there were temporary periods of innovation or advancement, such as the development of agriculture, these were not sustained or widespread enough to constitute sustained economic growth.

Question 8

If real GDP per capita in the United States is $8,000,what will real GDP per capita in the United States be after 5 years if real GDP per capita grows at an annual rate of 3.2%?

Accepted Answer

Using the formula for compound interest:
$8,000*(1+0.032)^5 = $9,365.27
Rounding to the nearest dollar gives $9,365, which corresponds to choice C.

Question 9

The rapid growth of the Chinese economy should

Accepted Answer

The rapid growth of the Chinese economy may benefit U.S. consumers as they will have access to less-expensive consumer goods. In terms of job opportunities, the effect may be more complex and not as straightforward as choice B suggests. Factors such as outsourcing, foreign investment, and shifting market demands also play a role in determining the mix of jobs available to citizens of the United States.

Question 10

One of the primary reasons that Mexico has experienced relatively low rates of economic growth is that for Mexican entrepreneurs

Accepted Answer

One of the primary reasons for Mexico's relatively low economic growth is the problems in the banking system, which have made it difficult for entrepreneurs to obtain the funding needed to finance expansion. Mexico's banking system has traditionally been dominated by a small number of large institutions, causing a lack of competition and access to credit for small and medium-sized enterprises. This has hindered entrepreneurship, innovation, and job creation, ultimately contributing to low rates of economic growth.

Question 11

If real GDP in the United States is growing at an annual rate of 3.2% per capita and Bolivia's real GDP per capita is growing at a rate of 1.3%,which of the following would we expect in the long run? Assume real GDP per capita in the United States begins at a level above that of real GDP per capita in Bolivia.

Accepted Answer

Since the United States' real GDP per capita is growing at a faster rate (3.2%) compared to Bolivia's (1.3%), the absolute difference in real GDP per capita between the two countries will increase over time, assuming all other factors remain constant.

Question 12

If real GDP per capita in Ireland is estimated to be $7,400 in 2016,what will real GDP per capita be in 2021 if real GDP per capita grows at an annual rate of 2.8%?

Accepted Answer

We can use the formula:

Real GDP per capita in future year = Real GDP per capita in current year × (1 + annual growth rate)^(number of years)

Plugging in the given values, we get:

Real GDP per capita in 2021 = $7,400 × (1 + 0.028)^5
                           = $7,400 × 1.1549
                           = $8,530.28

Rounding this to the nearest dollar, we get the answer as B) $8,496.

Question 13

Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can

Accepted Answer

Increasing the growth rate of GDP per capita can lead to an increase in employment opportunities, higher wages, increased access to education and healthcare, and access to basic necessities which can, in turn, increase overall living conditions or standards of living.

Question 14

According to the World Bank,in 2006,China's GDP was approximately $2.7 trillion (or $2,700 billion).That same year,India's GDP was approximately $906.3 billion.With which of the following populations would China's standard of living have been considered higher than India's that year?

Accepted Answer

China's GDP per capita (GDP divided by population) in 2006 was $2,076, while India's GDP per capita was only $826. This shows that despite India having a smaller GDP overall, their larger population means that their standard of living is lower than that of China's. Therefore, option A (with both countries' populations closer to their actual values at the time) is the best choice. Option B has an unrealistic population for China, option C has unrealistic populations for both countries, and option D has an unrealistic population for both China and India.

Question 15

If real GDP per capita in the United States is $8,000 in 2016,and if real GDP per capita is $12,000 in 2026,what is the average annual percent change in the growth rate of GDP per capita between 2016 and 2026?

Accepted Answer

To calculate the average annual percent change, we use the formula:
[(Ending Value / Beginning Value)^(1/Number of Years)] - 1

Plugging in the numbers we get:
[(12,000 / 8,000)^(1/10)] - 1 = 0.0475

Multiplying by 100 gives us the percentage:
4.75%

Therefore, the answer is B (5%), the closest choice to our calculated value.

Question 16

Over the past 50 years,deaths among children have

Accepted Answer

According to global health data, deaths among children have declined in nearly all countries, including most low-income countries, over the past 50 years. The progress has been made in reducing child mortality rates through improvements in healthcare access and technology, vaccination campaigns, and education of parents on health and hygiene practices.

Question 17

Suppose that in 2016,real GDP grew in Estonia by 3% and the population increased by 5%.Therefore,in 2016,Estonia experienced

Accepted Answer

Economic growth is measured by an increase in real GDP, which did happen in Estonia in 2016. However, an increase in population without a corresponding increase in real GDP per capita implies that the increase in output was not distributed evenly among the population. Therefore, while there was economic growth, there was not necessarily an increase in living standards for all citizens.

Question 18

The best measure of a country's standard of living is

Accepted Answer

GDP per capita is the most commonly used measure to compare living standards across countries. It reflects the average income per person in a country and takes into account the size of the population. It is a better measure than total nominal GDP because a large economy with a high GDP may not necessarily have a high standard of living if the population is also large. GDP per capita also considers the distribution of income in a country, as a high average income can mask inequality. GDP per unit of capital and GDP per labor hour are not as relevant as they do not capture the overall well-being of the population.

Question 19

If real GDP per capita in the United States is $8,000 in 2016,and if real GDP per capita is $12,000 in 2026,what is the total percent change in the growth rate of GDP per capita between 2016 and 2026?

Accepted Answer

The percent change in GDP per capita is calculated as ((12,000 - 8,000) / 8,000) * 100 = 50%.

Question 20

Table 22-1
 $$\begin{array} { | l | c | c | } 
\hline \text { Country } & \begin{array} { c } 
G D P \
\text { (billions of dollars) }
\end{array} & \begin{array} { c } 
\text { Population } \
\text { (millions of people) }
\end{array} \
\hline \text { Sweden } & \$ 3.85 & 9.05 \
\hline \text { Ireland } & 2.23 & 4.21 \
\hline
\end{array}$$
-Refer to Table 22-1.Based on the table above,which country has a higher standard of living and why?

Accepted Answer

The answer of Table 22-1
 \[\begin{array} { | l |...

Quiz 22: Long-Run Economic Growth: Sources and Policies