Question 1

The U.S. Patent Office grants Rene a patent for a new method of waterproofing outdoor gear. It is acting in its role to promote economic growth by:

Accepted Answer

The U.S. Patent Office, by granting patents, ensures a stable legal system where inventors are protected and incentivized through exclusive rights to their inventions, thereby promoting economic growth by encouraging innovation and investment in new technologies.

Question 2

In the absence of copyright and patent laws:

Accepted Answer

Without copyright and patent laws, innovators may struggle to profit from their inventions as others could easily replicate and sell their innovations without consequence. This reduces the incentive for people to innovate in the first place.

Question 3

The historical evidence shows that:

Accepted Answer

There is a strong correlation between a country's level of freedom and its economic growth. Studies have shown that countries with higher levels of economic freedom, such as free markets and low government intervention, tend to have higher GDP per capita and better living standards for their citizens. On the other hand, countries with high levels of government control and intervention, such as dictatorships, have shown to have lower economic growth and development.

Question 4

Which of the following factors is NOT generally viewed by economists as critical to economic growth?

Accepted Answer

Access to large amounts of natural resources is not necessarily critical to economic growth, as many countries with limited natural resources have achieved significant economic growth through other means such as innovation, education, and trade.

Question 5

Which of the following is NOT an example of infrastructure in the United States?

Accepted Answer

Desktop computers in the workplace are not considered infrastructure; infrastructure typically refers to fundamental facilities and systems serving a country, city, or area, such as transportation and communication systems, power plants, and schools.

Question 6

Infrastructure is:

Accepted Answer

Infrastructure refers to a country's public capital, such as roads, bridges, airports, and communication systems, which are essential for economic growth and development. While private companies may provide some infrastructure, such as toll roads or private airports, it is generally the responsibility of the government to invest in and maintain the country's infrastructure. In a market-based economy, infrastructure is important because it facilitates the efficient flow of goods, services, and capital, which is necessary for businesses to operate effectively and consumers to access goods and services.

Question 7

The single largest consumer of goods and services in the United States is:

Accepted Answer

The answer of The single largest consumer of goods and...

Question 8

Government funding of Los Alamos National Labs is an example of government acting in its role to promote economic growth by:

Accepted Answer

Government funding of Los Alamos National Labs enhances physical and human capital by investing in research and development, which can lead to technological advancements and skilled workforce development.

Question 9

The use of tax receipts to modernize the air traffic control system promotes economic growth by:

Accepted Answer

Modernizing the air traffic control system involves investing in physical and human capital, such as new technology and training for air traffic controllers. This investment can lead to increased efficiency and safety in air travel, which can stimulate economic growth.

Question 10

Which is NOT an example of infrastructure?

Accepted Answer

Infrastructure refers to physical structures and facilities that support the functioning of society, such as roads, bridges, and public transportation systems. Walmart stores are commercial buildings and do not fall under the category of infrastructure.

Question 11

The absence of well-defined and enforceable property rights often:

Accepted Answer

When property rights are not well-defined or enforceable, it creates uncertainty and risk for potential investors, who may be hesitant to use their capital as collateral. This, in turn, can inhibit investment and slow economic growth.

Question 12

When the government records a deed showing that ownership of a piece of property has passed from one party to another, it is acting in its role to promote economic growth by:

Accepted Answer

By ensuring a stable legal system, the government is facilitating the transfer of ownership of property from one party to another, which promotes economic growth by encouraging investment in real estate and other assets. This also helps to ensure that property rights are protected, which is essential for attracting investment and promoting economic development. Providing physical and human capital, ensuring a stable and secure financial system, and promoting free and competitive markets are all also important roles of government in promoting economic growth, but in this particular scenario, ensuring a stable legal system is the best choice.

Question 13

The government decides to give tax-exempt status to a new organization whose mission is to award college scholarships to members of the armed forces. In doing so, the government is acting in its role to promote economic growth by:

Accepted Answer

By providing tax-exempt status to an organization that offers college scholarships to members of the armed forces, the government is promoting economic growth by enhancing human capital. This is because higher education leads to skills and knowledge that can ultimately lead to increased productivity and economic growth.

Question 14

Infrastructure is defined as a country's:

Accepted Answer

Infrastructure refers to the physical and organizational structures and facilities that form the basis for economic activity, such as roads, bridges, ports, and public transportation systems. These structures and facilities are typically owned or operated by the public sector and are essential for economic growth and development.

Question 15

When the government funds Head Start, it is acting in its role to promote economic growth by:

Accepted Answer

Head Start is a program that focuses on early childhood education, which enhances human capital by improving skills and knowledge, contributing to economic growth.

Question 16

Excessive inflation or deflation:

Accepted Answer

Excessive inflation or deflation disrupts the price mechanism and leads to market disequilibrium, causing economic instability and inefficiency. It can lead to uncertain business conditions, discouraging investments, creating inflationary expectations, and reducing the value of money, among other effects. Therefore, governments and central banks try to maintain stable prices to ensure sustainable and stable economic growth.

Question 17

When the government enforces contracts between two parties, it is acting in its role to promote economic growth by:

Accepted Answer

Enforcing contracts between two parties is one of the most important functions of a stable legal system. This ensures that people and businesses can enter into agreements and have confidence that those agreements will be enforced. This promotes economic growth by providing people with the security they need to engage in commerce and invest in their businesses.

Question 18

The government decides to subsidize the development of a new communications network. It is acting in its role to promote economic growth by:

Accepted Answer

By subsidizing the development of a new communications network, the government is enhancing physical and human capital, which will ultimately promote economic growth. This infrastructure project will encourage investment and business development, leading to job creation and increased productivity.

Question 19

Property rights consist of _____ goods that _____ be easily measured.

Accepted Answer

Property rights often involve intangible goods, such as intellectual property, which cannot be easily measured.

Question 20

Which is NOT a characteristic of a stable financial system?

Accepted Answer

Unanticipated high inflation is not a characteristic of a stable financial system as it can lead to uncertainty and disrupt economic stability.

Quiz 7: Economic Growth