Question 1

Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can
A) increase infant mortality.
B) increase standards of living.
C) increase the level of poverty.
D) lower life expectancy.

Accepted Answer

Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can increase standards of living by generating more jobs, raising incomes, and improving access to healthcare and education. This can lead to an overall improvement in the quality of life for individuals in the economy. None of the other options are necessarily true - increasing GDP per capita is not directly linked to infant mortality, poverty, or life expectancy.

Question 2

Over the past 50 years, deaths among children have
A) declined in most high-income countries and have risen in most low-income countries.
B) declined in nearly all countries, including most low-income countries.
C) remained relatively unchanged in most high-income countries and have declined in most low-income countries.
D) declined in most high-income countries and have remained relatively unchanged in most low-income countries.

Accepted Answer

According to the information given, deaths among children have declined in nearly all countries, including most low-income countries, in the past 50 years.

Question 3

Suppose that in 2018, real GDP grew in Estonia by 3% and the population increased by 5%. Therefore, in 2018, Estonia experienced
A) economic growth, but not an increase in living standards.
B) economic growth and an increase in living standards.
C) no economic growth, but an increase in living standards.
D) no economic growth and no increase in living standards.

Accepted Answer

Economic growth is measured by changes in real GDP, which increased by 3%. However, an increase in population may lead to a decrease in living standards if the growth in income or output does not keep up with population growth. Therefore, there was economic growth, but it did not necessarily lead to an increase in living standards for individuals in Estonia.

Question 4

Table 22-1
 
-Refer to Table 22-1. Based on the table above, which country has a higher standard of living and why?
A) Sweden has a higher standard of living because their GDP is higher.
B) Ireland has a higher standard of living because their GDP per capita is higher.
C) Sweden has a higher standard of living because their GDP per capita is higher.
D) Ireland has a higher standard of living because growth in GDP is greater in Ireland than in Sweden.

Accepted Answer

GDP per capita is a better measure of standard of living than total GDP, and Ireland has a higher GDP per capita.

Question 5

The Industrial Revolution began in
A) England around 1750.
B) the United States around 1820.
C) France around 1680.
D) Germany around 1780.

Accepted Answer

The Industrial Revolution is widely accepted to have started in England around the mid-18th century or 1750. This period was marked by significant advances in textile manufacturing and steam power, which led to increased production and economic growth. While other countries such as the United States and Germany would later experience their own industrial revolutions, England is widely considered to be the birthplace of the movement.

Question 6

If real GDP per capita in the United States is $8,000 in 2018, and if real GDP per capita is $12,000 in 2028, what is the total percent change in the growth rate of GDP per capita between 2018 and 2028?
A) 3.33%
B) 5%
C) 33%
D) 50%

Accepted Answer

The total percent change in the growth rate of GDP per capita from $8,000 to $12,000 is calculated as (($12,000 - $8,000) / $8,000) * 100 = 50%.

Question 7

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.
A) Real GDP per capita in the United States will always be 1.9% higher than real GDP per capita in Bolivia.
B) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will shrink over time.
C) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will increase over time.
D) The difference between the level of real GDP per capita in the United States and real GDP per capita in Bolivia will always be $1.9 trillion.

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 8

Which of the following accurately describes the economic growth and standards of living between 1,000,000 B.C. and 1300 A.D.?
A) Standards of living in 1300 A.D. were substantially better than what they were in 1,000,000 B.C.
B) Standards of living substantially declined from 1,000,000 B.C. to 1300 A.D.
C) Significant economic growth took place between 1,000,000 B.C. and 1300 A.D.
D) No sustained economic growth occurred between 1,000,000 B.C. and 1300 A.D.

Accepted Answer

The period between 1,000,000 B.C. and 1300 A.D. covers a vast amount of time and includes prehistoric times, ancient civilizations, and the Middle Ages. While there were advances in technology and agriculture during this time, there was no sustained economic growth across the entire period. In fact, there were many instances of economic decline, such as the fall of civilizations, the Black Death, and famines in various regions. Therefore, option D is the most accurate.

Question 9

According to Douglass North, the Industrial Revolution occurred in England because
A) the British Parliament took control of the government and could credibly commit to upholding property rights.
B) the British monarchy took control of the government and pledged not to raise taxes arbitrarily.
C) the British courts became tied to the king and began to refuse to enforce property rights.
D) the British Parliament instituted a command economy structure and implemented a planned economy.

Accepted Answer

According to Douglass North, the Industrial Revolution occurred in England because the British Parliament took control of the government and could credibly commit to upholding property rights. This created a stable environment for investment and entrepreneurship, leading to the development of new technologies and industries.

Question 10

The rapid growth of the Chinese economy should
A) benefit U.S. consumers as they have access to less-expensive consumer goods.
B) make it more difficult for citizens of the United States to find jobs.
C) not affect the mix of jobs available to citizens of the United States.
D) A and B

Accepted Answer

The rapid growth of the Chinese economy should benefit U.S. consumers as they have access to less-expensive consumer goods. However, it may also make it more difficult for U.S. industries to compete and result in the loss of some jobs.

Question 11

If a country's real GDP is rising by 2% per year while its population is rising at 7% per year, which of the following is true?
A) The country's standard of living is falling.
B) The country's standard of living is rising.
C) Growth in nominal GDP outweighs growth in the population.
D) Growth in nominal GDP is less than the growth in the population.

Accepted Answer

Even though the real GDP of the country is rising, the growth rate of the population is higher. This means that the increase in output is not enough to keep up with the growing population. Therefore, the country's standard of living is falling.

Question 12

Table 22-1
 
-According to the World Bank, in 2016, China's GDP was approximately $11.2 trillion (or $11,200 billion). That same year, India's GDP was approximately $2.3 trillion (or $2,300 billion). With which of the following populations would India's standard of living have been considered higher than China's that year?
A) China's population = 1.3 billion; India's population = 1.1 billion
B) China's population = 8.3 billion; India's population = 1.1 billion
C) China's population = 500 million; India's population = 125 million
D) China's population = 3.5 billion; India's population = 1.1 billion

Accepted Answer

The answer of Table 22-1
 
-According to the World Bank,...

Question 13

One reason that Mexico has experienced relatively low rates of economic growth is that
A) there is a shortage of low-skilled labor to fill manufacturing jobs.
B) the government has a history of nationalizing all successful domestically-owned industries.
C) the country has problems with organized crime and corruption.
D) incentives from its neighboring Central American countries has attracted most of the foreign investment in the region.

Accepted Answer

Mexico has struggled with issues of organized crime and corruption, which have hindered economic growth by deterring foreign investment and undermining the rule of law. These problems have also made it difficult for businesses to operate and expand within the country.

Question 14

Growth in real GDP per capita for the world economy was greatest during
A) the seventeenth century.
B) the eighteenth century.
C) the nineteenth century.
D) the twentieth century.

Accepted Answer

The twentieth century saw the greatest growth in real GDP per capita for the world economy, largely due to advancements in technology and globalization.

Question 15

The best measure of a country's standard of living is
A) real GDP per labor hour.
B) real GDP per unit of capital.
C) real GDP per capita.
D) total nominal GDP.

Accepted Answer

Real GDP per capita is the most comprehensive measure of a country's standard of living as it takes into account the total output of goods and services in the economy divided by the population. This accounts for income inequality and is a better indicator than just measuring total output (nominal GDP) or output per unit of labor or capital.

Question 16

If real GDP per capita in the United States is $8,000 in 2018, and if real GDP per capita is $12,000 in 2028, what is the approximate average annual percent change in the growth rate of GDP per capita between 2018 and 2028?
A) 3.33%
B) 5%
C) 33%
D) 50%

Accepted Answer

We can use the formula for the average annual percent change in growth rate:

[(Ending value / Beginning value) ^ (1 / Number of years)] - 1

Plugging in the given values, we get:

[($12,000 / $8,000) ^ (1 / 10)] - 1

Simplifying:

(1.5 ^ 0.1) - 1

= 0.048 or 4.8%

Rounding to the nearest whole number, the approximate average annual percent change is 5%. Therefore, the best choice is B.

Question 17

Significant economic growth did not begin in the world until
A) 1000 A.D.
B) 1750 A.D.
C) 1820 A.D.
D) the 20th century A.D.

Accepted Answer

This time period marked the beginning of the Industrial Revolution in Great Britain, which greatly increased productivity and economic growth through the use of new technologies and advancements in manufacturing. Prior to this time, economic growth was limited and slow.

Question 18

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%?
A) $8,520
B) $9,280
C) $9,365
D) $10,560

Accepted Answer

Using the formula for compound interest: 
FV = PV x (1 + r)^n 
where FV = future value 
PV = present value 
r = annual interest rate as a decimal 
n = number of years

In this case, 
PV = $8,000 
r = 3.2% = 0.032 
n = 5

FV = $8,000 x (1 + 0.032)^5 
FV = $8,000 x 1.16532 
FV = $9,322.56

Rounding to the nearest dollar, the answer is C: $9,365.

Question 19

The period of time from 1,000,000 B.C. to 1300 A.D. was a period of
A) no sustained economic growth.
B) slow and steady economic growth.
C) moderate economic growth.
D) rapid and sustained economic growth.

Accepted Answer

This period is often referred to as the pre-modern era and was characterized by a lack of sustained economic growth, with economies mostly relying on subsistence farming and primitive forms of trade. There were some exceptions, such as the rise of civilizations in certain parts of the world, but overall, economic growth was slow and inconsistent.

Question 20

If real GDP per capita in Ireland is estimated to be $7,400 in 2018, what will real GDP per capita be in 2023 if real GDP per capita grows at an annual rate of 2.8%?
A) $7,607
B) $8,496
C) $9,472
D) $20,720

Accepted Answer

To calculate the real GDP per capita in 2023, we use the formula:

Real GDP per capita in 2023 = Real GDP per capita in 2018 x (1 + annual growth rate) ^ number of years

Plugging in the given values, we get:

Real GDP per capita in 2023 = $7,400 x (1 + 0.028) ^ 5
Real GDP per capita in 2023 = $7,400 x 1.1529
Real GDP per capita in 2023 = $8,496

Therefore, the answer is B.

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

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

Over the past 50 years, deaths among children have

Suppose that in 2018, real GDP grew in Estonia by 3% and the population increased by 5%. Therefore, in 2018, Estonia experienced

Table 22-1 -Refer to Table 22-1. Based on the table above, which country has a higher standard of living and why?

The Industrial Revolution began in

If real GDP per capita in the United States is $8,000 in 2018, and if real GDP per capita is $12,000 in 2028, what is the total percent change in the growth rate of GDP per capita between 2018 and 2028?

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

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

The rapid growth of the Chinese economy should

If a country's real GDP is rising by 2% per year while its population is rising at 7% per year, which of the following is true?

One reason that Mexico has experienced relatively low rates of economic growth is that

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

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

If real GDP per capita in the United States is $8,000 in 2018, and if real GDP per capita is $12,000 in 2028, what is the approximate average annual percent change in the growth rate of GDP per capita between 2018 and 2028?

Significant economic growth did not begin in the world until

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%?

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

If real GDP per capita in Ireland is estimated to be $7,400 in 2018, what will real GDP per capita be in 2023 if real GDP per capita grows at an annual rate of 2.8%?