Question 1

Which of the following about economic growth is true?

Accepted Answer

Option A is incorrect as there is evidence to suggest that some poor countries are gradually improving their economic conditions. Option B is incorrect as some LDCs such as China and India have achieved higher growth rates than the United States. Option D is incorrect as some of the fastest-growing countries in the world, such as China and India, are not high-income industrial economies. Option C is the correct choice as it acknowledges the diversity of growth patterns among LDCs, with some countries growing rapidly while others continue to stagnate.

Question 2

One-third of the world's population live in China and India. How did the growth rate of these two countries compare with the growth of high income industrial countries during 1980-2014?

Accepted Answer

According to the World Bank data, during the period 1980-2014, the annual average GDP growth rate in China and India was around 9% and 6%, respectively, while in high income industrial countries it was around 2.3%. Therefore, per capita GDP increased more rapidly in China and India than in the high income industrial countries.

Question 3

During the past three decades, the economic freedom gap between high and low income countries has _______ and per capita income has grown ______ in high income than low income countries. (Fill in the two blanks)

Accepted Answer

The answer of During the past three decades, the economic...

Question 4

Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on

Accepted Answer

The presence of institutions and policies consistent with economic freedom, such as protection of property rights, free trade, and limited government intervention, creates an environment that encourages entrepreneurship and investment, and facilitates gains from trade. Competitive elections and political democracy may also be important, but they are not the sole determinant of economic growth and development. The use of tariffs and quotas may protect domestic businesses in the short run, but they also reduce competition and productivity, and may harm consumers through higher prices and reduced choice. The use of government planning is often inefficient and may lead to misallocation of resources.

Question 5

Which of the following is true regarding the growth record of less-developed countries (LDC's) during the past quarter of a century?

Accepted Answer

The growth record of LDC's in the past quarter of a century has varied widely. Some countries have achieved significant growth rates and are among the fastest growing countries in the world, while others have experienced slow economic growth. Additionally, some LDC's have even experienced declining per capita income levels, making all of the statements in choices A, B, and C true.

Question 6

The Economic Freedom of the World index is a measure of the consistency of a nation's institutions and policies with

Accepted Answer

The Economic Freedom of the World index is a measure of a nation's adherence to principles of economic freedom, such as free trade, property rights, and low taxes. It is not a measure of political democracy, income distribution, or economic nationalism.

Question 7

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

Accepted Answer

Option A is true as several African countries are still struggling with poverty and their per capita GDP has either remained stagnant or declined over the years. Option B is false as some LDCs, such as China and India, have seen significant economic growth and have even surpassed the per capita income growth rate of the United States in recent years. Option C is also true as many LDCs, particularly those in Southeast Asia, have experienced rapid economic growth in the past two decades with annual real growth rates of 3.5 percent or more. Therefore, options A and C are correct, making option D the best choice.

Question 8

The adoption of modern technologies and business methods have the possibility to improve economic performance in a nation with low per capita income and low growth, but only if

Accepted Answer

Without sound institutions, the benefits of modern technologies and business methods will not be fully realized as capital and entrepreneurial activity will be deterred. Natural resources, worker education, and government planning are important factors as well, but institutions are the key to attracting capital and creating an environment for economic growth.

Question 9

During 1980-2014, the per-capita incomes of less-developed countries (LDCs)

Accepted Answer

During 1980-2014, some less-developed countries experienced rapid economic growth and increases in per-capita income, while others faced stagnation or decline, leading to a mixed growth record overall.

Question 10

Which of the following about economic growth is true?

Accepted Answer

Most of the countries with the highest growth rates in the last 25 years were LDCs in 1980, and it is an oversimplification to categorize the world strictly into growing developed nations and stagnating less-developed nations.

Question 11

Regarding economic growth, which of the following is true?

Accepted Answer

During 1980 through 2005, the fastest growing countries in the world were mostly LDCs. This is supported by data showing that many low and middle-income countries experienced significant economic growth during this period.

Question 12

During 1980 through 2014,

Accepted Answer

During this period, many less developed countries (LDCs), particularly in Asia, experienced rapid economic growth, outpacing the growth rates of high-income industrial countries.

Question 13

How did the world's per capita income and the degree of income inequality change between 1800 and  1980?

Accepted Answer

Between 1800 and 1980, the world saw a significant increase in per capita income due to industrialization and economic growth, but income inequality also increased as wealth was not evenly distributed across different regions and populations.

Question 14

Which of the following about economic growth is true?

Accepted Answer

Less developed countries often experience higher growth rates as they catch up, while many slow-growing or declining economies are also less developed.

Question 15

Since 1980, economic freedom has increased  _______  in less developed countries than in high-income developed nations and the per capita income of less developed countries has grown  _____ than in the high-income developed countries. (Fill in the blanks)

Accepted Answer

This answer is supported by data from the Economic Freedom of the World report, which has found that on average, less developed countries have seen a greater increase in economic freedom since 1980 compared to high-income developed nations. Additionally, per capita income in less developed countries has grown more rapidly than in high-income developed countries during this time period.

Question 16

What has happened to income inequality and the poverty rate of the world since 1980?

Accepted Answer

The answer of What has happened to income inequality and...

Question 17

What has happened to per capita income and the degree of income inequality of the world during the past three decades?

Accepted Answer

The answer of What has happened to per capita income...

Question 18

According to data on GDP growth between 1980 and 2014,

Accepted Answer

The passage states that "many poor nations grew more rapidly than wealthy nations, while others continued to stagnate," indicating that there was variation in growth rates among both poor and wealthy nations. It does not state that poor nations universally grew rapidly while wealthy nations stagnated, nor does it indicate that most rapidly growing countries were in Africa.

Question 19

In order to achieve a high rating on the Economic Freedom of the World index, a country must

Accepted Answer

The Economic Freedom of the World Index measures the degree to which the policies and institutions of countries are supportive of economic freedom. Economic freedom is defined as the ability of individuals to control their own labor and property. Countries that score high on the index provide for the even-handed protection of private property and rely primarily on open markets and voluntary exchange to coordinate economic activity. This promotes economic growth, prosperity, and poverty reduction. Therefore, Choice A is the best option.

Question 20

Some low-income countries generally remain poor because

Accepted Answer

Institutional arrangements and policies that discourage productive activity and reduce the potential gains from specialization and exchange can hinder economic growth and development. These policies may include corruption, high taxes, excessive regulation, and lack of property rights. Even if a country has abundant natural resources or low-wage labor, such policies can prevent it from reaping the benefits of these advantages and remaining poor.

Quiz 17: Institutions, Policies, and Cross-Country Differences in Income and Growth

Which of the following about economic growth is true?

One-third of the world's population live in China and India. How did the growth rate of these two countries compare with the growth of high income industrial countries during 1980-2014?

During the past three decades, the economic freedom gap between high and low income countries has _ and per capita income has grown in high income than low income countries. (Fill in the two blanks)

Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on

Which of the following is true regarding the growth record of less-developed countries (LDC's) during the past quarter of a century?

The Economic Freedom of the World index is a measure of the consistency of a nation's institutions and policies with

Which of the following is true concerning the growth record of less developed countries (LDCs) during the last several decades?

The adoption of modern technologies and business methods have the possibility to improve economic performance in a nation with low per capita income and low growth, but only if

During 1980-2014, the per-capita incomes of less-developed countries (LDCs)

Which of the following about economic growth is true?

Regarding economic growth, which of the following is true?

During 1980 through 2014,

How did the world's per capita income and the degree of income inequality change between 1800 and 1980?

Which of the following about economic growth is true?

Since 1980, economic freedom has increased ___ in less developed countries than in high-income developed nations and the per capita income of less developed countries has grown _ than in the high-income developed countries. (Fill in the blanks)

What has happened to income inequality and the poverty rate of the world since 1980?

What has happened to per capita income and the degree of income inequality of the world during the past three decades?

According to data on GDP growth between 1980 and 2014,

In order to achieve a high rating on the Economic Freedom of the World index, a country must

Some low-income countries generally remain poor because