Question 1

Compared to those in low-income countries, the residents of countries with high per person incomes nearly always

Accepted Answer

Countries with high per person incomes tend to have better healthcare, education, and overall living standards, which contribute to longer life expectancies, lower illiteracy rates, and lower infant mortality rates.

Question 2

Countries that have adopted liberal reforms and substantially increased their economic freedom rating in recent years

Accepted Answer

Countries that have adopted liberal reforms and increased their economic freedom rating have achieved impressive growth rates of real GDP per person during 1995-2009. This is because liberal reforms, including free trade, deregulation, and privatization, have been associated with economic growth and development. As a result, these countries have seen an increase in foreign investment and trade, leading to higher incomes and increased economic activity.

Question 3

During 1980-2009, the countries achieving the most rapid growth of real GDP were nearly all

Accepted Answer

During this period, the most rapid growth of real GDP was achieved by low-income less developed economies at the beginning of the period, such as China, India, and several Southeast Asian economies. High-income developed economies and European economies did not experience such rapid growth, while South American and African economies had mixed performance.

Question 4

In order to achieve a high economic freedom rating, a country must

Accepted Answer

Economic freedom is based on the protection of property rights, enforcement of contracts, and market-based allocation of goods and services. It does not involve providing citizens with free basic goods or promoting income equality through redistribution. While democratic elections may be important for political freedom, they are not directly related to economic freedom ratings.

Question 5

For most less-developed countries, the proven technologies of the high-income countries are readily available. Why hasn't this always led to economic growth for these low-income countries?

Accepted Answer

The answer of For most less-developed countries, the proven technologies...

Question 6

How do growth rates vary across countries? Are the rich countries getting richer while the poor are getting poorer?

Accepted Answer

The answer of How do growth rates vary across countries?...

Question 7

In the absence of an even-handed legal system, high transaction costs will eliminate many potential mutually advantageous trades and the accompanying gains from

Accepted Answer

Without an even-handed legal system, high transaction costs will limit many trades and gains that could have been achieved through division of labor and specialization, expansion in the size of the market, and economies of scale resulting from use of mass production methods. Therefore, all of the above options are the best choices.

Question 8

Which of the following countries have liberalized their economies and substantially improved their economic freedom rating since 1990?

Accepted Answer

Estonia and India have both undertaken significant economic reforms and improved their economic freedom ratings since 1990. Argentina and Brazil have had mixed progress in this area and have faced some setbacks in recent years, while Zimbabwe and the Republic of Congo have struggled with political instability and poor economic policies. Italy and France have made some efforts to address economic issues, but have not undergone significant liberalization.

Question 9

What is the Economic Freedom of the World index designed to measure? What will determine whether the rating of a country will be high or low on this index?

Accepted Answer

The answer of What is the Economic Freedom of the...

Question 10

From the viewpoint of economic growth, why is the legal structure of a country crucially important? What are some of the key attributes of a legal system that will encourage economic growth?

Accepted Answer

The answer of From the viewpoint of economic growth, why...

Question 11

Which of the following about economic freedom is true?

Accepted Answer

This statement is supported by studies showing that countries with higher economic freedom scores have higher rates of economic growth. Additionally, examples of countries like China and India show that adopting policies that promote economic freedom can lead to rapid economic growth.

Question 12

How does investment as a share of GDP in countries with more economic freedom compare with economies that are less free? How does the productivity of investment in the freer economies compare with its productivity in the less free economies? How will this influence differences in growth rates and income levels? Explain.

Accepted Answer

The answer of How does investment as a share of...

Question 13

What are some of the key economic factors that characterize countries with poor growth records?

Accepted Answer

The answer of What are some of the key economic...

Question 14

Which of the following economies have the highest degree of economic freedom?

Accepted Answer

According to the 2021 Index of Economic Freedom by The Heritage Foundation, Hong Kong and Singapore rank as the first and second freest economies in the world respectively. They both have high scores in areas like property rights protection, low taxes, and regulatory efficiency, which make them attractive destinations for business and investment. Argentina and Brazil, on the other hand, have relatively low scores and are ranked 152nd and 140th respectively, while Germany and Italy are ranked 29th and 74th, and Russia and Nigeria are ranked 89th and 116th.

Question 15

Countries that have a higher degree of economic freedom tend to

Accepted Answer

Countries that have a higher degree of economic freedom tend to invest a larger share of their output, and the productivity of that investment is higher than for economies that are less free. This is because economic freedom allows for a more efficient allocation of resources and encourages entrepreneurship, innovation, and competition, which leads to higher productivity and economic growth.

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