Question 1

The experience of Ireland in the last four decades indicates that in order to achieve high rates of economic growth countries must

Accepted Answer

The experience of Ireland indicates that countries must restrain government growth, keep taxes low, remove trade barriers, and follow a monetary policy consistent with price stability in order to achieve high rates of economic growth. This approach is consistent with the principles of free-market economics, which emphasizes the importance of private enterprise and competition in driving economic growth. Ireland's success also highlights the importance of investing in human capital, innovation, and technology as drivers of economic growth. Holding free elections and obtaining financial aid from foreign governments may be important for democratic governance and short-term relief, but they are not sufficient conditions for sustained economic growth. Maintaining a high government expenditure/GDP ratio may be beneficial for social welfare, but it can also lead to inefficiency and crowding out of private investment.

Question 2

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 3

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 4

Which of the following is true?

Accepted Answer

Option B is correct because economic freedom ratings do indeed indicate the extent to which a nation's policies and institutions align with the principles of personal choice, freedom of exchange, and protection of private property. Option A is incorrect because political democracy does not necessarily guarantee economic freedom. Option C is incorrect because data shows that high levels of economic freedom are associated with higher rates of economic growth.

Question 5

High income countries with larger governments as a share of GDP have generally

Accepted Answer

Studies have shown that high income countries with larger governments tend to have slower rates of economic growth compared to those with smaller governments. This can be attributed to factors such as higher taxes, greater regulation, and reduced incentives for entrepreneurship and investment. Therefore, choice A is the correct answer.

Question 6

Which of the following economies is most economically free?

Accepted Answer

Hong Kong consistently ranks as one of the most economically free countries in the world according to the Index of Economic Freedom. It has a low tax rate, open trade, and a competitive business and investment environment. In contrast, Russia, Algeria, and Myanmar have more government intervention and regulation in their economies, resulting in less economic freedom.

Question 7

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

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Question 8

The growth records of Japan and Hong Kong during the last fifty years indicate that an economy can grow rapidly without

Accepted Answer

Both Japan and Hong Kong have limited domestic natural resources, yet they were able to grow rapidly over the last fifty years. This implies that having abundant natural resources is not necessary for rapid economic growth.

Question 9

Some low-income countries generally remain poor because

Accepted Answer

Institutional arrangements and policies play a significant role in discouraging productive activities and reducing the potential gains from specialization and exchange in low-income countries. These arrangements and policies can include corruption, lack of property rights, and inadequate infrastructure. This hinders the growth of the economy and makes it difficult for low-income countries to escape poverty traps. Additionally, factors such as lack of education and healthcare, high levels of inequality, and limited access to finance and technology also contribute to the persistent poverty in these countries.

Question 10

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

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Question 11

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

Accepted Answer

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Question 12

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 of...

Question 13

Which of the following is true?

Accepted Answer

Option B is correct as it accurately describes what economic freedom ratings measure. Options A and C are incorrect. Economic freedom is not ensured by being a political democracy, and highly free economies tend to grow more rapidly than those with less economic freedom.

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

The experience of Ireland in the last four decades indicates that in order to achieve high rates of economic growth countries must

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

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?

Which of the following is true?

High income countries with larger governments as a share of GDP have generally

Which of the following economies is most economically free?

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?

The growth records of Japan and Hong Kong during the last fifty years indicate that an economy can grow rapidly without

Some low-income countries generally remain poor because

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

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?

Which of the following is true?