Question 1

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

Accepted Answer

This is a trend that has been observed in recent years, with countries such as China, India, and Brazil experiencing rapid economic growth and closing the gap with traditional high-income countries like the United States, Japan, and Western European nations. However, there are still significant disparities in income and standards of living between these groups of countries.

Question 2

From 1990-2010,productivity growth in the United States was ________ the growth rates of other high-income countries.
A) greater than
B) less than
C) equal to
D) greater than for the first 15 years, then less than

Accepted Answer

During the period from 1990 to 2010, the United States experienced higher productivity growth compared to other high-income countries, largely due to advancements in technology and increased efficiency in various sectors.

Question 3

Between 1990 and 2010,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?
A) the United States
B) Germany
C) Japan
D) Canada

Accepted Answer

According to the World Bank data, between 1990 and 2010, the United States had the highest average annual growth rate in GDP per capita among these four countries, with an average growth rate of 1.3%. Germany had an average growth rate of 0.8%, Japan had an average growth rate of 0.7%, and Canada had an average growth rate of 0.6%.

Question 4

Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and
A) overpopulation.
B) low saving and investment.
C) a low import/export ratio.
D) low government spending.

Accepted Answer

Foreign direct investment is an important source of external financing for developing countries. The decline in foreign direct investment can make it more difficult for these countries to increase their savings and investments, which are crucial for economic growth. This can lead to a vicious cycle of low economic growth, low savings, and low investment. Low government spending, overpopulation, and a low import/export ratio may also affect economic growth, but they are not directly related to foreign direct investment.

Question 5

Relative to productivity growth in the United States,which of the following countries experienced the largest decline in productivity growth from 1990 to 2010?
A) Canada
B) Japan
C) Germany
D) the United Kingdom

Accepted Answer

Japan experienced the largest decline in productivity growth from 1990 to 2010 among the given countries. According to data from the Conference Board, Japan's productivity growth declined from 3.3% in 1990-2000 to 0.6% in 2000-2010. Canada's productivity growth declined from 1.1% to 0.8%, Germany's productivity growth declined from 2.2% to 1.1%, and the United Kingdom's productivity growth declined from 2.3% to 0.6%.

Question 6

Would you expect to see higher or lower growth rates for countries that start out with a relatively low level of real GDP per capita? Explain using the concept of "catch-up" and support your answer with a graph.

Accepted Answer

The answer of Would you expect to see higher or...

Question 7

By offering more generous unemployment insurance programs,European countries can expect
A) to pay less in taxes than in the United States.
B) workers to gain new skills quickly in response to fluctuations in the labor market.
C) shorter periods of unemployment for their workers.
D) longer periods of unemployment for their workers.

Accepted Answer

More generous unemployment insurance programs can lead to longer periods of unemployment for workers because they reduce the urgency for unemployed individuals to find new jobs quickly. This is because the financial support provided allows them to take more time in searching for a job that better matches their skills or preferences.

Question 8

Productivity gains in the United States since 1990 have been ________ productivity gains in other leading industrial nations.
A) the same as
B) lower than
C) higher than
D) more variable than

Accepted Answer

According to the sentence, productivity gains in the United States since 1990 have been higher than productivity gains in other leading industrial nations.

Question 9

Draw a graph of "catch-up" that shows where you would expect to see a country with low saving rates and low levels of health and education.How would you expect real GDP per capita to grow in a country like this? Explain.

Accepted Answer

The answer of Draw a graph of "catch-up" that shows...

Question 10

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by
A) reducing physical capital.
B) reducing human capital.
C) increasing labor productivity.
D) increasing technological change.

Accepted Answer

Disease, poor nutrition, and substandard health care can have a direct impact on the health of individuals, which in turn affects their ability to work and be productive. This leads to a reduction in human capital, which is a key factor in economic growth. Human capital refers to the skills, knowledge, and experience that individuals possess and can contribute to the economy. When human capital is reduced, it can lead to lower productivity, higher absenteeism, and increased health care costs, all of which can hamper economic growth.

Question 11

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009.This means that
A) people or firms in other countries reduced their purchases of stocks and bonds in the United States by 42 percent in the first quarter of 2009.
B) people or firms in the United States reduced their purchases of stocks and bonds in foreign countries by 42 percent in the first quarter of 2009.
C) people or firms in other countries reduced their building of facilities of purchases of facilities in the United States by 42 percent in the first quarter of 2009.
D) people or firms in the United States reduced their building of facilities or purchases of facilities in foreign countries by 42 percent in the first quarter of 2009.

Accepted Answer

Foreign direct investment refers to the building of facilities or purchases of facilities in a foreign country by people or firms from another country. Therefore, option C is the correct choice as it states that people or firms in other countries reduced their building of facilities or purchases of facilities in the United States by 42 percent in the first quarter of 2009. Options A and B refer to purchases of stocks and bonds, which do not fall under the category of foreign direct investment. Option D refers to people or firms from the United States building or purchasing facilities in foreign countries, which is not relevant to the given information.

Question 12

One reason why many low-income countries experience low rates of growth is because of low rates of saving and investment in those countries.

Accepted Answer

Saving and investment are key drivers of economic growth, as they provide the necessary funds for investment in new businesses, infrastructure, and technology. Low-income countries often struggle with low rates of saving due to a variety of factors such as low incomes, lack of access to financial services, and cultural attitudes towards saving. As a result, they may also have lower rates of investment, which can limit their potential for economic growth.

Question 13

The term "brain drain" refers to
A) highly educated individuals who leave developing countries for high-income countries.
B) the diminishing returns to studying for an exam.
C) the negative impact on brain function of an individual's overinvestment in human capital.
D) the decreased quality of the college-educated workforce.

Accepted Answer

Brain drain refers to the emigration of highly educated or skilled individuals from developing countries to high-income countries. This often results in a loss of talent and potential for the developing countries as individuals who could contribute to the growth and development of their home country instead contribute to the economy and society of another country.

Question 14

The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.

Accepted Answer

The answer of The developing countries have been catching up...

Question 15

Enforcing property rights in an economy will
A) cause the market system to work less efficiently.
B) decrease the level of foreign portfolio investment.
C) encourage corruption and expand the underground economy.
D) raise the level of investment.

Accepted Answer

Enforcing property rights provides incentives for individuals to invest in and improve their property. This leads to increased investment, which can lead to economic growth and increased productivity.

Question 16

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?
A) Even when entrepreneurs cannot secure sufficient funding for projects from banks, venture capital firms may be willing to lend money.
B) The level of legal protection for investors in the United States is relatively low.
C) Because the financial market in the United States is so large, the quantity of trading in corporate stocks and bonds makes those investments less liquid.
D) Banks in the United States are more willing to take on risk because the government guarantees each bank cannot lose more than $100,000 on any given loan that defaults.

Accepted Answer

Venture capital firms in the United States are more willing to invest in risky, innovative projects that banks may be hesitant to finance. This can encourage technological progress as entrepreneurs have access to the necessary funding to develop and bring new innovations to market.

Question 17

All of the following policies are ways for a country to promote long-run economic growth except
A) increasing vaccinations against infectious diseases.
B) undergoing political reform to decrease corruption.
C) enacting stronger laws to protect property rights.
D) imposing stricter regulations to limit foreign direct investment.

Accepted Answer

Imposing stricter regulations to limit foreign direct investment could actually hinder long-run economic growth by limiting the country's access to capital, technology, and expertise from foreign investors. The other policies listed (increasing vaccinations, political reform, and property rights protection) are all measures that can contribute to long-run economic growth by improving public health, reducing corruption, and creating a more favorable investment climate.

Question 18

Table 22-2
 
-Refer to Table 22-2.Consider the statistics in the table above in describing the industrialized countries.Are these consistent with the economic growth model? Briefly explain.

Accepted Answer

The answer of Table 22-2
 
-Refer to Table 22-2.Consider the...

Question 19

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?
A) There are fewer government regulations in the United States regarding the way firms can hire and fire workers.
B) The financial systems of foreign countries are generally more efficient than those in the United States.
C) European countries have more flexible policies regarding the number of hours employees are permitted to work.
D) Job mobility in the United States is more restricted than it is in many foreign countries.

Accepted Answer

The fewer government regulations regarding employee hiring and firing in the United States allow firms to easily adjust their workforce and allocate resources efficiently, leading to greater productivity growth compared to other countries with more restrictive regulations.

Question 20

The opportunity cost of being unemployed tends to be the highest in which of the following countries?
A) Canada
B) the United States
C) France
D) the United Kingdom

Accepted Answer

The opportunity cost of being unemployed is generally highest in the United States due to its relatively limited social welfare benefits compared to countries like Canada, France, and the United Kingdom, which have more comprehensive social safety nets. This means that the loss of income from not working is not as mitigated by government support, making unemployment more costly in the U.S.

Quiz 11: Long-Run Economic Growth: Sources and Policies

The lower-income industrial countries are catching up to the higher-income industrial countries in terms of economic growth.

From 1990-2010,productivity growth in the United States was ________ the growth rates of other high-income countries.

Between 1990 and 2010,which of these leading industrial countries of the world had the highest average annual growth rate in GDP per capita?

Foreign direct investment declined worldwide during the recession of 2007-2009.The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and

Relative to productivity growth in the United States,which of the following countries experienced the largest decline in productivity growth from 1990 to 2010?

Would you expect to see higher or lower growth rates for countries that start out with a relatively low level of real GDP per capita? Explain using the concept of "catch-up" and support your answer with a graph.

By offering more generous unemployment insurance programs,European countries can expect

Productivity gains in the United States since 1990 have been ________ productivity gains in other leading industrial nations.

Draw a graph of "catch-up" that shows where you would expect to see a country with low saving rates and low levels of health and education.How would you expect real GDP per capita to grow in a country like this? Explain.

Disease,poor nutrition,and substandard health care in developing nations can reduce growth in an economy by

Foreign direct investment in the United States declined 42 percent in the first quarter of 2009.This means that

One reason why many low-income countries experience low rates of growth is because of low rates of saving and investment in those countries.

The term "brain drain" refers to

The developing countries have been catching up to the lower-income industrial countries in terms of economic growth.

Enforcing property rights in an economy will

Which of the following is an example of the way the financial markets in the United States can encourage technological progress more efficiently than other countries?

All of the following policies are ways for a country to promote long-run economic growth except

Table 22-2 -Refer to Table 22-2.Consider the statistics in the table above in describing the industrialized countries.Are these consistent with the economic growth model? Briefly explain.

Which of the following best explains why productivity growth in the United States has been faster than in other leading industrialized nations?

The opportunity cost of being unemployed tends to be the highest in which of the following countries?