Question 1

Significant economic growth did not begin in the world until

Accepted Answer

Significant economic growth on a global scale is widely recognized to have begun around 1750 A.D., coinciding with the onset of the Industrial Revolution. This period marked a dramatic increase in the rate of economic growth due to technological innovations, increased productivity, and the expansion of global trade networks.

Question 2

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

Accepted Answer

The twentieth century saw the greatest growth in real GDP per capita for the world economy due to factors such as technological advancements, globalization, and increased trade.

Question 3

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%?

Accepted Answer

Using the formula for compound interest: 
Final GDP per capita = Initial GDP per capita x (1 + growth rate)^time 
Final GDP per capita = $8,000 x (1 + 0.032)^5 = $9,365. Therefore, the answer is C.

Question 4

Suppose that in 2013,real GDP grew in Estonia by 3% and the population increased by 5%.Therefore,in 2013,Estonia experienced

Accepted Answer

While Estonia experienced economic growth of 3%, the fact that the population increased by 5% suggests that the growth in GDP was outpaced by the growth in population. This could result in a smaller amount of resources per person, which could lead to a lower increase in living standards. Therefore, while Estonia experienced economic growth, it is unlikely that there was an increase in living standards for the population as a whole.

Question 5

The Industrial Revolution began in

Accepted Answer

The Industrial Revolution is generally considered to have started in England around 1750, with the mechanization of the textile industry and the invention of the steam engine. While other countries, such as the United States and Germany, also experienced industrialization in the following decades, the origins of the movement are generally traced back to England.

Question 6

If real GDP per capita in the United States is $8,000 in 2013,and if real GDP per capita is $12,000 in 2023,what is the total percent change in the growth rate of GDP per capita between 2013 and 2023?

Accepted Answer

The percent change in GDP per capita is calculated as ((12,000 - 8,000) / 8,000) * 100 = 50%.

Question 7

Some factors currently exist that inhibit the growth rate of the Chinese economy.One reason that General Motors has been unwilling to bring its latest technology for building electric and hybrid cars to China is

Accepted Answer

The lack of laws that predictably enforce property rights is a factor that currently inhibits the growth rate of the Chinese economy. This is because without strong property rights, companies may be hesitant to invest in research and development of new technologies, as they may not be able to protect their intellectual property. Therefore, General Motors may be hesitant to bring its latest technology for building electric and hybrid cars to China due to concerns over intellectual property theft.

Question 8

Table 11-1
 
-Refer to Table 11-1.Based on the table above,which country has a higher standard of living and why?

Accepted Answer

The standard of living is more accurately reflected by GDP per capita rather than total GDP, as it accounts for the population size and indicates the average wealth of each person in the country. If Ireland has a higher GDP per capita, it suggests a higher standard of living compared to Sweden, regardless of the total GDP or GDP growth rates.

Question 9

If a country's real GDP is rising by 3% per year while its population is rising at 5% per year,which of the following is true?

Accepted Answer

When a country's population is rising at a higher rate than its real GDP, it means that the country's economy is not growing fast enough to keep pace with the increase in the number of people. This implies that each person, on average, has access to fewer resources, which results in a declining standard of living. Therefore, the correct answer is A, the country's standard of living is falling.

Question 10

The rapid growth of the Chinese economy should

Accepted Answer

The rapid growth of the Chinese economy could benefit U.S. consumers as they have access to less expensive consumer goods due to the lower production costs in China. However, it may also have negative effects such as the displacement of certain jobs in the United States.

Question 11

China's economy has grown tremendously from 1979 to the present.The reason for this growth is

Accepted Answer

The introduction of market-oriented reforms in 1978 is the reason for China's economic growth. These reforms allowed for more private ownership and competition, leading to increased productivity and economic development. The centrally planned economy was actually hindering China's growth prior to these reforms. The lack of governmental intervention is not accurate as the Chinese government plays a significant role in the economy through policies and regulations. The introduction of Facebook also has no significant impact on China's economic growth.

Question 12

Between 1960 and 2010,deaths among children have

Accepted Answer

According to the information given, deaths among children have declined in nearly all countries, including most low-income countries, between 1960 and 2010. Option B is the only one that accurately reflects this information.

Question 13

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

Accepted Answer

Increasing the growth rate of GDP per capita and sustaining it over time can lead to an increase in standards of living as it indicates that the economy is producing more goods and services, creating jobs, and increasing incomes for its citizens. It may also result in better access to healthcare, education, and other public services. The other options (A, C, and D) suggest negative consequences that are not directly related to GDP growth.

Question 14

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.

Accepted Answer

Since the United States' real GDP per capita is growing at a faster rate than Bolivia's, the gap between their GDP per capita levels will widen over time.

Question 15

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

Accepted Answer

GDP per capita, which is the total GDP divided by the population, is the best measure of a country's standard of living because it takes into account the size of the population. It shows how much on average each person contributes to the economy and can give an indication of the level of economic development, as well as the availability of resources and opportunities for individuals. GDP per labor hour and GDP per unit of capital are not as comprehensive as they only look at productivity and efficiency, respectively. Total nominal GDP is not a good measure because it does not take into account population size, inflation, or distribution of wealth.

Question 16

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

Accepted Answer

During this period, humans were still mostly hunter-gatherers and had not yet developed agriculture or complex societies. Therefore, there was no sustained economic growth during this time.

Question 17

If real GDP per capita in the United States is $8,000 in 2013,and if real GDP per capita is $12,000 in 2023,what is the average annual percent change in the growth rate of GDP per capita between 2013 and 2023?

Accepted Answer

To calculate the average annual percent change in the growth rate of GDP per capita, we can use the following formula:

Average annual percent change = ((Ending value / Beginning value) ^ (1/number of years)) - 1

Plugging in the values, we get:

Average annual percent change = (($12,000 / $8,000) ^ (1/10)) - 1
Average annual percent change = (1.5 ^ 0.1) - 1
Average annual percent change = 0.05 or 5%

Therefore, the answer is choice B) 5%.

Question 18

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

Accepted Answer

Economic growth as we understand it today did not occur until the Industrial Revolution in the 18th and 19th centuries. Therefore, it is unlikely that any sustained economic growth occurred between 1,000,000 B.C. and 1300 A.D. Also, standards of living varied greatly depending on the region and time period, but it is unlikely that they substantially improved over this long span of time.

Question 19

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

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 provided a stable and secure environment for entrepreneurs to invest in and innovate, leading to the rise of industries and modernizing the economy.

Question 20

If real GDP per capita in Ireland is estimated to be $7,400 in 2014,what will real GDP per capita be in 2019 if real GDP per capita grows at an annual rate of 2.8%?

Accepted Answer

To calculate the real GDP per capita in 2019, we need to use the following formula:
Real GDP per capita in 2019 =
Real GDP per capita in 2014 x (1 + annual growth rate)^(number of years between 2014 and 2019)

Plugging in the values, we get:
Real GDP per capita in 2019 =
$7,400 x (1 + 0.028)^(5)
= $7,400 x 1.14875
= $8,496

Therefore, the answer is B.

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