Question 1

With respect to economic freedom,which is true?

Accepted Answer

This statement is supported by research and economic theory. Countries with higher levels of economic freedom tend to have stronger economic growth rates and higher levels of prosperity. This is because economic freedom allows for greater innovation, productivity, and entrepreneurship.

Question 2

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

Per capita real GDP is defined as real GDP divided by population. If real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent, then per capita real GDP will grow at a rate of 1 percent per year (4% - 3%).

Question 3

The rate of growth in real GDP minus the rate of growth of the population is the

Accepted Answer

The rate of growth in real GDP minus the rate of growth of the population gives us the rate of growth of per capita real GDP, which is the measure of the changes in the average standard of living of a country. Therefore, the correct choice is D.

Question 4

In the determination of economic growth,political freedom

Accepted Answer

Studies have shown that economic freedom, such as the ability to start a business, access to capital, and low levels of government intervention, are more closely linked to economic growth than political freedom. While political freedom can contribute to a stable and predictable environment for businesses to thrive, it is not as critical for economic growth as economic freedom.

Question 5

Suppose that the real Gross Domestic Product (GDP)growth rate for a country was 4 percent and the population growth rate was 7 percent.What would the per capital real Gross Domestic Product (GDP)growth rate be for this country?

Accepted Answer

Per capita real GDP growth rate would be GDP growth rate minus population growth rate, which is 4 percent - 7 percent = -3 percent.

Question 6

If population growth occurs while jobs are difficult to obtain or labor force participation does not increase,

Accepted Answer

Population growth alone does not equate to an increase in labor resources if there are no corresponding increases in job opportunities or labor force participation. This can actually lead to higher unemployment rates and stymied economic growth, as there may be more people needing jobs but not enough available positions. Therefore, there may be little or no increase in a nation's labor resources.

Question 7

Political freedom can sometimes moderately reduce economic growth because

Accepted Answer

Political freedom can lead to special interest groups gaining power and advocating for policies that benefit their narrow interests, but may have negative effects on the overall economy. This can include lobbying for regulations that make it harder for new businesses to enter the market or for existing businesses to grow, or seeking tax breaks and subsidies that divert resources away from more productive uses. These policies can slow down economic growth and hinder innovation.

Question 8

Over the past decade,a nation's real Gross Domestic Product (GDP)grew at a constant rate of 10 percent per year while its population grew 8 percent annually.Forecasters predict that during the coming decade,real GDP will continue to grow 10 percent annually,but the population growth rate is expected to drop to 6 percent annually.If the forecasters are correct,which of the following will be true?

Accepted Answer

The answer of Over the past decade,a nation's real Gross...

Question 9

According to the text,the 17 countries with high degrees of economic freedom

Accepted Answer

The text states that the 17 countries with high degrees of economic freedom account for 81 percent of total world output.

Question 10

Assume that a country has had a relatively steady growth of aggregate real GDP.A higher population growth tends to

Accepted Answer

A higher population growth tends to reduce the growth of per capita real GDP because with more people, the same level of output is spread over a larger population, resulting in a lower per capita real GDP. Therefore, the best choice is A. The other options are not directly related to the impact of population growth on per capita real GDP.

Question 11

Suppose a nation's real Gross Domestic Product (GDP)grows at a constant rate of 5 percent per year while its population grows 2 percent annually.Given this information,this nation's annual rate of per capita real GDP growth is approximately equal to

Accepted Answer

The per capita real GDP growth is equal to the real GDP growth rate minus the population growth rate. Therefore, per capita real GDP growth rate = 5% - 2% = 3%.

Question 12

In nondemocratic countries that have experienced consistent economic growth and improvements in their standards of living,

Accepted Answer

The answer of In nondemocratic countries that have experienced consistent...

Question 13

What will happen to the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4.5 percent and the annual rate of population growth goes from 3 percent to 3.5 percent?

Accepted Answer

The annual rate of growth of per capita real GDP is calculated as the difference between the annual rate of growth of real GDP and the annual rate of population growth. As real GDP grows at a constant rate of 4.5 percent and the annual rate of population growth increases from 3 percent to 3.5 percent, the difference between the two rates will decrease, resulting in a decrease in the annual rate of growth of per capita real GDP from 1.5 percent to 1 percent.

Question 14

According to the text,population growth in many poor countries does not generally result in increased labor resources because

Accepted Answer

The text states that population growth in many poor countries does not result in increased labor resources because "many people do not join the labor force." This implies that the increase in population does not necessarily translate to an equivalent increase in labor resources because not all people are able or willing to work.

Question 15

Country X has experienced GDP growth of 6 percent and a population growth of 4 percent.What is this country's growth of per capita real GDP?

Accepted Answer

Per capita real GDP growth can be calculated by subtracting the population growth rate from the GDP growth rate. In this case, 6 percent - 4 percent = 2 percent. Therefore the answer is A) 2 percent.

Question 16

The term "economic freedom" means

Accepted Answer

Economic freedom refers to the ability of individuals and businesses to make their own economic decisions, with minimal government intervention. This includes the right to own private property, trade goods and services, and own financial assets. Therefore, all of the choices (A) - (C) are necessary components of economic freedom.

Question 17

Suppose a nation's rate of growth of per capita real Gross Domestic Product (GDP)is 3 percent and its rate of growth in real GDP is 4 percent.Given this information,the nation's population growth rate is approximately equal to

Accepted Answer

The rate of growth of real GDP per capita is 3%, which means that the average income per person is increasing by 3%. 
The rate of growth in real GDP is 4%, which means that the total income of the nation is increasing by 4%.
Thus the remaining 1% must be the population growth rate, which is equivalent to the difference between the growth in real GDP and the growth in real GDP per capita. Hence, the answer is A) 1 percent.

Question 18

If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent,the annual rate of growth of per capita real GDP will

Accepted Answer

If population growth rate increases while GDP growth rate remains constant, then the rate of per capita GDP growth decreases. In this case, the increase in population growth from 1 percent to 2 percent will result in a decrease in the rate of per capita GDP growth.

Question 19

If the level of aggregate real Gross Domestic Product (GDP)remains constant,a reduction in the population

Accepted Answer

Per capita real GDP is calculated by dividing real GDP by the population. If the population decreases while real GDP remains constant, then per capita real GDP will increase, as there are fewer people to share the same amount of output.

Question 20

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 5 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

Per capita real GDP is real GDP divided by the population. Real GDP grows at a constant rate of 5 percent per year, so after one year it will be 1.05 times its previous value. If the population grows at a rate of 3 percent per year, then after one year it will be 1.03 times its previous value. Dividing the two, we get 1.05/1.03 = 1.0194 or 1.94 percent. Therefore, the annual rate of growth of per capita real GDP is 2 percent.

Quiz 18: Policies and Prospects for Global Economic Growth