Introduction To principles Of Economics And Macroeconomics
10th Edition Final Exam Questions And Answers With
Rationales By: Karl Case, Ray Fair, Sharon Oster |Grade A+
QUESTION: When discussing economic growth, it is often useful to focus on ____________, to avoid
studying changes in the size of GDP that represent only having more people in the economy, and
focus on those increases in GDP which represent an actual rise in the standard of living on a per
person basis.
A. Economic growth
B. GDP per capita
C. Living standards
D. Consumption and expenditures ✓✓Correct Answer: GDP per capita
QUESTION: A country will roughly double its GDP in twenty years if its annual growth rate is:
A. 12 percent.
B. 7.6 percent.
C. 3.6 percent.
D. 2.6 percent. ✓✓Correct Answer: 3.6 percent
QUESTION: Assuming a country's economy maintains an 8% rate of growth, young adults starting at
age 20 would see the average standard of living in their country more than double by the time they
had reached age __________.
A. 30
B. 40
C. 50
D. 60 ✓✓Correct Answer: 30
,QUESTION: __________ is output per hour in the business sector.
A. Net exports
B. Productivity
C. Investment
D. GDP per capita ✓✓Correct Answer: Productivity
QUESTION: Two countries- Country One and Country Two initially have the same real GDP per
capita. Country One experiences no economic growth, while Country Two grows at a sustained rate
of 5 percent. In 14 years, Country One's GDP will be approximately ________ that of Country Two.
A. One-fourth
B. One-half
C. Double
D. Triple ✓✓Correct Answer: One-half
QUESTION: Increased investment alone will guarantee economic growth.
A. This is a true statement, because growth occurs only with savings.
B. This is a true statement, because money is the only resource needed for growth.
C. This is a false statement, because an economy must rely on capital injections from abroad.
D. This is a false statement, because economic growth hinges on the quality and type of investment
as well as the human capital and improvements in technology. ✓✓Correct Answer: This is a false
statement, because economic growth hinges on the quality and type of investment as well as the
human capital and improvements in technology.
QUESTION: An economy's rate of productivity growth is closely linked to the growth rate of its
______________, although the two aren't identical.
,A. GNP
B. Output
C. GDP per capita
D. Technology ✓✓Correct Answer: GDP per capita
QUESTION: Country A-land and Country Z-land initially have the same real GDP per capita. Country
A-land experiences no economic growth, while Country Z-land grows at a sustained rate of 7
percent. In 12 years, Country Z-land's GDP approximately ________ that of Country A-land.
A. Triple
B. Double
C. One-half
D. One-fourth ✓✓Correct Answer: Double
QUESTION: Which of the following factors contribute to economic growth?
A. An increase in the average wage rate paid to workers
B. An increase in the standard of living
C. A decrease in the productivity of labor
D. An increase in the proportion of the population that is college educated ✓✓Correct Answer: An
increase in the proportion of the population that is college educated
QUESTION: To achieve a high standard of living, a nation should:
A. Increase welfare payments to the poor.
B. Use less capital and more labor in the production process.
C. Promote economic growth.
D. Increase the tax deduction for child dependents. ✓✓Correct Answer: Promote economic growth.
, QUESTION: In certain African countries like Niger, Tanzania, Nigeria, and Sudan, for example, GDP
per capita at the start of the 2000s was still less than $___________.
A. 30
B. 300
C. 3000
D. 30,000 ✓✓Correct Answer: 300
QUESTION: When society has a higher level of capital per person, it is called ______________.
A. Physical capital
B. Human capital
C. Capital deepening
D. Technological gains ✓✓Correct Answer: Capital deepening
QUESTION: In the long run, the most important source of increase in a nation's standard of living is
a:
A. Zero rate of population growth
B. High rate of economic growth.
C. High rate of consumption.
D. High rate of labor force growth. ✓✓Correct Answer: High rate of economic growth.
QUESTION: Of the world's population of 6.7 billion people, _________ are scraping by on incomes
that average less than $2 per day.
A. 260 million
B. 2.6 billion
10th Edition Final Exam Questions And Answers With
Rationales By: Karl Case, Ray Fair, Sharon Oster |Grade A+
QUESTION: When discussing economic growth, it is often useful to focus on ____________, to avoid
studying changes in the size of GDP that represent only having more people in the economy, and
focus on those increases in GDP which represent an actual rise in the standard of living on a per
person basis.
A. Economic growth
B. GDP per capita
C. Living standards
D. Consumption and expenditures ✓✓Correct Answer: GDP per capita
QUESTION: A country will roughly double its GDP in twenty years if its annual growth rate is:
A. 12 percent.
B. 7.6 percent.
C. 3.6 percent.
D. 2.6 percent. ✓✓Correct Answer: 3.6 percent
QUESTION: Assuming a country's economy maintains an 8% rate of growth, young adults starting at
age 20 would see the average standard of living in their country more than double by the time they
had reached age __________.
A. 30
B. 40
C. 50
D. 60 ✓✓Correct Answer: 30
,QUESTION: __________ is output per hour in the business sector.
A. Net exports
B. Productivity
C. Investment
D. GDP per capita ✓✓Correct Answer: Productivity
QUESTION: Two countries- Country One and Country Two initially have the same real GDP per
capita. Country One experiences no economic growth, while Country Two grows at a sustained rate
of 5 percent. In 14 years, Country One's GDP will be approximately ________ that of Country Two.
A. One-fourth
B. One-half
C. Double
D. Triple ✓✓Correct Answer: One-half
QUESTION: Increased investment alone will guarantee economic growth.
A. This is a true statement, because growth occurs only with savings.
B. This is a true statement, because money is the only resource needed for growth.
C. This is a false statement, because an economy must rely on capital injections from abroad.
D. This is a false statement, because economic growth hinges on the quality and type of investment
as well as the human capital and improvements in technology. ✓✓Correct Answer: This is a false
statement, because economic growth hinges on the quality and type of investment as well as the
human capital and improvements in technology.
QUESTION: An economy's rate of productivity growth is closely linked to the growth rate of its
______________, although the two aren't identical.
,A. GNP
B. Output
C. GDP per capita
D. Technology ✓✓Correct Answer: GDP per capita
QUESTION: Country A-land and Country Z-land initially have the same real GDP per capita. Country
A-land experiences no economic growth, while Country Z-land grows at a sustained rate of 7
percent. In 12 years, Country Z-land's GDP approximately ________ that of Country A-land.
A. Triple
B. Double
C. One-half
D. One-fourth ✓✓Correct Answer: Double
QUESTION: Which of the following factors contribute to economic growth?
A. An increase in the average wage rate paid to workers
B. An increase in the standard of living
C. A decrease in the productivity of labor
D. An increase in the proportion of the population that is college educated ✓✓Correct Answer: An
increase in the proportion of the population that is college educated
QUESTION: To achieve a high standard of living, a nation should:
A. Increase welfare payments to the poor.
B. Use less capital and more labor in the production process.
C. Promote economic growth.
D. Increase the tax deduction for child dependents. ✓✓Correct Answer: Promote economic growth.
, QUESTION: In certain African countries like Niger, Tanzania, Nigeria, and Sudan, for example, GDP
per capita at the start of the 2000s was still less than $___________.
A. 30
B. 300
C. 3000
D. 30,000 ✓✓Correct Answer: 300
QUESTION: When society has a higher level of capital per person, it is called ______________.
A. Physical capital
B. Human capital
C. Capital deepening
D. Technological gains ✓✓Correct Answer: Capital deepening
QUESTION: In the long run, the most important source of increase in a nation's standard of living is
a:
A. Zero rate of population growth
B. High rate of economic growth.
C. High rate of consumption.
D. High rate of labor force growth. ✓✓Correct Answer: High rate of economic growth.
QUESTION: Of the world's population of 6.7 billion people, _________ are scraping by on incomes
that average less than $2 per day.
A. 260 million
B. 2.6 billion
