Chapter 24: Economic Growth and the Wealth of Nations

Of the following, which are institutions that would foster economic growth?

1. Efficient taxes 2. Stable monetary system 3. Private property rights 4. Open markets 5. Political stability

Which nations' diplomats frequently committed parking violations? Which nations' diplomats committed very few?

1. Egypt 2. Bulgaria 3. Sudan

Place the countries in order of economic growth, least to greatest, for the period 1950-2016.

1. Haiti 2. Honduras 3. Mexico 4. Turkey

In 1924, there were 21 million cows producing 90.3 billion pounds of milk; in 2014, there were 9.5 million cows producing 204 billion pounds of milk. What was productivity of milk per cow, in pounds per year in 1924 and 2014 (to the nearest 1,000 pound)?

4,300 and 21,500

In 2018, Brazil's annual economic growth rate was 1.1%. Use the rule of 70 to estimate how long it would take for its real per capita GDP to double at that rate on average over the entire term. Round up to nearest whole number.

64 years

In economics, cultural norms are a given—not a factor that can be critiqued and changed for economic reasons.

false

What is the definition of an institution?

a significant practice, relationship, or organization

Identify the items that contribute to an increase in a nation's real per capita GDP.

Contributes to increased real Per Capita GDP: 1. Improvements in technology make workers more productive. 2. The average education level in work-related skills rises.

Drag items to fill in the correct growth rate in world GDP for each era in the table.

1. 0.02% 2. 0.64% 3. 1.04% 4. 2.12%

Identify the characteristics that have enabled Singapore to become one of the world's most prosperous nations.

1. Strategic location 2. Stable financial system 3. High literacy rate

Which developments were characteristic of the Industrial Revolution and the events leading up to it, in nations where it took hold?

1. a shift from agriculture to manufacturing 2. technological innovations 3. a sharp upturn in real per capita GDP 4. legal innovations, such as increased protection for private property

Place the inventions in chronological order.

1. first U.S. telephone patent 2. First paper describing an X-ray machine 3. first patent application for a television system 4. first electronic general-purpose computer 5. first commercial hand-held mobile (cellular) phone

Complete the sentence describing the nature of institutions.

Although institutions are often associated with a physical representative (like the Supreme Court building), the essence of an institution is a set of expectations and practices that shape the environment in which decisions are made.

$53,000 is placed in an investment account that grows at a fixed rate of 2% (compound growth) per year. How much is in the account after four years? Round your answer to the nearest whole number.

Answer: 57369 Explanation: After one year, the account contains $54,060; after two years, $55,141; and so on.

Identify the country to which each description applies.

China: Today's private property rights date back to a radical 1978 experiment. Liberia: Private property rights are not secure. Taiwan: Private property rights have been secure since about 1950.

Apply the appropriate label to each market situation.

Competitive markets: A nation permits private firms to compete with the state-owned mail service. International trade: Two countries agree to lower import tariffs on selected goods. Flow of funds across national borders: A country loosens its restrictions on foreign-based land ownership.

Identify the equations that, in combination, can be used to approximate economic growth.

Equations that can be used: 1. %Δ real per capita GDP = %Δ real GDP - %Δ population 2. %Δ real GDP = %Δ nominal GDP - %Δ prices Not an equation that can be used: 1. %Δ real per capita GDP = %Δ nominal GDP - %Δ population 2. %Δ real per capita GDP = %Δ nominal GDP - %Δ prices

What, by consensus among economists, are the broad factors for economic growth?

Factor(s) for Economic Growth: 1. resources 2. technology 3. institutions Not a factor for Economic Growth: 1. topography 2. language

The medical industry leveraged a new vaccine-building method called mRNA to create a vaccine for the coronavirus. This made it possible to create a vaccine without the use of the live virus, but the vaccines required extreme cold storage. Match each resource to the appropriate example.

Human Capital: Medical staff who administer the vaccination Physical capital: sub-zero freezers to store the vaccine Technology: Use of mRNA to create vaccines

Fill in the blanks to complete the passage about the economy.

Improving human capital enables a country to have more skilled labor. Expanding the education system is one way to do this, but it is slow—it's faster to allow for immigration, such that already trained workers from other countries can enter the country.

Fill in the blanks to complete the passage about goods and services.

International trade enables countries to buy and sell from each other; the international flow of funds across borders allows the payment for these products to be made. In this way, we can say that these two institutions are complementary.

Match the appropriate label to each country.

North Korea - low GDP per capita South Korea - high GDP per capita Niger - low GDP per capita Israel - high GDP per capita Bangladesh - low GDP per capita Taiwan - high GDP per capita

The data below are characteristics of either a rich or a poor nation, on average. Match the data with the correct economic level it describes.

Poor nation: 1. secure Internet servers (per million people) = 1,053 2. physicians (per 10,000 people) = 3 3. mobile cellular subscriptions (per 100 people) = 62 Rich nation: 1. mobile cellular subscriptions (per 100 people) = 125 2. physicians (per 10,000 people) = 30 3. secure Internet servers (per million people) = 18,127

Complete the description of advances in U.S. corn cultivation.

The United States produces six times as much corn per acre as it did 89 years ago. This has been accomplished by means of new hybrid varieties of corn, improved products for disease control, more efficient irrigation techniques, and new fertilizers.

Fill in the blanks to complete the passage about Americans' quality of life today.

The average American's real income today is about four times what it was in 1960. Average lifetime lengths have increased by 12%, the number of hours worked per week has decreased by 17%, and homes have more than doubled in size.

Fill in the blanks to complete the sentence about one key form of capital.

The standardized shipping container, along with the supply chain management to enable it to be integrated into companies' processes, made it much easier to transport goods around the world, by eliminating the need to repack them every time the mode of transportation changed. This illustrates the key role of physical capital and integrated systems for managing it as factors of production.

There are parts of the world where the price of drinkable water is roughly comparable to that of gasoline in the United States.

True

Fill in the blanks to complete the passage about worldwide average income levels in modern times.

Worldwide, incomes began to rise dramatically around 1800. Even so, a historian has estimated that in 1820, the average annual income in 2010 dollars was about $1,100. That was sufficient income for basic necessities in most cases, but not enough for what most people today consider ordinary comforts.

Identify each item as either human capital or technology.

human capital: 1. A factory team that together builds smartphones. 2. A worker who has been trained to service an electron microscope. technology: 1. a method of extracting drinkable water from the ocean 2. an assembly line control system