Ch 16 Econ 360
1) Total factor productivity isA) the quantity of output per worker.B) the quantity of output per unit of capital.C) the ratio of inputs divided by outputs.D) the quantity of output per unit of input.E) a measurement of the contribution of education to productivity.
Answer: D
2) If a country's income grows at the rate of 5 percent a year, it doubles in aboutA) eight years.B) six and one-half years.C) ten years.D) fourteen and one-half years.E) twenty years.
Answer: D
2) Measurements of TFP indicate that the East Asian success story is based onA) a significantly different economic model from the one followed in the West.B) unusually large amounts of innovation.C) rapid increases in the education of the work force.D) high amounts of savings and investment.E) large current account surpluses.
Answer: D
4) Critics of the World Bank's analysis of East Asian industrial policies argue thatA) even though growth was faster in the non-targeted industries than it was in the targeted ones, the policies were essential to overall economic growth.B) growth was faster in nearly every targeted industries than it was in the non-targeted ones.C) even though growth was the same in the targeted industries as it was in the non-targeted ones, they would have grown slower without the policies.D) growth was slower in the targeted industries; hence the policies did not work.E) measurements of economic growth are invalid and cannot be used to make comparisons between industries.
Answer: C
1) A technique for implementing industrial policies that probably worsened the effects of the 1997 crisis wasA) directed credit.B) protection from imports.C) export subsidies.D) research subsidies.E) quotas.
Answer: A
4) One obstacle to the adoption of the export promotion model by countries in other regions is thatA) the Uruguay Round of the GATT forbids many types of export promotion policies.B) the Washington Consensus opposes the spread of this model.C) research and development for new exports is too expensive.D) only noncommercial R&D is permitted under the rules of the GATT.E) industrial monopolies in the high-income countries will block further exports by developing countries.
Answer: A
4) Which of the following is a false statement about education in the HPAE?A) An emphasis on state funding of advanced degree programs, such as engineering and computer science, increased manufacturing production significantly.B) Literacy rates rose dramatically in the HPAE and laid a foundation for a skilled labor force.C) As the average educational level rose, workers could take on more technological, sophisticated production, pushing new investment into product lines.D) Spending was focused on the primary and secondary level, where it has the greatest social impact.
Answer: A
6) Which of the following has not been promoted by HPAE?A) Large job creation in the government sectorB) Land reformC) Free basic health careD) Significant investments in rural infrastructure
Answer: A
1) One of the main differences between the recent economic history of the high-performance Asian economies and most of the rest of the world is that growth in the Asian economiesA) increased in the 1960s.B) continued in the 1980s.C) slowed down in the 1960s.D) slowed down in the 1980s.E) slowed down in the 1970s.
Answer: B
1) Which of the following groupings correctly represents the Four Tigers (or Four Dragons)?A) Thailand, China, Japan, and MalaysiaB) Hong Kong, Singapore, South Korea, and TaiwanC) Japan, Hong Kong, Thailand, and MalaysiaD) South Korea, China, the Philippines, and JapanE) Singapore, Malaysia, Indonesia, and India
Answer: B
3) One economic advantage of a large share of exports in GDP is that countriesA) can reduce their budget deficits.B) can purchase the imports they need.C) can maintain lower rates of unemployment.D) will have greater equality in their incomes. E) develop more labor-intensive industry.
Answer: B
3) The World Bank's view of the effectiveness of industrial policies in East Asia is that, in general, theyA) hindered growth.B) had little or no effect on growth.C) encouraged growth.D) are the main factor in the success of the East Asian economies.E) worked in Japan and Korea, but not in the other countries.
Answer: B
3) Which of the following is NOT a contributing factor into why the HPAE were able to rapidly accumulate physical and human capital?A) A stable macroeconomic environment meant low inflationB) Loans from multilateral institutions such as the IMF, the World Bank, and regional development banksC) The demographic transition meant that the proportion of their population working was higher.D) A rapid rise in income made greater amounts of savings possible.
Answer: B
1) In general, the relationship between democracy and economic growth as demonstrated by the HPAEs is thatA) democratic nations grow faster than undemocratic nations.B) democratic nations grow slower than undemocratic nations.C) there does not seem to be a relationship between democracy and economic growth.D) democracies are much more variable in their rates of growth than undemocratic nations.E) democracies are much less variable in their rates of growth than undemocratic nations.
Answer: C
1) The experience of the HPAEs has brought attention to predictions about income inequality made by Kuznets. He predicted that at first income inequality would ________ as economies began to develop. In the HPAEs experience it ________. A) rise; roseB) decrease; decreasedC) rise; fellD) fall; rose E) There was no pattern.
Answer: C
2) Movement of the fast-growing Asian nations through the demographic transition may have had an impact on growth rates because itA) reduced expenditures on health care.B) reduced expenditures on pensions.C) increased savings.D) increased consumption relative to GDP.E) increased the number of retired people.
Answer: C
2) One of the functions of deliberation councils is toA) coordinate foreign investment from different countries.B) set educational policy for universities and colleges.C) coordinate government policy and private investment.D) broaden the economies base of exports.E) ensure stability in the country's fiscal and monetary policies.
Answer: C
7) Which of the following is NOT a mechanism the HPAE used to share wealth across all layers of society?A) significant investments in rural infrastructureB) free public educationC) tax policies that strongly redistributed income from rich to poorD) land reform
Answer: C
2) Which of the following was NOT part of Korean industrial policies?A) An aggressive promotion of exports along with high levels of protectionB) Directed credit and tax breaks given to targeted industriesC) Subsidies given to some targeted firmsD) Bailing out bankrupt firms without any attempt to dispose distressed firmsE) Allowing exporting firms to borrow funds at below-market interest rates
Answer: D
3) Investment in education in the HPAE was ________ in ________.A) low; primary schoolsB) high; primary schoolsC) low; primary and secondary schoolsD) high; primary and secondary schoolsE) high; university education
Answer: D
5) All of the following are true of the HPAE EXCEPTA) macroeconomic stability has been a high priority of their economic policies.B) strong, credible commitments to sharing economic growth across all layers of society exist.C) exports have been promoted while at the same time being more open to imports than other developing countries.D) restrictions on imports of capital goods have helped to favor the development of domestic technology.
Answer: D
1) All of the following would be potential problems if developing nations around the world emphasized export promotion EXCEPTA) industrial nations may be unable to absorb the exports of many newly industrializing nations.B) it would be much harder to emphasize exports under the WTO framework if the emphasis in exports requires some kind of subsidies.C) export growth may not add to GDP if it crowds out growth in output of goods for domestic consumption.D) export promotion by many countries may lead to economic conflicts.E) current research has clearly established that there is no causal connection between exports and faster economic growth.
Answer: E
2) Which of the following economic conditions cause export growth to be a basis for faster overall economic growth?A) Diseconomies of scale in production for the domestic marketB) A larger-than- average service sectorC) A larger-than-average manufacturing sectorD) High and constant levels of productivity in export productionE) Economies of scale in production for the world market
Answer: E
10) The HPAE focused their education spending on the university level to better develop high technology workers.
Answer: FALSE
11) Rent-seeking activities have been a major problem in the HPAE and contributed greatly to the Asian financial crisis.
Answer: FALSE
2) The economies of the Four Tigers are all classified as middle income by the World Bank.
Answer: FALSE
3) The main contributor to growth in the HPAE according to empirical research was government industrial policies.
Answer: FALSE
4) All of the Newly Industrializing Economies are in East Asia.
Answer: FALSE
4) The Latin American region has more economic equality than the HPAE because nations are more democratic.
Answer: FALSE
5) Export promotion is widely regarding by economists as a positive role for government policy makers to play because it is very effective at promoting economic growth.
Answer: FALSE
5) The voices of business and industry are less likely to influence government policy than the voices of consumers in the HPAE.
Answer: FALSE
6) Deliberation councils have no private sector input.
Answer: FALSE
9) Similarly to the Latin American region, the HPAE experienced a Lost Decade in the 1980s.
Answer: FALSE
5) What appears to have been one of the major causes of the Asian financial crisis?
Answer: Government directed credit programs
10) Falling inequality has been a feature of the HPAE due to land reform, free public education, free basic health care, and significant investments in infrastructure for communication, sanitation, and transportation.
Answer: TRUE
12) Property rights are relatively secure and free from the threat of nationalization in the HPAE.
Answer: TRUE
3) All eight countries known as the High Performance Asian Economies are outwardly oriented for trade and investment, and all have experienced rapid growth by world standards.
Answer: TRUE
4) Studies of the HPAE confirm the importance of savings and investment in increasing economic growth.
Answer: TRUE
7) In the HPAE, inflation is kept under control and budget deficits and foreign debt levels are kept within the ability of the governments and the economies to handle them, which is quite different from the past experience of the Latin American region.
Answer: TRUE
8) Each of the HPAE promoted manufactured exports.
Answer: TRUE
8) The HPAE have been more open to imports than most developing countries.
Answer: TRUE
9) Macroeconomic stability has been a high priority for the economic policies of the HPAE.
Answer: TRUE