Macro chapter 27

If a country's real GDP per capita in 1950 was $10,000, and it grew to $20,000 by year 2000, then the country's annual growth rate during this period would have been approximately:

1.4%

If U.S. per capita GDP is $50,000 and grows at 5% per year, what will U.S. per capita GDP be in 70 years?

1.6million

Suppose a country's annual growth rate of real GDP per capita is approximately 2%. By which year would the country double its real GDP per capita from $10,000 in 1950 to $20,000?

1985

If U.S. per capita GDP is $50,000 and grows at 2% per year, what will U.S. per capita GDP be in 70 years?

200,000

If U.S. per capita GDP is $50,000 and grows at 3% per year, what will U.S. per capita GDP be in 70 years?

400,000

If real GDP per capita in the United States is currently $50,000 and grows at 2.5% per year, it will take approximately how many years to reach $200,000?

56 yrs

Suppose economies A and B have the same initial level of GDP per capita at $15,000, and each economy begins with a constant growth rate of 1% per year. (Neither country has good institutions for economic growth at first.) Then Country A enters an era of political stability, establishes property rights, and installs incentives for entrepreneurship. Country A's economic growth rate consequently improves to 5%. Assuming population growth rates remain unaffected, how much longer will it take Country B to double its per capita GDP level compared to Country A?

56 yrs

Suppose a country's real GDP per capita was $9,000 in 1990, and it grew to $18,000 by 2000. What is the annual growth rate of the country's real GDP per capita during this period?

7%

Which statement is TRUE about economic growth?

A country can grow and become wealthy, never grow, or grow and then begin to stagnate.

If the GDP of country X is 4 times the GDP of country Y and if the GDP of country X remains constant while GDP of country Y grows at a rate of 7% per year, which of the following statements is true?

Country Y's GDP will be equal to country X's GDP in 20 years.

Which statement best describes the economic growth patterns in the world since World War II?

Japan and South Korea experienced rapid growth while Argentina and Nigeria experienced slow growth

If the average annual growth rate of a country increases from 2% to 3%, how much faster will its GDP double?

NOT - 25

Roughly what percent of the world's population live in countries with per capita GDP lower than the average world per capita GDP?

NOT - 50

If you received a constant annual rate of return of 7% on an investment of $10,000, how many years will it take before you have $20,000?

NOT - 7

Which of the following is an ultimate cause of economic growth among countries around the world?

NOT - History, culture, and geography are all ultimate causes of growth./ culture?

The most promising idea for creating a growth miracle in a country is:

NOT - building more schools in the country.

Which is NOT an important institution for growth?

NOT - low??

Property rights are important institutions for encouraging investment because:

People won't invest if they don't feel their property is secure and they will reap a return on their investment

Why did so many Chinese farmers and workers starve under "The Great Leap Forward"?

The incentive to work hard was low since the rewards were so minimal.

Which scenario has the greatest potential for free riding?

a system in which work effort and pay are not connected

Which of the following would be most effective in reducing "free riding" in a communal farming system?

assigning property rights

Around the world, about one _____ people have incomes of less than $2 per day.

billion

Which is NOT likely an ultimate cause of economic growth around the world?

communal resources

Decreases in the level of political stability in a country tend to:

decrease per capita GDP.

Countries that have high per capita GDP tend to have:

high levels of all three factors of production.

. A country that has enforceable property rights, a noncorrupt political system, abundant factors of production, and a change in leadership and form of government every few years should suspect that economic growth will be _____ because _____.

high; most of the institutions needed for growth are in place

Which would be most effective in ensuring sustained long-term economic growth?

increasing technological knowledge

High-income economies generally have _____ that incentivize individuals' self-interest by using _____.

institutions; profit-seeking motives

Which of the following is (are) NOT an institution of economic growth?

labor union

Which is NOT an example of an institution that creates incentives aligning self-interest with the interest of society?

low inflation

Which is NOT an example of physical capital?

money

Which is considered an immediate cause of economic growth?

physical capital

For most of recorded human history, real GDP per capita has:

remained about the same.

Property rights encourage:

saving and investment in both physical and human capital

Which are immediate causes of the wealth of nations?

technical knowledge and human capital

A developing country could buy (or be given) _____ and _____ more easily than _____.

technological knowledge; physical capital; human capital

The key reason for China's growth miracle beginning in the late 1970s was:

the assignment of private property rights.

When an economic system changes from using a collective property rights system to something closer to private property rights, the immediate effect is:

to increase investment, work effort, and productivity.

Institutions and incentives are _____ causes, and factors of productions are _____ causes of the wealth of nations.

ultimate; immediate

History has shown that when collective property rights are converted to private property rights:

work effort, investment, and productivity all increase.