MACRO CHAPTER 16 & 17

Obstacles that restrict trade, either domestic or international, will A. reduce output, income, and the general living standard of the populace B. help people achieve higher income levels C. help promote high rates of economic growth D. encourage domestic business firms to expand output so they can achieve larger gains from the adoption of pass production techniques

A.

To move up the income ladder and achieve high-income status, countries must A. have sustained economic growth B. restrict international trade C. encourante the production of consumption goods rather than investment goods D. maintain high inflation

A.

an increase in real capita income will generally lead to A. a cleaner environment and more time for recreation B. a reduction in life expectancy because working conditions are less desirable C. an increase in the number of hours worked by residents D. an increase in real GDP that is less rapid than the increase in population

A.

Realization of gains from trade, entrepreneurial discovery, and investment are largely dependent on A. competitive elections and political democracy B. the presence of institutions and policies consistent with economic freedom C. the use of tariffs and quotas to protect domestic businesses from competition with foreigners D. the use of government planning to direct investments into worthwhile projects

B.

The successful introduction and adoption of a new product or process is called A. invention B. innovation C. economies of scale D. economic growth

B.

What has happened to income inequality and the poverty rate of the world since 1980? A. both income inequality and the poverty rate have increased B. both income inequality and the poverty rate have declined C. income inequality has increased but the poverty rate has declined D. income inequality has declined but the poverty rate has increased

B.

government policies that heavily tax some activities while subsidizing others and that fix or control interest rates will result in A. higher productivity of investment B. lower productivity of investment C. no change in productivity of investment D. a greater level of investment

B.

political institutions are more likely to allow and encourage the emergence of good economic institutions and policies when A. the top government executives have enough power to impose good economic arrangements on the nation. B. constitutional constraints prevent laws and regulations that weaken the rights of property owners, curtail voluntary exchange, and provide for decentralization of government. C. the elected executive and legislative branches have fewer constraints on what they can do, leaving them free to innovate and improve economic institutions. D. well organized interest groups exert a powerful influence on the political process.

B.

the economic freedom of the world index is a measure of the consistency of a nation's institutions and policies with A. political democracy B. economic freedom C. an Egalitarian distribution of income D. economic nationalism

B.

which of the following is true regarding the per person income of the world during the past 1000 years? A. the world's income per person has approximately doubled during the past 1000 years and most of that growth has occurred since 1900 B. the world's income per person changed very little during the 800 years prior to 1813, but it has increased by nearly tenfold during the past 200 years C. the world's income per person has grown steadily during the past 1000 years D. the world's per person income grew at an annual rate of more than 2 percent during 1000-1813, but the annual growth rate has declined as the population increased during the past 200 years

B.

During the past 200 years, income per person has A. increased in the developed countries of Western Europe and North America, but declined in the rest of the world B. declined in the developed countries of Western Europe and North America, but has increased in the rest of the world C. increased far more rapidly in both developed and less developed countries than during the centuries prior to 1800 D. increased far less rapidly in both developed and less countries during the centuries prior to 1800

C.

If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective? A. imposition of price controls on agriculture products in an effort to keep food cheap B. a public-sector investment program financed by highly progressive taxation C. low taxes, a monetary policy consistent with long-run price stability, and the abolition of price controls and trade restrictions D. expansionary monetary policy designed to keep interest rates low

C.

The world bank classifies persons with incomes of less than $3.10 per day (measured in 2011 international dollars) as living in moderate poverty. Between 1980 and 2013, the moderate poverty rate of the world (A) increased from 50 percent to almost 70 percent. (B) increased from 30 percent to almost 50 percent. (C) decreased from 67 percent to 31 percent. (D) was virtually unchanged during this 33 year period.

C.

When competition is present and property rights secure, people will be encouraged to A. plunder the resources of others B. pay the lowest possible wages C. provide others with things that they value in exchange for income D. invest in other countries where markets are less competitive and property rights less secure

C.

Which of the following is true for the world as a whole? A. During the past 200 years, the income per person of the world has increased sharply, but there has been little change in the years of life expectancy at birth. B. During the past 200 years, the years of life expectancy at birth has increased sharply, but there has been little change in the world's income per person. C. During the 800 years between 1000 and 1800, the increases in both world income per person and life expectancy at birth were small, but both of these indicators have increased sharply during the past 200 years. D. Both income per person and life expectancy rose steadily during 1000-1800, but neither of these indicators have increased much during the past 200 years as the population of the world has become larger and larger.

C.

*****According to the Economic Freedom of the World data, the United States (A) is now the freest economy in the world. (B) is the world's third freest economy, behind only Hong Kong and Singapore. (C) has experienced a decline in economic freedom since 2000 (D) has experienced an increase in economic freedom since 2000 and it is now the world's 8th freest economy.

C. ? ******

An open capital market affects a nation's economic growth by A. channeling capital into productive projects and away from wasteful projects B. rewarding investors who find the most productive projects and invest in them C. making the lowest-cost capital available from around the world D. all of the above

D.

Compared to those with less economic freedom, countries with more economic freedom generally have ____ per capita GDP levels and ____ growth rates. a. lower; less rapid b. lower; more rapid c. higher; less rapid d. higher; more rapid

D.

Measured in 1990 dollars, the GDP per person of the world was $667 in 1820. By 2003, the world's income per person had risen to (A) nearly $1200, almost twice the level of 1820. (B) $2,422, almost four times the level of 1820. (C) a little more than $3,600, approximately six times the level of 1820. (D) $6,516, nearly ten times the level of 1820.

D.

Regarding economic growth, which of the following is true? (A) In recent decades, the rich countries of the world have consistently grown more rapidly than poor countries. (B) No LDC was able to achieve a more rapid growth rate than the United States during the 1980 through 2005 period. (C) During recent decades, most LDCs have stagnated economically. (D) During 1980 through 2005, the fastest growing countries in the world were mostly LDCs.

D.

concerning economic growth, which of the following is true? A. nations achieve high rates of economic growth primarily because of the natural resource endowments B. human and physical capital investments are largely irrelevant to economic growth C. poor nations grow slowly because they do not have access to modern technology D. a favorable institutional environment will tend to attract more investment in human and physical capital

D.

if a country's political leaders wanted to promote economic growth, which of the following policy alternatives would be most effective? A. imposition of price controls on agricultural products in an effort to keep food cheap B. imposition of high marginal tax rates designed to reduce income inequality C. imposition on tariffs and other trade restrains limiting international trade D. monetary policy consistent with long-run price stability

D.

which of the following is a key characteristic of economic freedom? A. institutions and policies supportive of voluntary exchange B. freedom to compete C. protection of people and their property from aggressors D. all of the above

D.

which of the following is important if a country is going to achieve and sustain high rates of economic growth? A. investment in physical and human capital B. improvements in technology C. institutional and policy arrangements consistent with economic efficiency D. all of the above

D.

which of the following is one of the reasons to believe that institutional change is more likely now than in the past? A. the colonial era is over and countries are in the position to make their own institutional choices B. the collapse of communism has expanded the opportunity for institutional change C. reductions in transportation and communication costs have increased the importance of institutions and policies D. all of the above

D.