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Final Exam Ch. 24
ECO 252
| Question | Answer |
|---|---|
| Which of the following aspects of higher living standards would contribute most to future economic growth? | improved education for young people |
| A _____________ in capital goods should ____________ worker productivity. | increase; increase |
| All countries have some resources and technology available to them. The ones that grow fastest are the ones that: | have the institutions in place that allow those resources to be fully exploited |
| An advance in technology allows a firm to produce ___________ output with ___________ resources. | more; the same |
| An example of physical capital is: | a factory. |
| An increase in ________________ would lead to an increase in long-run economic growth. | resources and technology |
| Average world income began to increase rapidly during: | the Industrial Revolution |
| Average world income began to rapidly rise during the Industrial Revolution because: | the pace of technological innovation outpaced population growth |
| Beginning in the late 1970s, economic reform in China allowed farmers, for the first time, to keep a portion of their crops and to sell them to others. How did this basic reform improve China's economic growth? | It gave farmers an incentive to be more productive |
| Between 2006 and 2010, per capita real gross domestic product (GDP) in India grew at an average rate of 7.11% per year. Which of the following factors would have contributed most to this rapid escalation in growth? | advances in technology |
| Competitive markets contribute significantly to economic growth because: | people who want to participate don't face barriers to entry |
| Economic growth is defined as: | the percent change of real per capita GDP |
| If you earn a subsistence-level income, much of your time is spent acquiring: | basic necessities such as food, clothing, and shelter |
| In 1950, Nicaragua and Brazil had roughly the same-sized economies. Now, Brazil's economy is almost five times as large as Nicaragua's. This is likely because: | Brazil had better resources and technology |
| In 2000, annual real per capita gross domestic product (GDP) in the United States was around ___________, whereas in China, it was around ___________. | $44,000; $5,200 |
| In economics, technology is defined as: | the knowledge available for use in production |
| In what way did Henry Ford's use of the assembly-line method of production represent an advance in technology in automobile manufacturing? | It allowed workers to specialize on specific tasks and become more productive |
| Japan is a nation of over 6,800 islands, none of which is very large. Does this mean that Japan is destined to have low economic growth and standards of living? | No, Japan is rich in other resources and has advanced levels of technology |
| Many police officers in Mexico have been found to be working for drug traffickers. Crime in Mexico is very high and drug gangs compete for territory, leading to a great loss of life. How would this situation affect Mexico's economic growth? | Economic growth would be harmed because the rule of law no longer applies |
| Populations tend to grow over time, meaning there are more workers. In order to maintain a constant level of worker productivity, the total amount of capital available to them must: | increase at a rate at least equal to population growth |
| Recently, Greece underwent an economic crisis. One problem is Greece's tax system, which is very complicated. As a result, numerous Greeks simply choose not to pay their taxes. How would this situation affect Greece's economic growth? | Greece's economy would be harmed by a lack of an efficient tax system |
| Residents of wealthy countries tend to have longer life expectancies because: | higher per capita real gross domestic product (GDP) growth rates allow for more spending on health care |
| Resources are: | inputs used to produce goods and services |
| Saudi Arabia is an oil-rich country in the Middle East. the nation's food production is very low. Much of its food must be imported from other countries. Does this mean that Saudi Arabia has a very small endowment of natural resources? | No, because Saudi Arabia has lots of petroleum, a fossil fuel, which is also considered a natural resource |
| Technological advances: | introduce new techniques or methods so that firms can produce more with less. |
| The nation of Singapore has no natural resources, imports its water, and is very small. However, it has a very high GDP and a literacy rate of over 95%. How can such a small country with no resources be so prosperous? | Singapore is rich in other resources, like human capital |
| We know that resources are important for economic growth. Which of the following statements about resources is true? | Resources can be natural, like mineral deposits or forests, or human made, like machinery and factories |
| What is the relationship between institutions, such as private property rights, and productive resources in terms of encouraging economic growth? | Private property rights encourage resources to be used in the most productive way |
| Which of the following are the three major categories of resources? | natural resources, physical capital, human capital |
| Which of the following factors is positively correlated with economic growth? | private property rights |
| Which of the following would be classified as a natural resource? | coal |
| Which of the following would be classified as human capital? | obtaining a college degree |
| Why do institutions such as private property rights promote economic growth? | Private property rights create an incentive to maximize the value of one's property, which is not true when property is collectively owned |
| Why would an increase in capital resources lead to an increase in worker productivity? | More capital means that workers have better tools and equipment and can produce more |
| Which of the following factors is positively correlated with economic growth? | political stability and the rule of law |
Created by:
mghamiter