ECON 214 quiz 4 solutions complete answers

ECON 214 quiz 4 solutions complete answers 

 

In 2010, per capita real gross domestic product (GDP) in the United States was roughly $46,000. In 2011, per capita real GDP in the United States was roughly $48,400. Therefore, between 2010 and 2011, the rate of economic growth in the United States was:

 

A(n) _____________ in the amount of resources will tend to _____________ economic growth.

 

From 2006 to 2010, per capita real gross domestic product (GDP) in Croatia grew an average of 1.08% per year. At that rate, according to the Rule of 70, in roughly how many years will the Croatian economy double in size?

 

Nathan owns a coffee shop. He wants to increase the weekly number of coffee drinks he sells, and he wants to use a technological advance to do so. ______________ would represent a technological advance at his coffee shop.

 

Which of the following statements best describes the average standard of living for much of human history, prior to the Industrial Revolution?

 

Residents of poor countries tend to have fewer automobiles per capita because:

lower per capita real gross domestic product (GDP) growth rates allow for less spending on 

 

From 2006 to 2010, per capita real gross domestic product (GDP) in India grew an average of 7.11% per year. At that rate, according to the Rule of 70, in roughly how many years will the Indian economy double in size?

 

Average income in Western Europe in 1600 was roughly $1,400 per year, while in Latin America, it was less than half that. Which of the following best explains this difference in average income?

 

Krista owns a hair salon. She wants to increase the number of clients she serves each month, so she knows she needs to acquire more resources. Which of the following actions would represent an increase in the human capital resource at her hair salon?

 

In what way did Henry Ford’s use of the assembly-line method of production represent an advance in technology in automobile manufacturing?

 

The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are:

 

Lauren owns a bakery. She wants to increase her daily production of baked goods, and she wants to use a technological advance to do so. _______________ would represent a technological advance at her bakery.

 

From 2006 to 2010, per capita real gross domestic product (GDP) in Japan grew an average of 0.46% per year. At that rate, according to the Rule of 70, in roughly how many years will the Japanese economy double in size?

 

Long-run per capita world income growth was basically flat until around what year?

 

What is the relationship between institutions, such as private property rights, and productive resources in terms of encouraging economic growth?

 

Economic growth is defined as:

           

Real per capita gross domestic product (GDP) is defined as:

           

According to the textbook, which of the following countries is not considered a “wealthy nation”?

           

According to the World Bank, the 31 wealthiest countries in the world tended to have much lower rates of ___________ and much higher rates of ___________ when compared to the 40 poorest countries.

           

Higher rates of economic growth are negatively correlated with:

           

Per capita real gross domestic product (GDP) is higher in the United States than in Mexico. Based on that, we could predict the United States to have a higher rate of ___________ and a lower rate of ___________.

           

An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person.

           

Residents of wealthy countries tend to have longer life expectancies because:

           

Residents of poor countries tend to have higher rates of infant mortality because:

           

Average income in Western Europe in 1600 was roughly:

           

Average world income began to increase rapidly during:

           

In 1800, the average income of U.S. citizens was roughly:

           

In 2000, annual real per capita gross domestic product (GDP) in the United States was around ___________, whereas in China, it was around ___________.

           

In 2000, annual real per capita gross domestic product (GDP) in Western Europe was around ___________, whereas in India, it was around ___________.

           

 

Average world income began to rapidly rise during the Industrial Revolution because:

           

If you earn a subsistence-level income, much of your time is spent acquiring:

           

In 1350, average world income was roughly:

           

If an economy experiences economic growth, does that mean that everyone in that economy will be better off?

           

Access to lifesaving medicine is very limited in parts of Africa; as a result, over 10% of children do not reach the age of five. What effect would this have on economic growth in Africa?

           

Access to lifesaving medicine is very limited in parts of Africa; as a result, over 10% of children do not reach the age of five. What effect would an increase in medical aid to African children have on overall economic growth for the continent?

           

In 2010, U.S. gross domestic product (GDP) was roughly $14.6 trillion. Given that the U.S. population was roughly 308 million people, per capita GDP in the United States in 2010 was roughly:

           

In 2011, Canada’s gross domestic product (GDP) was roughly $1.396 trillion. Given that Canada’s population was roughly 33.4 million people, per capita GDP in Canada in 2011 was roughly:

           

In 2012, U.S. gross domestic product (GDP) was roughly:

           

Economic growth equals the percent change in nominal gross domestic product (GDP) minus:

           

The percent change in real per capita gross domestic product (GDP) equals:

           

From 2011 to 2012, nominal gross domestic product (GDP) in the United States increased by:

           

From 2011 to 2012, real gross domestic product (GDP) in the United States increased by:

           

The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals:

           

The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are:

           

From 2011 to 2012, U.S. real GDP increased by 2.2% and the U.S. population grew by 1%. Therefore, per capita real GDP in the United States increased by:

           

Nominal gross domestic product (GDP) is a poor measure of economic growth because:

           

Change in per capita real gross domestic product (GDP) is the best measure of economic growth because:

           

Annual real per capita gross domestic product (GDP) in the United States was roughly $44,000 in 2000. If it grew by 3% the following year, by 2001 the annual real per capita GDP would be:

           

From 2009 to 2010, nominal gross domestic product (GDP) in the United States grew by 3.8%. Given that prices increased by 1% and the population grew by 1%, we know that per capita real GDP grew by:

           

From 2009 to 2010, nominal gross domestic product (GDP) in the United States grew by 3.8%. Given that prices increased by 1% and per capita real GDP grew by 1.8%, we know that the population grew by:

           

From 2009 to 2010, nominal gross domestic product (GDP) in the United States grew by 3.8%. Given that the population grew by 1% and per capita real GDP grew by 1.8%, we know that prices increased by:

           

In 2010, real gross domestic product (GDP) in the United States was roughly $14.6 trillion. In 2011, real GDP in the United States was roughly $15.1 trillion. Therefore, between 2010 and 2011, real GDP grew by:

           

In 2011, per capita real gross domestic product (GDP) in Mexico was roughly $10,100. If Mexico experienced economic growth of 4.8% in 2012, per capita real GDP would increase to:

           

Annual real per capita gross domestic product (GDP) in China was roughly $5,200 in 2000. If it grew by 10% the following year, by 2001 the annual real per capita GDP would be:

           

Annual real per capita gross domestic product (GDP) in India was roughly $2,900 in 2000. If it grew by 8% the following year, by 2001 the annual real per capita GDP would be:

           

Annual real per capita gross domestic product (GDP) in Western Europe was roughly $31,000 in 2000. If it grew by 4% the following year, by 2001 the annual real per capita GDP would be:

           

From 2009 to 2010, per capita real gross domestic product (GDP) in the United States grew by 1.8%. Given that prices increased by 1% and the population grew by 1%, we know that nominal GDP grew by:

           

In 2010, per capita real gross domestic product (GDP) in Germany was $40,197.67. By 2011, it had increased to $43,741.55. At what rate did Germany’s economy grow in that time?

           

In 2007, per capita real gross domestic product (GDP) in Brazil was $9,893.92. By 2008, it had increased to $10,525.58. At what rate did Brazil’s economy grow in that time?

           

In 2005, per capita real gross domestic product (GDP) in Angola was $3,328.10. By 2006, it had increased to $4,034.31. At what rate did Angola’s economy grow in that time?

           

In 2009, per capita real gross domestic product (GDP) in Croatia was $10,059.68. By 2010, it had increased to $10,257.71. At what rate did Croatia’s economy grow in that time?

           

In the Republic of Yemen, per capita real gross domestic product (GDP) in 2004 was $2,109.27. By 2005, it had increased to $2,203.05. At what rate did Yemen’s economy grow in that time?

           

In 1998, per capita real gross domestic product (GDP) in Thailand was $4,444.19. By 1999, it had increased to $4,695.22. At what rate did Thailand’s economy grow in that time?

           

If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP), what would you be missing?

           

When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because:

           

When computing economic growth, changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because:

           

 From 2009 to 2010, nominal gross domestic product (GDP) in the United States increased by 3.8%. Does this mean that the U.S. economy actually grew during that time period?

           

If your income increases at a rate of 2% per year, how long will it take to double your income?

           

James has worked for the same company his entire life. His current income is $100,000 per year. When he was originally hired, he made $50,000 per year. The company has given James a consistent raise of 2% every year. How long has James been with the company?

           

From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 1.8%. At that rate, according to the Rule of 70, in roughly how many years will per capita real GDP double?

           

From 2006 to 2010, per capita real gross domestic product (GDP) in China grew an average of 10.62% per year. At that rate, according to the Rule of 70, in roughly how many years will Chinese per capita real GDP double in size, beginning in 2006?

           

From 2006 to 2010, per capita real gross domestic product (GDP) in the Philippines grew an average of 3.16% per year. At that rate, according to the Rule of 70, in roughly how many years will the Filipino economy double in size?

           

From 2006 to 2010, per capita real gross domestic product (GDP) in Egypt grew an average of 4.8% per year. At that rate, according to the Rule of 70, in roughly how many years will the Egyptian economy double in size?

           

From 2006 to 2010, per capita real gross domestic product (GDP) in Ethiopia grew an average of 7.99% per year. At that rate, according to the Rule of 70, in roughly how many years will the Ethiopian economy double in size?

           

From 2006 to 2010, per capita real gross domestic product (GDP) in Poland grew an average of 4.71% per year. At that rate, according to the Rule of 70, in roughly how many years will the Polish economy double in size?

           

An increase in ________________ would lead to an increase in long-run economic growth.

           

Resources are:

           

The inputs used to produce goods and services are also known as:

           

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:

           

Which of the following are the three major categories of resources?

           

We know that resources are important for economic growth. Which of the following statements about resources is true?

           

Saudi Arabia is an oil-rich country in the Middle East. Much of the country is covered by desert, meaning that 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?

           

Japan is a nation of over 6,800 islands, none of which is very large. The largest island, Honshu, is roughly the same size as the state of Montana in the western United States. Does this mean that Japan is destined to have low economic growth and standards of living?

           

Which of the following would be classified as a natural resource?

           

An example of physical capital is:

           

Lauren owns a bakery. She wants to increase her daily production of baked goods, so she knows she needs to acquire more resources. Which of the following actions would represent an increase in the physical capital resource at her bakery?

           

Krista owns a hair salon. She wants to increase the number of clients she serves each month, so she knows she needs to acquire more resources. Which of the following actions would represent an increase in the physical capital resource at her hair salon?

           

A(n) _____________ in capital goods should ____________ worker productivity.

           

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:

           

Why would an increase in capital resources lead to an increase in worker productivity?

           

Which of the following would be classified as human capital?

           

 Lauren owns a bakery. She wants to increase her daily production of baked goods, so she knows she needs to acquire more resources. Which of the following actions would represent an increase in the human capital resource at her bakery?

           

Lauren owns a bakery. She wants to increase her daily production of baked goods, so she knows she needs to acquire more resources. Which of the following actions would represent an increase in the human capital resource at her bakery?

           

Steve owns a bike shop. He wants to increase the number of bikes he sells each month, so he knows he needs to acquire more resources. Which of the following actions would represent an increase in the human capital resource at his bike shop?

           

Steve owns a bike shop. He wants to increase the number of bikes he sells each month, so he knows he needs to acquire more resources. Which of the following actions would represent an increase in the human capital resource at his bike shop?

           

 A firm’s human capital would increase with:

           

An increase in human capital would tend to:

           

“Living standards” refer to the well-being of the residents of a country. Generally speaking, higher economic growth leads to higher living standards. But higher living standards today can further contribute to economic growth in the future. Which of the following aspects of higher living standards would contribute most to future economic growth?

           

Which of the following represents the technology used in a classroom?

           

Steve owns a bike shop. He wants to increase the number of bikes he sells each week, and he wants to use a technological advance to do so. _______________ would represent a technological advance at his bike shop.

           

Krista owns a hair salon. She wants to increase the number of clients she serves each month, and she wants to use a technological advance to do so. ______________ would represent a technological advance at her hair salon.

           

In economics, technology is defined as:

           

Technological advances:

           

An advance in technology allows a firm to produce ___________ output with ___________ resources.

           

All countries have some resources and technology available to them. The ones that grow fastest are the ones that:

           

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?

           

As they relate to economic growth, institutions are:

           

In 1950, residents in Liberia were wealthier than those in Taiwan. Today, per capita gross domestic product (GDP) in Taiwan is more than 20 times that of Liberia. Which of the following best explains why Taiwan is now so much wealthier than Liberia?

           

Liberia, a very poor nation in West Africa, is relatively abundant in resources such as mahogany and rubber tree forests, iron-ore deposits, and diamonds. If Liberia is so rich in valuable resources, why is it still so impoverished?

           

One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has:

           

Today, not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP). The regions that have higher levels of real per capita GDP probably also have:

           

The island of Hispaniola, located in the Caribbean, is divided roughly in half by the two countries that occupy it. The western half is the country of Haiti, and the eastern half is the country of the Dominican Republic. In 2011, per capita real gross domestic product (GDP) in Haiti was roughly $740. In the Dominican Republic, it was almost $9,300. What most likely explains this difference?

           

You are an economics consultant and have been contacted by an official from a developing country. She tells you that her country’s economy is currently growing at 2% per year. She asks you how long it will take for her country’s economy to double in size; you tell her it will take 35 years. She then asks you what the government can do to shorten the time necessary to double the size of the country’s economy. What should you tell her?

           

Between 2006 and 2010, per capita real gross domestic product (GDP) in China grew at an average rate of 10.62% per year. In contrast, its economy only grew by an average rate of 0.25% from 1961 to 1965. Which of the following factors would have contributed most to this rapid escalation in growth?

           

Is having abundant resources an absolute guarantee of economic growth and prosperity?

           

Which of the following is an example of an institution that promotes economic 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. Previously, all food was collectively farmed and shared. How did this basic reform improve China’s economic growth?

           

Which of the following factors is negatively correlated with economic growth?

           

Why do institutions such as private property rights promote economic growth?

           

In 1950, Brazil’s economy was roughly the same size as Nicaragua’s. Today, Brazil’s economy is almost five times as large as Nicaragua’s. Which of the following best explains this difference?

           

In 1950, residents in Liberia were wealthier than those in Taiwan. Today, per capita gross domestic product (GDP) in Taiwan is more than twenty times that of Liberia. How would private property rights help explain why Taiwan is now so much wealthier than Liberia?

           

Many police officers in Mexico have been found to be working for drug traffickers, providing them with protection and warning them of raids. As a result, 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?

           

Which of the following factors is positively correlated with economic growth?

           

Competitive markets contribute significantly to economic growth because:

           

Recently, Greece underwent an economic crisis. While there are numerous factors that contributed to the 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?

           

The nation of Singapore has no natural resources to speak of, must import its water, and is very small in land mass. However, it has a very high real per capita gross domestic product (GDP) and a literacy rate of over 95%. How can such a small country with no resources be so prosperous?