Ch 7: Economic Growth

Question 1

1. Which of the following are residents of rich
   countries likely to have in greater quantities, or
   better quality, than residents of poor countries?
   a. housing
   b. healthcare
   c. life expectancy
   d. All of the above.

Answer 1

D. All of the above

Question 2

2. Which of the following is a good gauge of
   economic progress?
   a. the level of real GDP per person, but
   not the growth rate of real GDP per
   person
   b. the level of real GDP per person and
   the growth rate of real GDP per
   person
   c. the growth rate of real GDP per
   person, but not the level of real GDP
   per person
   d. neither the level nor the growth rate
   of real GDP per person

Answer 2

c. the growth rate of real GDP per
person, but not the level of real GDP
per person

Question 3

3. Productivity is the amount of goods and
   services
   a. an economy produces. It is not linked
   to a nation’s economic policies.
   b. an economy produces. It is linked to a
   nation’s economic policies.
   c. produced for each hour of a worker’s
   time. It is not linked to a nation’s
   economic policies.
   d. produced for each hour of a worker’s
   time. It is linked to a nation’s
   economic policies.

Answer 3

d. produced for each hour of a worker’s
time. It is linked to a nation’s
economic policies.

Question 4

4. A nation’s standard of living is best measured
   by its
   a. real GDP.
   b. real GDP per person.
   c. nominal GDP.
   d. nominal GDP per person

Answer 4

b. real GDP per person.

Question 5

5. The level of real GDP person
   a. differs widely across countries, but
   the growth rate of real GDP per
   person is similar across countries.
   b. is very similar across countries, but
   the growth rate of real GDP per
   person differs widely across countries.
   c. and the growth rate of real GDP per
   person are similar across countries.
   d. and the growth rate of real GDP per
   person vary widely across countries.

Answer 5

D. and the growth rate of real GDP per
person vary widely across countries

Question 6

6. If one wants to know how the material well-
   being of the average person has changed over
   time in a given country, one should look at the
   a. level of real GDP.
   b. growth rate of nominal GDP.
   c. growth rate of real GDP.
   d. growth rate of real GDP per person

Answer 6

d. growth rate of real GDP per person.

Question 7

7. Countries that grew the fastest over the last
   100 or so years had growth rates of real income
   per person of about
   a. 0.5 percent per year.
   b. 1.5 percent per year.
   c. 2.0 percent per year.
   d. 2.5 percent per year

Answer 7

d. 2.5 percent per year

Question 8

8. Last year real GDP per person in the
   imaginary nation of Olympus was 4,500. The
   year before it was 4,250. By about what
   percentage did Olympian real GDP per person
   grow during the period?
   a. 4.6 percent
   b. 5.2 percent
   c. 5.9 percent
   d. 6.5 percent

Answer 8

c. 5.9 percent

Question 9

9. Last year real GDP in the imaginary nation of
   Populia was 907.5 billion and the population
   was 3.3 million. The year before real GDP was
   750 billion and the population was 3 million.
   What was the growth rate of real GDP per
   person during the year?
   a. 10 percent
   b. 14 percent
   c. 17 percent
   d. 21 percent

Answer 9

a. 10 percent

Question 10

10. Last year the imaginary nation of Freedonia
    had a population of 2,700 and real GDP of
    16,200,000. This year it had a population of
    2,500 and real GDP of 14,640,000. What was
    the growth rate of real GDP per person
    between last year and this year?
    a. -2.4 percent
    b. -0.7 percent
    c. 4.4 percent
    d. 5.2 percent

Answer 10

a. -2.4 percent