Economic Growth and Development Quiz

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does Rule 2 state about the growth rate of two variables?

It states that the growth rate of the product of two variables is the sum of their growth rates. (correct)

It states that the growth rate of each variable remains constant regardless of the other.

It states that the growth rate of the ratio of the two variables is their difference.

It states that the growth rate of their product is the difference of their growth rates.

Given that $z = y^3$, what is its growth rate in terms of $g_y$?

The growth rate would be $2g_y$.

The growth rate would be $3g_y$. (correct)

The growth rate would be $g_y^2$.

The growth rate is independent of $g_y$.

In the equation $Y_t = A_t K_t^{2/3} L_t^{1/3}$, what does the growth rate of $Y_t$ depend on?

It depends solely on the sum of the coefficients.

Only on $A_t$ because it is the only non-constant term.

Only on the growth rates of $K_t$ since it has the highest exponent.

The growth rates of $A_t$, $K_t$, and $L_t$ combined. (correct)

If the growth rate of population is 3 percent per year, what would be the correct formula to calculate the population after 100 years?

Population = $7 \text{ billion} (1 + 0.03)^{100}$ Signup and view all the answers

What implication does the growth rate decomposition for $Y_t$ suggest?

It shows that output growth can be isolated into contributions from productivity, capital, and labor. Signup and view all the answers

What is the difference between economic growth and economic development?

Economic growth is measured by GDP, whereas economic development involves social and political improvements. Signup and view all the answers

What was a notable change in household conditions in the U.S. over the last century?

Increase in life expectancy from 50 years to 79 years. Signup and view all the answers

Which of the following statements about the richest countries' growth patterns is true?

Rich countries often exhibit stable and predictable growth rates of around 2 percent per year. Signup and view all the answers

Which characteristic is common among countries that are falling behind in economic growth?

Low life expectancy and high infant mortality rates. Signup and view all the answers

What conclusion can be drawn about Nathan Rothschild's situation compared to modern health advancements?

Modern medicine can effectively treat infections with affordable solutions. Signup and view all the answers

What major transformation has occurred in U.S. households over nearly 150 years?

Almost all households now have access to basic utilities and goods. Signup and view all the answers

What primary focus does the study of economic growth patterns aim to investigate?

The extent to which countries are catching up or falling behind economically. Signup and view all the answers

What percentage of GDP did consumption expenditures account for in 2012?

70 percent Signup and view all the answers

What are net exports primarily defined as?

Exports minus imports Signup and view all the answers

In 2012, investment expenditures made up approximately what percentage of GDP?

13 percent Signup and view all the answers

Which of the following is included in government purchases as part of GDP?

Public schools Signup and view all the answers

What percentage of GDP were imports equal to in relation to the total economy?

17.5 percent Signup and view all the answers

A significant feature of the GDP composition shows a high percentage of which component during WWII?

Government spending Signup and view all the answers

When computing net exports, what crucial detail must be considered regarding consumption?

Imports must be subtracted from total consumption Signup and view all the answers

What is the implication of a recent trade deficit as mentioned?

Current consumption may impact future GDP Signup and view all the answers

How does an American purchasing a foreign product affect GDP accounting?

It counts both in consumption and negatively in net exports Signup and view all the answers

What is the correct definition of capital in the context of production?

Inputs into production that remain after the process, such as factories and equipment. Signup and view all the answers

Which of the following represents an intermediate input in production?

Steel used in automobile manufacturing. Signup and view all the answers

How is net domestic product calculated when computing GDP?

By subtracting depreciation from total GDP. Signup and view all the answers

When using the production approach to GDP, which of the following is true?

Only final goods and services are counted. Signup and view all the answers

What is the implicit compensation for the depreciation of capital?

A portion of income from production. Signup and view all the answers

In the example of the steel company producing steel sold to an automobile company, how much GDP is generated by the steel producer?

$10 million Signup and view all the answers

In terms of value-added, how is the GDP from the automobile producer calculated?

By subtracting intermediate product costs from total revenue. Signup and view all the answers

Why does the construction of a new house count toward GDP?

It represents new production in the economy. Signup and view all the answers

If a used-car dealer sells a previously owned minivan, how does this affect GDP?

It does not change GDP as it is not new production. Signup and view all the answers

What significant change occurred in the living standards of the world's population from 1960 to 2010?

The bulk of the world’s population became substantially wealthier. Signup and view all the answers

How did the fraction of people living in countries with a per capita GDP less than 5% of the 2010 U.S. level change from 1960 to 2010?

It decreased to less than 1 out of 12. Signup and view all the answers

What would have been the expected population below the adjusted poverty level in 2010 if the distribution had remained unchanged from 1960?

More than 4 billion people. Signup and view all the answers

Which two countries are highlighted as major contributors to global economic growth in the past decades?

India and China. Signup and view all the answers

What is the implication of measuring economic progress on a per person basis rather than a per country basis?

It presents a better understanding of individual living standards. Signup and view all the answers

According to the properties of growth rates, what happens if both the numerator and denominator of a ratio grow at the same rate?

The ratio must be constant. Signup and view all the answers

If $z = xy$, what is the relationship between the growth rates of $z$, $x$, and $y$?

$g_z = g_x + g_y$. Signup and view all the answers

If $z = x^a$, what does the average annual growth rate of $z$ become?

$g_z = a imes g_x$. Signup and view all the answers

Which of the following describes the trend in global per capita GDP from 1960 to 2010?

Global per capita GDP has generally increased. Signup and view all the answers

What was the approximate daily income for individuals in countries with a per capita GDP below 5% of the U.S. level in 1960?

$5 per day. Signup and view all the answers

Signup and view all the answers

Study Notes

No information provided to generate study notes. Please provide the text or questions.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on key concepts of economic growth and development with this comprehensive quiz. Explore various factors affecting growth rates, population formulas, and differences between economic growth and economic development. Perfect for students or anyone interested in understanding economic principles.