Economic Growth and Development Theories Quiz

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What is economic growth?

The percentage change in real GDP from one period to another

A measure of how efficiently input factors are used to produce output

The increase in the value of goods and services produced by an economy over time (correct)

A decrease in the value of goods and services produced by an economy over time

What is real GDP?

GDP measured without considering inflation

GDP measured in terms of future prices

GDP adjusted for inflation (correct)

GDP measured in terms of current prices

Which of the following is not an input factor of economic growth?

Capital

Labor

Technology (correct)

Entrepreneurship

What are the factors influencing total factor productivity (TFP)?

Education and infrastructure Signup and view all the answers

Why is economic growth important?

It leads to higher living standards for people Signup and view all the answers

What is the purpose of capital investment for economic growth?

To provide the physical goods used to produce other goods and services Signup and view all the answers

Which factor can lead to increased Total Factor Productivity (TFP) and economic growth?

Technological progress Signup and view all the answers

According to the Rostow model, which stage is characterized by industrialization and technological progress?

Take-off Signup and view all the answers

What is the main role of entrepreneurship in economic growth?

To introduce new products and services Signup and view all the answers

Why is education important for economic growth?

To increase the knowledge of how to produce goods and services Signup and view all the answers

Match the following factors with their influence on total factor productivity (TFP) and economic growth:

Technology = Leads to increased TFP and economic growth Education = Can lead to increased TFP and economic growth Infrastructure = Can lead to increased TFP and economic growth Entrepreneurship = Can lead to increased TFP and economic growth Signup and view all the answers

Match the following stages of economic development with their characteristics according to the Rostow model:

Traditional society = Low level of technology, high proportion in agriculture, subsistence economy Preconditions for take-off = Developing necessary infrastructure and institutions for growth Take-off = Rapid economic growth driven by industrialization and technological progress Drive to maturity = Continued but slower economic growth, shift from manufacturing to services Signup and view all the answers

Match the following factors with their description as determinants of economic growth:

Labor (quality and quantity) = Important determinant of economic growth Capital investment = Essential for economic growth Entrepreneurship = Essential for introducing new products, creating jobs, and driving innovation Total factor productivity (TFP) = Measure of how efficiently input factors are used to produce output Signup and view all the answers

Match the following definitions with their corresponding terms:

Capital investment = Physical goods used to produce other goods and services Entrepreneurship = Ability to identify and exploit new business opportunities Total factor productivity (TFP) = Measure of input factor efficiency in producing output Linear stages of growth models = Economic development models positing stages from traditional society to modern economy Signup and view all the answers

Match the following items with their descriptions related to economic development:

Technology = Knowledge of how to produce goods and services, leads to increased TFP and economic growth Linear stages of growth models = Posit that countries pass through stages from traditional society to modern industrialized economy Infrastructure = Physical and institutional framework supporting economic activity, can lead to increased TFP and economic growth Education = Process of acquiring knowledge and skills, can lead to increased TFP and economic growth Signup and view all the answers

Match the following input factors with their description:

Land = Includes all natural resources like minerals, forests, and arable land Labor = Human input into the production process Capital = Goods produced and used to produce other goods and services Entrepreneurship = The ability to innovate and take risks in starting new businesses Signup and view all the answers

Match the following development factors with their influences on total factor productivity (TFP):

Technology = Improves efficiency and enhances production processes Education = Enhances human capital and contributes to skill development Infrastructure = Facilitates smooth functioning of economic activities and trade Land = Provides natural resources essential for goods and services production Signup and view all the answers

Match the following growth models with their defining characteristics:

Rostow model = Characterized by stages of traditional society, preconditions for take-off, take-off, drive to maturity, and age of high mass consumption Solow model = Emphasizes the role of technology and productivity in economic growth Harrow model = Focuses on the importance of human capital in economic development Nelson-Phelps model = Incorporates the influence of employment and wage setting on economic growth Signup and view all the answers