1) The Dutch Disease refers to (a) The impact on non-tropical diseases on econom
ID: 1131725 • Letter: 1
Question
1) The Dutch Disease refers to
(a) The impact on non-tropical diseases on economic growth in Europe
(b) High levels of unemployment
(c) The impact of natural resource extraction on other export industries and economic growth
(d) Weak institutions and their impact on growth
(e) all of the above
2) If all other factors, including human capital, were the same, then compared with Europe, the rate of return on investment in emerging market economies should be
(a) higher, signaling a greater need for new plants and equipment
(b) lower, due to a tradition of central planning
(c) less variable, reflecting less idiosyncratic risk
(d) approximately the same, reflecting competitive pressure
(e) indeterminate, because the emerging markets are not in equilibrium
3) Social capital includes
(a) rent seeking
(b) corruption
(c) public infrastructure
(d) the internet
(e) civic mindedness
4) Within which of the following groupings has convergence occurred in recent years?
(a) the provinces of Canada
(b) the 50 US states
(c) Japanese prefectures
(d) Northern and Southern Italy
(e) all of the above
(a) The impact on non-tropical diseases on economic growth in Europe
(b) High levels of unemployment
(c) The impact of natural resource extraction on other export industries and economic growth
(d) Weak institutions and their impact on growth
(e) all of the above
Explanation / Answer
Answer 1- The Dutch Disease refers to - all of the above. The impact of natural resource extraction on other export industries growth. ( in economics, the Dutch Disease is the causal relationship between the increase in the economic development of a specific sector and decline in the other sector). High levels of unemployment ( Dutch Disease has two main results: a decrease in the price competitiveness of exports of the affected country's manufactured goods and an increase in the number of imports. In the long run these factors can create the higher level of unemployment).
Answer 3- Social capital includes public infrastructure.
Answer 4- within which of the following grouping has convergence occurred in recent years - all of the above ( economic convergence exits when two or more economies tend to reach a similar level of development and wealth).
Answer 2- If all the factors, including human capital, were the same, then compared with Europe, the rate of return on investment in emerging market economies should be higher signaling a greater need for new plants and equipment.
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