QUESTION 1 Real per capita GDP in China in 1959 was about $350, but it doubled t
ID: 1169062 • Letter: Q
Question
QUESTION 1
Real per capita GDP in China in 1959 was about $350, but it doubled to about $700 by 1978, when Deng Xiao Ping started market reforms. What was the average annual economic growth rate in China over the 20 years from 1959 to 1978?
3.5%
20%
100%
140%
10.5 points
QUESTION 2
Real per capita GDP in China in 1959 was about $350, but it doubled to about $700 by 1978, when Deng Xiao Ping started market reforms. Chinese per capita real GDP doubled again in only seven years, reaching $1,400 by 1986. What was the average annual economic growth rate between 1979 and 1986?
3.5%
10%
100%
700%
10.5 points
QUESTION 3
The table shown here indicates world economic growth rates for specific historical eras. During which of the following time periods will it take real per capita GDP approximately 109 years to double?
Years
Growth rate
AD 1–1800
0.02%
1800–1900
0.64%
1900–1950
1.04%
1950–2000
2.12%
AD 1–1800
1800–1900
1900–1950
1950–2000
10.5 points
QUESTION 4
Use the data in the table to compute economic growth rates for the United States from 2008 to 2009. Note that all data is from the end of the year specified.
Date
Nominal GDP (billions of current $)
GDP deflator
Population growth
2007
$14,061.8
106.30
1.01%
2008
$14,369.1
108.62
0.93%
2009
$14,119.0
109.61
0.87%
2010
$14,660.4
110.66
0.90%
–1.74%
–3.52%
–0.91%
0.91%
1.74%
3.52%
10.5 points
QUESTION 5
Why are technological innovations often clustered in particular locations?
Climate
Institutions
Mortality rates
Okun’s Law
Aggregate demand
10.5 points
QUESTION 6
For each of the following policies, select the type of resource that is the primary focus of the policy.
(i) Aid from the IMF for the education for education of technology workers.
(ii) A piece of legislation banning drilling for oil in Alaska.
(iii) Laws mandating school attendance for children younger than 18.
(iv) State tax credits for the construction of new company headquarters within the state.
(i) physical capital; (ii) natural resources; (iii) human capital; (iv) human capital
(i) human capital; (ii) physical capital; (iii) natural resources; (iv) physical capital
(i) human capital; (ii) physical capital; (iii) human capital; (iv) natural resources
(i) human capital; (ii) natural resources; (iii) human capital; (iv) physical capital
10.5 points
QUESTION 7
Which of the following countries has almost no natural resources and agriculture of its own, has one of the world’s lowest unemployment rates, a literacy rate of 96%, a per capita GDP of over $35,000, and one of the densest populations per square mile on the planet?
The United States
Switzerland
Singapore
Zimbabwe
Malaysia
10.5 points
QUESTION 8
Using the rule of 70, select all of the following that are true.
A country with an annual population growth rate of 2% will double its population in 17.5 years.
A job with a starting salary of $50,000 and a guaranteed annual raise of 2% will have a salary of $100,000 in 35 years.
If the economic growth rate is 7%, per capita GDP will double in 10 years.
If hyperinflation causes a country’s price level to double every 2 years, average yearly inflation is 140%.
10.5 points
QUESTION 9
Select all of the following that are resources, or factors of production.
Water
Tractors
Susan, who can use word-processing software
Oxygen
Sewing machines
10.5 points
QUESTION 10
Select all of the following that are natural resources.
Workers
Cardboard
Trees
Hammers
Iron ore
3.5%
20%
100%
140%
Explanation / Answer
1.
Apply the following rule:
Annual growth rate = (70/Number of years it takes Real per capita to double)%
= (70/20)%
= 3.5%
2.
Apply the following rule:
Annual growth rate = (70/Number of years it takes Real per capita to double)%
= (70/7) %
= 10 %
3.
Apply the following rule:
Number of years it takes Real per capita to double = 70/annual growth rate
The correct option here is 1800-1900 because 70 divided by 0.64 equals approximately 109.
4.
Real GDP in 2008 = $14,369.1/108.62 = 132.29
Real GDP in 2009 = $14,119/109.61 = 128.81
Growth rate in Real GDP = 100(128.81 – 132.29)/ 132.29 = – 2.63%
Growth rate in Real GDP per capita = Growth rate in Real GDP – population growth rate
= – 2.63% – 0.87%
= – 3.50%
which is very close to 3.52%.
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