Macro CH 25 sample test questions

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1 Class: Date: Macro CH 25 sample test questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Economic growth is defined as a. a decrease in the rate of inflation. b. an increase in employment. c. a sustained expansion of production possibilities. d. an increase in the wage rate. e. an increase in the nation's population. 2. Economic growth is a sustained expansion of production possibilities, as measured by the increase in over time. a. real GDP b. population c. inflation d. the price level e. employment 3. Economic growth is defined as equal to the increase in a. employment. b. population. c. real GDP. d. the price level. e. the inflation rate. 4. Economic growth is measured by the growth rate of a. unemployment. b. inflation. c. wages. d. real GDP. e. employment. 5. The growth rate of real GDP is measured by the following formula: a. real GDP in the current year minus real GDP in the previous year. b. real GDP in the previous year minus real GDP in the current year. Ê realgdp in the current year - realgdp in the previous year ˆ c. realgdp in the previous year Ë Á 100. d. (real GDP in the current year + real GDP in the previous year)/2. e. (real GDP in the current year minus real GDP in the previous year) If real GDP was $16 billion last year and is $18 billion this year, what is the growth rate? a percent b percent c percent d. $2 billion e percent 1

2 7. India's real GDP grew from $800 billion in 1996 to $888 billion. What was the growth rate of India's real GDP? a. 10 percent b. 11 percent c. 12 percent d. 13 percent e. 9 percent 8. In 1996, real GDP in the United States was $6,500 billion. In 1997, real GDP in the United States was $7,100 billion. What was the U.S. economic growth rate from 1996 to 1997? a. 9.0 percent b percent c. 0.9 percent d. 8.4 percent e. $600 million 9. In growth theory, the change in a country's standard of living is measured by the change in a. real GDP per person. b. real GDP. c. the nation's capital stock. d. wages per person. e. employment. 10. A measure of growth in the standard of living is the growth in a. real GDP. b. population. c. real GDP minus the growth in population. d. population minus the growth in real GDP. e. employment. 11. Growth in the standard of living is measured by the increase in a. real GDP. b. the Rule of 70. c. employment. d. real GDP per person. e. consumption. 12. The growth rate of real GDP per person equals the a. population growth rate plus the growth rate of real GDP. b. change in the economic growth rate divided by the change in the population growth rate. c. the economic growth rate per person divided by the change in the population growth rate. d. growth rate of real GDP minus the growth rate of the population. e. population growth rate plus the growth rate of real GDP then divided by the initial level of real GDP. 13. If an economy's growth rate of real GDP is 3 percent per year and the growth rate of the population is 2.5 percent per year, the growth rate of real GDP per person is a = 5.5 percent per year. b. [(3 2.5) 2.5] 100 = 20 percent per year. c. [(2.5 3) 3] 100 = 16.6 percent per year. d = 0.5 percent per year. e = 0.5 percent per year. 2

3 14. During 1998, Swaziland had a real GDP growth rate of 1.8 percent and a real GDP growth rate per person of -1.3 percent. These rates indicate that in Swaziland a. there was an error when calculating the growth rates because the growth rate of real GDP per person cannot be negative. b. the population growth rate was negative. c. the population grew at a faster rate than real GDP. d. poverty levels are declining. e. real GDP grew more rapidly than did the population. 15. The Rule of 70 states that the level of a variable will double in a. 70 years. b. the number of years equal to the variable's annual rate of growth divided by 70. c. the number of years equal to 70 divided by the variable's annual growth rate. d. the number of years equal to the variable's annual growth rate minus 70. e. the number of years equal to 70 multiplied by the variable's annual growth rate expressed as a decimal. 16. The Rule of 70, as applied to real GDP growth, can be used to find the a. real GDP growth rate necessary to double growth. b. number of years it takes for the level of real GDP to double. c. growth rate of real GDP. d. number of years it takes for the growth rate of real GDP to double. e. population growth rate necessary to double the GDP growth rate. 17. The Rule of 70 can be used to calculate the a. economic growth rate per month. b. population growth rate per year. c. number of years it would take for the level of any variable to double. d. 70 percent level of the economic growth rate. e. economic growth rate per year. 18. The annual growth rate of an economy is 5 percent. The economy's GDP will double in about years. a. 5 b. 10 c. 12 d. 14 e Using the rule of 70, a sustained 2.5 percent per year real GDP growth rate will a. last for 70 years. b. double the current level of real GDP in about 28 years. c. double the current level of real GDP in about 175 years. d. double the current level of real GDP in about 70 years. e. double the current level of real GDP in about 40 years. 20. If a country experiences a real GDP growth rate of 6 percent, real GDP will double in a. 10 years. b years. c. 14 years. d years. e years. 3

4 21. If it took 20 years for real GDP to double, what was the growth rate of real GDP? a. 4.5 percent b. 3.0 percent c. 3.5 percent d. 4 percent e. 5 percent 22. In this year, Country A has a real GDP per person that is 4 times greater than that of Country B. Country B's growth rate of real GDP per person is 3.5 percent per year. How many years will it take for Country B's real GDP per person to reach the same level that Country A had in this year? a. 10 years b. 20 years c. 40 years d. 60 years e. 56 years 23. Suppose Mexico's real GDP per person in 2003 is $6,000 and the U.S. real GDP per person is $24,000. Mexico has annual growth in real GDP per person of 5 percent. Approximately how many years will it take Mexico to equal $24,000 of real GDP per person? a. 14 years b. 18 years c. 28 years d. 36 years e. 40 years 24. Over the past 100 years, real GDP per person in the United States has grown at an average rate of about per year. a. 1 percent b. 2 percent c. 5 percent d. 10 percent e. 7.5 percent 25. For the world, what period of time experienced the fastest growth rate of real GDP per person? a. around 500 B.C. b. around 400 A.D. c. between 1000 A.D. and 1500 A.D. d. after about 1850 A.D. e. between 1500 A.D. and 1850 A.D. 26. In a small nation to the South, labor productivity last year was $25 per hour and total labor hours were 300 hours. Hence, real GDP was a. $12,000. b. $7,500. c. $27,500. d. $12. e. $900, Aggregate hours show a sustained increase only as a result of a. individuals working more hours. b. a greater percentage of the population entering the workforce. c. an increase in the population. d. increases in overtime work. e. sustained increases in the labor force participation rate. 4

5 28. In the United States, there has been in aggregate hours and, as a benefit of economic growth, in average hours per worker. a. an increase; an increase b. an increase; a decrease c. a decrease; an increase d. a decrease; a decrease e. an increase; no change 29. Real GDP grows when a. labor productivity increases. b. labor productivity decreases. c. aggregate hours decrease. d. there is an increase in mandatory vacation days. e. average hours per worker decrease. 30. Labor productivity equals a. real GDP. b. real GDP per hour of labor. c. the total production of labor. d. aggregate hours divided by real GDP. e. real GDP divided by the amount of human capital. 31. Labor productivity is equal to the quantity of a. real GDP produced by one hour of labor. b. workers employed during one hour. c. real GDP consumed by the total population in one hour. d. real GDP. e. workers who are gainfully employed. 32. The quantity of real GDP produced by one hour of labor is defined as a. real GDP per person. b. the advance in technology. c. the growth rate of technology. d. labor productivity. e. economic growth. 33. An increase in labor productivity a. increases the standard of living.. b. decreases the standard of living. c. might be the result of an increase in aggregate hours. d. generally occurs when physical capital decreases because firms must then hire more workers. e. cannot occur without a corresponding increase in employment. 34. If real GDP is $6,460 billion, the population is million people, and total labor hours are 170 billion, labor productivity is a. $2.63 an hour. b. $2.86 an hour. c. $35,000. d. $38.00 an hour. e. 920 hours. 5

6 35. Real GDP is $9,000 billion and aggregate hours worked is 200 billion. What is the economy's labor productivity? a. $1.80 per hour b. $18.00 per hour c. $2.22 per hour d. $45.00 per hour e. $4.50 per hour 36. If the stock of physical capital (that is machinery, equipment, etc.) and human capital remain the same and the population increases, then a. labor productivity will increase. b. labor productivity will decrease. c. the standard of living will increase. d. the new labor will be more productive. e. real GDP decreases. 37. The widespread adoption of computers in the workplace has likely lead to a. no change in aggregate hours. b. an increase in labor productivity because computers are a capital good. c. a decrease in labor productivity because computers are a capital good. d. a decrease in human capital because computers are physical capital. e. an increase in the supply of labor because people are needed to operate the computers. 38. Workers today are more productive than in the early 1800s because workers today a. have an understanding of time. b. have more capital with which to work. c. don't all work on farms. d. are protected by minimum wage laws. e. work more hours than did workers in the early 1800s. 39. A reason for an increase in labor productivity growth is a. an increase in people's human capital. b. a decrease in the capital stock so that firms must hire more workers. c. growth in the supply of labor. d. an increase in the population so that firms hire more workers. e. an increase in aggregate hours. 40. Human capital refers to the a. accumulated skill and knowledge of human beings. b. accumulated equipment used by human beings. c. accumulation of money by human beings. d. accumulation of money and equipment used by human beings. e. accumulated financial capital people have acquired. 41. Human capital is defined as the a. amount of machinery human beings have. b. number of factories built for human beings. c. accumulated skill and knowledge of human beings. d. accumulated amount of machinery and factories human beings own. e. skills that people are born with. 6

7 42. Labor productivity increases if i. human capital decreases. ii. technology advances. iii. quality of education decreases a. i only. b. ii only. c. iii only. d. Both i and ii. e. Both ii and iii. 43. Thomas Malthus was an economist who contributed to the theory of growth. a. classical b. neoclassical c. new growth d. socialist e. Keynesian 44. The classical theory was developed in the late 18th and early 19th centuries a. and therefore is not accepted today. b. during a time of population decline. c. and has proponents today who fear population growth and overpopulation. d. and cannot be explained using the modern tool of the production function. e. and still applies to the most developed nations today, though not to the less developed nations. 45. Classical growth theory predicts that increases in real GDP per person will a. not last because higher income leads to a population explosion. b. last because higher growth leads to new technology. c. last because people make choices in the pursuit of higher profits. d. not last because higher income encourages smaller families and a lower population growth rate. e. last only if the government directs firms to make more investments in capital and new technology. 46. Classical growth theory predicts that economic growth a. will continue at the classical rate of 3 percent forever. b. will eventually stop because of population growth. c. occurs because of hard-working citizens. d. is merely an illusion. e. decreases the supply of labor. 47. The classical growth theory asserts that a. economic growth will continue indefinitely. b. economic growth and population growth complement each other. c. population growth increases a nation's economic growth. d. population growth will lead to people earning only a subsistence level of income. e. population growth leads to more growth in technology. 7

8 48. In classical growth theory, if the income level is above the subsistence income, a. the economy will keep growing without limit. b. population grows and lowers real income to its subsistence level. c. technological growth occurs and keeps real income above its subsistence level. d. the pursuit of profit will cause economic growth to accelerate. e. None of the above is correct because the classical growth theory asserts that income can never exceed the subsistence level. 49. Which growth theory predicts that even when technology advances, real GDP per person always returns to a subsistence level of income? a. Classical growth theory b. Sustained growth theory c. Neoclassical growth theory d. New growth theory e. Keynesian growth theory 50. Neoclassical growth theory predicts that growth in real GDP is determined by a. population growth and the pace of technological change. b. population growth only. c. choices and the pursuit of wealth. d. technological change only. e. the government's actions. 51. Neoclassical growth theory assumes that technological advances a. have a direct relationship to the level of real income per capita. b. can eliminate diminishing returns of labor and capital. c. are negative if there is a subsistence level of real income but positive otherwise. d. result from chance. e. occurs only when firms can profit from it. 52. The neoclassical growth theory assumes that technological change i. is determined by economic growth. ii. is random and the result of chance. iii. results from people's choices. a. i only. b. ii only. c. iii only. d. Both ii and iii. e. Both i and iii. 53. Empirical evidence suggests that the rate of population growth a. increases as real GDP per person increases. b. decreases as real GDP per person increases. c. does not depend on the level of real GDP per person. d. increases as technology advances. e. drives all economies back to a subsistence level of income. 54. The neoclassical growth theory predicts that a. population growth slows economic growth. b. population growth increases real GDP per person. c. real GDP per person grows as long as technology keeps advancing. d. the growth rate of real GDP influences the rate of technological change. e. eventually people receive only a subsistence level of income. 8

9 55. What economic growth theory assigns a key role to technological growth but has no theory about why technology grows? a. Classical growth theory b. Sustained growth theory c. Neoclassical growth theory d. New growth theory e. Keynesian growth theory 56. The new growth theory asserts that profits are a. permanent, because they are derived from discoveries. b. temporary, because the discoveries that lead to profits are eventually used by all. c. an illusion, since costs are never fully covered. d. permanent, because physical activities can be replicated. e. not an essential component determining whether the economy grows or not. 57. A central theme of the new growth theory is that a. firms don't really experience profit. b. humans can work harder than previously thought. c. the economy doesn't experience diminishing returns. d. firms don't experience diminishing returns. e. the government is more efficient than private markets. 58. In explaining economic growth, new growth theory stresses the role played by a. human choices. b. population moderation. c. women in the workforce. d. the participation rate of elderly workers. e. the government in directing the nation's investments. 59. Which of the following statements is likely to be made by someone who believes in the new growth theory? a. Population growth will limit long-run gains in real GDP per person. b. Competition will encourage discoveries of new ideas leading to greater economic growth. c. Although technological changes increase real GDP, these changes are random and unexplainable. d. Choices made by human capital are likely to be inefficient. e. Economic growth will eventually slow. 60. In new growth theory, growth in real GDP per person occurs because i. human capital grows indefinitely. ii. technology advances as a result of choices individuals make. iii. profit incentives encourage technological change. a. i only. b. ii only. c. iii only. d. Both i and iii. e. i, ii, and iii. 9

10 61. New growth theory asserts that i. human capital grows because of choices. ii. discoveries result from choices. iii. competition brings profits. a. i only. b. ii only. c. iii only. d. Both i and iii. e. Both i and ii. 62. The new growth theory suggests that as the economy grows a. there are only movements along the production function but no shifts in the curve. b. there are only shifts in the production function but no movements along the curve. c. there are both shifts in and movements along the production function. d. there are neither shifts in nor movements along the production function. e. the production function will eventually become obsolete because production will increase so much. 63. New growth theory asserts that will lead us to greater productivity and economic growth. a. new machinery b. government regulation c. unlimited wants d. leisure time e. nothing 64. From the 1960s to 1990s, real GDP grew much faster in than in the United States. a. Africa b. Central and South America c. Hong Kong and Japan d. Central Europe e. Europe's big 4 nations 65. A key reason why some nations show little or no growth is a. overpopulation that overuses limited resources. b. lack of incentives to undertake actions toward growth. c. too much private property not directed by the government. d. patents in rich nations that keep technology only for the rich. e. too much international trade so that all economic growth spills over to foreigners. 66. All of the following are preconditions for economic growth EXCEPT i. property rights. ii. democracy. iii. free markets a. i only. b. ii only. c. iii only. d. Both i and ii. e. i, ii, and iii. 10

11 67. An important condition required for economic growth is a. a democratic government. b. a totalitarian government. c. a libertarian government. d. economic freedom. e. the incentive to limit international trade so that all economic growth remains within the country. 68. A basic precondition necessary to achieve economic growth is a. well-functioning factories. b. well-being of society. c. a well-functioning legal system. d. a well-organized work force. e. a strong central government that directs the nation's research and development activities. 69. Economic freedom a. is not important for nations to grow. b. must come from a democratic government. c. is founded, in part, on the rule of law. d. is created when the nation imposes many regulations on businesses. e. is harmed by having too many property rights. 70. A condition necessary for a country to achieve economic growth is a. high tax rates so the government can purchase a lot of capital equipment. b. strict environmental regulations. c. economic freedom. d. government control of the banking system. e. democracy. 71. Property rights assure people that a. the government will not confiscate their income or savings. b. the government will provide a minimum standard of living. c. the factors of production and goods are owned jointly by the government and the people. d. economic growth will enhance government involvement in the economy. e. international trade will be limited. 72. Jose and Julia were discussing the necessary components to achieve economic growth. Jose stated that the economy must include free markets, specialization and trade, and an ethical judicial system. Julia reminded Jose that another key component is a. freedom of speech. b. freedom of religion. c. a guaranteed high rate of return on savings. d. property rights. e. democracy. 73. Property rights a. don't include intellectual property. b. don't include financial property. c. don't include physical property. d. include physical, financial, and intellectual property. e. slow the economic growth by placing limits on who can use what. 11

12 74. One way to achieve faster growth in GDP per person is to increase the a. participation of women in the workforce. b. employment of teenagers. c. growth rate of human capital. d. growth rate of the population. e. limits on international trade in order to keep more of total spending on domestically produced goods. 75. The following government policies will help achieve faster economic growth EXCEPT a. discouraging saving. b. encouraging research and development. c. establishing and protecting property rights. d. improving the quality of education. e. increasing saving. 76. Retirement savings accounts, such as IRAs, help increase economic growth because a. people have an incentive to work harder and longer hours to save for the future. b. they keep the interest rates high. c. savings finances investment. d. government invests them. e. they encourage international trade. 77. Many economists argue that an incentive to save is a. high income tax rates. b. a tax on consumption rather than on income. c. a tax on income rather than a tax on consumption. d. greater government regulation of the banking and securities industries. e. strengthening the property rights that savers have to the physical capital they purchase. 78. Encouraging international trade will a. slow economic growth when a country is forced to specialize and trade with other countries. b. slow economic growth as many workers lose their jobs to foreign workers. c. speed economic growth as workers diversify their knowledge and limit trade. d. speed economic growth as workers specialize and trade with others. e. speed economic growth because international trade limits the harm done by property rights. 79. If Kenya institutes policies that support economic freedom and growth, it is likely that Kenya will a. immediately reap the benefits of double digit increase in economic growth. b. immediately reap the benefits of a 4 percent to 6 percent increase in economic growth. c. slowly reap the benefits of economic growth as the economy grows over time. d. lose control of the economy and plunge into a long recession. e. suffer from too much competition within its economy. 80. Economic growth in Cuba has been slow; what can best explain the slow growth? a. Lack of economic resources. b. Lack of incentive mechanisms and economic freedom. c. Labor productivity is low. d. A non-democratic form of government. e. Too much competition within the economy. 12

13 Macro CH 25 sample test questions Answer Section MULTIPLE CHOICE 1. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Economic growth 2. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Economic growth 3. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Economic growth 4. ANS: D PTS: 1 DIF: Level 2: Using definitions TOP: Economic growth 5. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Calculating growth rates 6. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Calculating growth rates 7. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Growth rate 8. ANS: A PTS: 1 DIF: Level 2: Using definitions TOP: Growth rate 9. ANS: A PTS: 1 DIF: Level 2: Using definitions TOP: Standard of living 10. ANS: C PTS: 1 DIF: Level 3: Using models TOP: Standard of living 11. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Standard of living 12. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Growth rate Real GDP per person 13. ANS: D PTS: 1 DIF: Level 2: Using definitions TOP: Growth rate Real GDP per person 14. ANS: C PTS: 1 DIF: Level 5: Critical thinking TOP: Growth rate Real GDP per person 15. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Rule of ANS: B PTS: 1 DIF: Level 1: Definition TOP: Rule of ANS: C PTS: 1 DIF: Level 1: Definition TOP: Rule of ANS: D PTS: 1 DIF: Level 3: Using models TOP: Rule of ANS: B PTS: 1 DIF: Level 3: Using models TOP: Rule of ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Rule of ANS: C PTS: 1 DIF: Level 4: Applying models TOP: Rule of ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Rule of ANS: C PTS: 1 DIF: Level 4: Applying models TOP: Rule of 70 1

14 24. ANS: B PTS: 1 DIF: Level 1: Definition TOP: Eye on the past How fast has real GDP per person grown? 25. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Eye on the past How fast has real GDP per person grown? 26. ANS: B PTS: 1 DIF: Level 4: Applying models TOP: Sources of economic growth 27. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Sources of growth Aggregate hours 28. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Sources of growth Aggregate hours 29. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Sources of economic growth Labor productivity 30. ANS: B PTS: 1 DIF: Level 1: Definition TOP: Labor productivity 31. ANS: A PTS: 1 DIF: Level 2: Using definitions TOP: Labor productivity 32. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Labor productivity 33. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Labor productivity 34. ANS: D PTS: 1 DIF: Level 2: Using definitions TOP: Labor productivity 35. ANS: D PTS: 1 DIF: Level 3: Using models TOP: Labor productivity 36. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Labor productivity 37. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Increase in labor productivity Physical capital 38. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Increase in labor productivity Physical capital 39. ANS: A PTS: 1 DIF: Level 2: Using definitions TOP: Increase in labor productivity Human capital 40. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Increase in labor productivity Human capital 41. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Increase in labor productivity Human capital 42. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Increase in labor productivity Technology 43. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Classical growth theory 44. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Classical growth theory 45. ANS: A PTS: 1 DIF: Level 3: Using models TOP: Classical growth theory 46. ANS: B PTS: 1 DIF: Level 3: Using models TOP: Classical growth theory 47. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Classical growth theory 48. ANS: B PTS: 1 DIF: Level 3: Using models TOP: Classical growth theory 2

15 49. ANS: A PTS: 1 DIF: Level 3: Using models TOP: Classical growth theory 50. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Neoclassical growth theory 51. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Neoclassical growth theory 52. ANS: B PTS: 1 DIF: Level 1: Definition TOP: Neoclassical growth theory 53. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Neoclassical growth theory 54. ANS: C PTS: 1 DIF: Level 3: Using models TOP: Neoclassical growth theory 55. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Neoclassical growth theory 56. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: New growth theory 57. ANS: C PTS: 1 DIF: Level 3: Using models TOP: New growth theory 58. ANS: A PTS: 1 DIF: Level 2: Using definitions TOP: New growth theory 59. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: New growth theory 60. ANS: E PTS: 1 DIF: Level 2: Using definitions TOP: New growth theory 61. ANS: E PTS: 1 DIF: Level 1: Definition TOP: New growth theory 62. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: New growth theory 63. ANS: C PTS: 1 DIF: Level 1: Definition TOP: New growth theory 64. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Global economy Gaps or convergence? 65. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Preconditions for growth 66. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Preconditions for growth 67. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Preconditions for growth Economic freedom 68. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Preconditions for growth Economic freedom 69. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Preconditions for growth Economic freedom 70. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Preconditions to economic growth Economic freedom 71. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Preconditions to economic growth Property rights 72. ANS: D PTS: 1 DIF: Level 2: Using definitions TOP: Preconditions for growth Property rights 73. ANS: D PTS: 1 DIF: Level 1: Definition TOP: Preconditions for growth Property rights 3

16 74. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Preconditions for growth Human capital 75. ANS: A PTS: 1 DIF: Level 1: Definition TOP: Policies for faster growth Saving 76. ANS: C PTS: 1 DIF: Level 1: Definition TOP: Policies for faster growth Saving 77. ANS: B PTS: 1 DIF: Level 2: Using definitions TOP: Policies for faster growth Saving 78. ANS: D PTS: 1 DIF: Level 2: Using definitions TOP: Policies for faster growth International trade 79. ANS: C PTS: 1 DIF: Level 2: Using definitions TOP: Faster growth The difference policy makes 80. ANS: B PTS: 1 DIF: Level 4: Applying models OBJ: Integrative TOP: Integrative 4