Chapter 2 : Measuring Economic Growth and Development
MULTIPLE CHOICE
1. GNP or GDP divided by total population provides a measure of:
a.
the wellness index.
c.
per capita income.
b.
the gap between the rich and poor.
d.
the poverty index.
2. More than three-quarters of Angola’s national income is derived from:
a.
cotton.
c.
rubber trees.
b.
oil.
d.
tourism.
3. In 2009, Bangladesh’s GNP was 9 percent higher than its GDP; this occurred due to the fact that:
a.
large numbers of Bangladeshi men and women work abroad.
b.
Bangladesh is rich in ore and mineral deposits.
c.
Bangladesh is subject to frequent and unpredictable changes in weather patterns.
d.
foreign investment has been robust in the country.
4. A country’s nominal GNP for a given year is defined as the total market value of:
a.
labor plus capital plus technical change.
b.
all final goods and services produced.
c.
all final plus intermediate goods and services produced.
d.
all final goods and services consumed.
5. One of the problems in measuring GDP is that family farm production of food for personal
consumption is not included; this is illustrated by the problem of calculating Cambodia’s GDP where
unpaid family workers represent:
a.
75 percent of the labor force.
c.
33 percent of the labor force.
b.
57 percent of the labor force.
d.
9 percent of the labor force.
6. In some nations, illegal activities may even be included when calculating GDP; this is most notable in
Afghanistan where the GDP includes:
a.
military expenses.
c.
money laundering.
b.
child trafficking.
d.
poppy production.
7. A criticism of using GDP to measure growth is that it does not include “social bads”; these include all
of the following EXCEPT:
a.
crime.
c.
inflation.
b.
pollution.
d.
congestion.
8. In order to effectively compare levels of GDP per capita across countries, it is necessary to convert
GDP per capita into a:
a.
common currency.
b.
series of stocks and bonds.
c.
time-line series illustrating business cycles.
d.
GNP per capita.
9. Most economists agree that an effective way of comparing income levels between countries around the
world is through the use of:
a.
employment statistics.
c.
foreign investment.
b.
GDP divided by GNP.
d.
purchasing power parity.
10. The human development index is a composite of three basic measures of human welfare. Which of the
following is NOT a component of the human development index?
a.
life expectancy
c.
infant mortality rate
b.
dollars of income
d.
years of schooling
11. When world GDP (2009) is calculated by converting each nation’s GDP into a common currency
using market exchange rates, world output by low- and middle-income economies account for:
a.
17 percent.
c.
58 percent.
b.
29 percent.
d.
67 percent.
12. For which of the following countries is the divergence between GNP per capita measured at official
exchange rates and at purchasing power parity (PPP) likely to be largest?
a.
Japan
c.
Brazil
b.
United States
d.
Ethiopia
13. Based on Maddison’s research, with an annual world income growth rate of 1.3 percent, average
income doubles in:
a.
21 years.
c.
55 years.
b.
30 years.
d.
90 years.
14. According to Maddison, rapid economic growth in the world’s per capita income as we know it began
around the year:
a.
1000.
c.
1820.
b.
1492.
d.
1914.
15. The 1980s are often referred to as “the lost decade” in:
a.
Asia.
c.
Scandinavia.
b.
the Middle East.
d.
Latin America.
16. Since the year 2000, economic performance in sub-Saharan Africa has improved; this can be attributed
to all of the following reasons EXCEPT for:
a.
improved economic policies and management.
b.
more democratic and accountable governments.
c.
a return to state-directed economic policies.
d.
new technologies.
17. According to economists, the objective of economic growth is to:
a.
increase happiness.
c.
increase development.
b.
provide more choices.
d.
decrease corruption.
18. The total number of Millennium Development Goals established in the year 2000 were:
a.
5.
c.
10.
b.
8.
d.
18.
19. All of the regions will meet Target 1 (to halve the number of poor) EXCEPT:
a.
Europe and Central Asia.
c.
sub-Saharan Africa and South Asia.
b.
the Middle East and North Africa.
d.
South America.
20. The Easterlin paradox concerns itself with the study of:
a.
wealth.
b.
happiness.
c.
environmental damage caused by development.
d.
the demise of the developed nations at the expense of the rapidly developing ones.
TOP: Is Economic Growth Desirable? MSC: Factual
SHORT ANSWER
IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in
pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two
terms and (2) the relationship between them.
1. Gross national product (GNP), gross domestic product (GDP)
ANS:
Answer will vary
2. Exchange rate conversion method, nontraded goods
ANS:
Answer will vary
3. GNP, net economic welfare
ANS:
Answer will vary
4. Economic development, capabilities
ANS:
Answer will vary
5. HDI, GNP per capita
ANS:
Answer will vary
6. MDGs, economic progress
ANS:
Answer will vary
7. Happiness, economic growth
ANS:
Answer will vary
8. Sen, Easterlin
ANS:
Answer will vary