Question 1

Which of the following best explains why economic growth is crucial for improving health outcomes, such as reducing child mortality rates?

Accepted Answer

Economic growth raises GDP per capita, allowing for better nutrition, healthcare, and living conditions, which directly improve survival rates.

Question 2

Suppose Country A has a higher GDP per capita than Country B. According to the study materials, which of the following is most likely true?

Accepted Answer

Country A's workers are more productive, producing more output per worker.

Question 3

Which formula correctly represents labor productivity?

Accepted Answer

$$Y/L$$

Question 4

A country wants to increase its long-run standard of living. Which of the following policies is most likely to achieve this goal?

Accepted Answer

Increasing investment in physical capital and human capital.

Question 5

If a government encourages saving and investment, what is the most likely short-run and long-run effect?

Accepted Answer

Short-run consumption decreases, but long-run productivity and living standards increase.

Question 6

Which of the following best describes the tradeoff involved in investing in education?

Accepted Answer

Investing in education requires sacrificing current income for higher future income.

Question 7

Which of the following is NOT considered an institution that promotes economic growth?

Accepted Answer

Political instability

Question 8

The image showing a stark contrast in nighttime lights between two neighboring countries is used to illustrate the importance of which factor in economic growth?

Accepted Answer

Institutions and policies

Question 9

Which of the following policies is most likely to promote long-run economic growth in a developing country?

Accepted Answer

Encouraging free trade and foreign investment

Question 10

Suppose a country increases its capital per worker ($$K/L) $$but does not improve its technology or human capital. What is the likely outcome?

Accepted Answer

Productivity will increase, but only up to a point due to diminishing returns.

Question 11

Which of the following best explains why technological progress is considered the main driver of long-run increases in living standards?

Accepted Answer

Technological progress allows society to get more output from the same resources.

Question 12

Which of the following is an example of foreign direct investment?

Accepted Answer

A U.S. company builds and operates a factory in Vietnam.

Question 13

If a country adopts inward-oriented policies, such as high tariffs and restrictions on foreign investment, what is the most likely long-run outcome?

Accepted Answer

The country will likely fail to create significant growth.

Question 14

Which of the following equations correctly represents capital per worker?

Accepted Answer

$$K/L$$

Question 15

A government wants to promote research and development (R&D) to boost long-run growth. Which of the following policies would be most effective?

Accepted Answer

Providing tax incentives for private sector R&D.

Question 16

Which of the following best describes the relationship between saving and investment in the context of economic growth?

Accepted Answer

Higher saving leads to higher investment, which increases the capital stock and boosts productivity.

Question 17

Suppose a country has strong property rights, an honest government, and political stability. According to the study materials, what is the likely effect on economic growth?

Accepted Answer

These institutions will promote higher economic growth.

Question 18

Which of the following is a plausible tradeoff faced by a country that chooses to increase investment in physical capital?

Accepted Answer

The country must reduce current consumption to fund investment.

Question 19

Which of the following is an example of technological knowledge as defined in the study materials?

Accepted Answer

A new method for increasing crop yields using AI drones.

Question 20

If a country wants to maximize its long-run economic growth, which combination of policies is most likely to be effective?

Accepted Answer

Promoting education, encouraging free trade, and supporting research and development.

Long-Run Economic Growth: Sources, Policies, and Global Comparisons

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