Macroeconomics
Chapter Exam Questions
Course Introduction
Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. This course focuses on the analysis of aggregate indicators such as gross domestic product (GDP), unemployment rates, inflation, and national income to understand economic growth, fluctuations, and policy impacts. Students will explore the roles of government policy, fiscal and monetary measures, and international trade in shaping economic outcomes, while examining real-world issues such as recessions, economic development, and global interdependence. Through theoretical frameworks and empirical data, the course equips students with the tools needed to critically evaluate macroeconomic policy debates and understand the broader economic environment.
Recommended Textbook
Economics 1st Edition by Dean Karlan
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Chapter 1: Economics and Life
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Q1) Which of the following economic decisions would most likely be studied by a macroeconomist?
A)Domino's Pizza decides to provide quantity discounts in order to increase revenue.
B)A local entrepreneur decides to open a Waffle House in the local Walmart parking lot.
C)The government of Estonia implements a flat rate personal income tax for all citizens.
D)Prices for train fares rise as labor unions negotiate higher wage rates.
Answer: C
Q2) Households are vital to the circular flow model in what two ways?
A)They supply factors of production and purchase goods and services.
B)They export goods and services and import goods and services.
C)They vote for political officers and pay taxes.
D)They facilitate exchange between consumers and firms.
Answer: A
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Chapter 2: Specialization and Exchange
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Q1) Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year.Country A has 100 workers.Suppose a worker in Country B can make either 2 iPods or 10 tablets each year.Country B has 200 workers.Country B has the _______________ advantage in the production of tablets,which means they should specialize in
A)comparative;tablets
B)absolute;tablets
C)comparative;iPods
D)absolute;iPods
Answer: A
Q2) If Spain is capable of producing either tapas or soccer balls or some combination of those two products,then:
A)Spain should produce the good it has an absolute advantage in producing.
B)Spain should produce the good it has a comparative advantage in producing.
C)Spain should remain self-sufficient if it can produce both efficiently.
D)Spain should trade only if it possesses the absolute advantage in the production of both goods.
Answer: B
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Chapter 3: Markets
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Q1) The latest news report stated that the housing market is making a comeback and that house prices are on the rise.This information is likely to:
A)increase demand for houses now due to a change in expectations of future prices.
B)decrease demand for houses now due to a change in expectations of future prices.
C)have no effect on the current housing market,but will increase demand in the future.
D)have no effect on the current demand for housing,but will decrease current supply.
Answer: A
Q2) A recent epidemic of mad cow disease caused the government to mandate that thousands of cows be completely destroyed.This will likely cause:
A)the demand for leather shoes to increase.
B)the supply of leather shoes to decrease.
C)the demand and the supply of leather shoes to increase.
D)It will not affect the market for leather shoes.
Answer: B
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Chapter 4: Elasticity
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Q1) Bob got laid off six months ago.He used to go to the movies once a month,but he's only been twice since losing his job.This type of behavior can be measured using:
A)the price elasticity of demand.
B)the price elasticity of supply.
C)the income elasticity of demand.
D)the cross-price elasticity.
Q2) Total revenue is:
A)the amount that a firm receives from the sale of goods and services.
B)the amount that a firm keeps after all expenses are paid.
C)the amount of sales that get reinvested in the firm.
D)the amount a firm receives from dividends.
Q3) Demand tends to be more elastic:
A)when price is high and more inelastic when price is low.
B)when price is low and more inelastic when price is high.
C)when the demand is perfectly inelastic.
D)the higher the quantity demanded.
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Chapter 5: Efficiency
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Q1) Markets can be missing if:
A)there is a lack of technology that would make the exchanges possible.
B)there is a ban on the sale of a particular good.
C)there is a lack of accurate information between potential buyers and sellers.
D)All of these are true.
Q2) Deadweight loss:
A)occurs in markets that are inefficient.
B)occurs when markets are not in equilibrium.
C)is lost surplus due to less market transactions.
D)All of these are true.
Q3) When someone's willingness to pay is the same as the actual price paid for an item:
A)the individual will not purchase the item.
B)the individual's surplus is zero.
C)surplus cannot be maximized.
D)All of these are true.
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Chapter 6: Government Intervention
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Q1) Does a tax on sellers affect the supply curve?
A)Yes,it shifts to the left by the amount of the tax.
B)Yes,it shifts to the right by the amount of the tax.
C)Yes,it shifts up by the amount of the tax.
D)No,there is change in the quantity supplied,but the supply curve does not move.
Q2) Price ceilings are:
A)a legal maximum price.
B)a legal minimum price.
C)a legal maximum quantity that can be sold at a particular price.
D)a legal minimum quantity that can be sold at a particular price.
Q3) Does a subsidy to sellers affect the demand curve?
A)Yes,it shifts demand up by the amount of the subsidy.
B)Yes,it shifts demand to the right by the amount of the subsidy.
C)No,the quantity demanded will increase,but the demand curve does not move.
D)No,the quantity demanded will decrease,but the demand curve does not move.
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Chapter 7: Consumer Behavior
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Sample Questions
Q1) After browsing his cabinets to see what meals he can make,Ken is deciding whether to make nachos or spaghetti for dinner.If Ken makes spaghetti,we can conclude:
A)Ken doesn't like nachos.
B)Ken prefers nachos over spaghetti.
C)Ken will get more utility from having spaghetti for dinner than nachos.
D)None of these is true.
Q2) Revealed preference is:
A)widely accepted and used by economists,psychologists,and anthropologists.
B)unique to economics and somewhat controversial.
C)unique to economics,but accepted by all social sciences.
D)used by many economists,psychologists,and anthropologists,yet remains somewhat controversial.
Q3) A budget constraint:
A)is the same across all individuals with the same income constraints.
B)is different for each individual with the same income constraints.
C)is the same across all individuals with the same tastes and preferences.
D)is different for each individual with the same tastes and preferences.
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Chapter 8: Behavioral Economics: A Closer Look at Decision Making
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Q1) An example of someone who irrationally considers sunk costs when making a decision is most likely:
A)someone who paid $50 for a ticket to a baseball game and ends up sitting through the entire game in the freezing rain without a jacket.
B)a family that pays $20 to enter a state park for the day and leaves after an hour.
C)a family that pays $20 to enter a state park for the day and stays all day.
D)someone who paid $50 for a ticket to a baseball game and ends up sitting through the entire game enjoying himself.
Q2) Matt has $2000 saved up for Spring Break.Over Christmas break he decides to spend $400 of it on gifts instead of putting the gifts on his credit card and gradually replaces it in his Spring Break savings over the next few months.An economist would say this behavior is:
A)rational.
B)irrational.
C)utility minimizing.
D)not observable.
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Chapter 9: Game Theory and Strategic Thinking
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Q1) Game theory is:
A)the study of how people behave strategically under different circumstances.
B)used by economists to evaluate behavior in a variety of settings.
C)a useful tool in predicting strategic behavior.
D)All of these statements are true.
Q2) The famous historical example of the commitment strategy used by Cortes against the Aztecs is sometimes referred to as:
A)"burning your boats."
B)"burning your bridges."
C)"friendly fire."
D)"putting all your eggs in one basket."
Q3) If one player defects in a repeated game,and his opponent is following a tit-for-tat strategy,we can predict the opponent will:
A)defect in the next round.
B)quit the game.
C)cooperate and try to get his opponent to follow.
D)collude.
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Chapter 10: Information
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Sample Questions
Q1) When a lack of information exists for parties to a deal:
A)it is always worth getting more information before making a decision.
B)the cost of acquiring information sometimes is prohibitive and not worth it.
C)an exchange will never happen.
D)the exchange will always happen anyway,with little chance of maximizing surplus.
Q2) One way to solve the problems caused by information asymmetry is:
A)screening.
B)signaling.
C)building a reputation.
D)All of these are solutions to information asymmetry.
Q3) The used car market is:
A)used to describe the "lemons" problem.
B)a perfect example of what happens when there is an imbalance of information present in a market.
C)subject to the problem of adverse selection.
D)All of these statements are true.
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Chapter 11: Time and Uncertainty
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Q1) If you knew that an investment was going to pay you $46,370 in 5 years,and you knew that the annual interest rate over that time would be 3 percent,you could calculate the present value to be:
A)$39,999.
B)$37,000.
C)$41,998.
D)$41,600.
Q2) If you knew that an investment was going to pay you $128 in 5 years,and you knew that the annual interest rate over that time would be 5 percent,you could calculate the present value to be:
A)$99.
B)$90.
C)$105.
D)None of these is true.
Q3) The two big problems facing insurance companies in trying to manage risk are:
A)risk pooling and diversification.
B)risk pooling and adverse selection.
C)adverse selection and moral hazard.
D)moral hazard and diversification.
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Chapter 12: The Costs of Production
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Q1) If a firm stops production,then its:
A)variable costs decrease to zero.
B)fixed costs stay the same.
C)total costs decrease.
D)All of these are true.
Q2) When the slope of the total production curve begins to flatten:
A)the marginal product must be decreasing.
B)diminishing marginal product must be beginning.
C)additional inputs adds less to total production than the inputs added before.
D)All of these are true.
Q3) When economic profits are negative,accounting profits could be:
A)positive.
B)negative.
C)zero.
D)All of these are possible.
Q4) How long is the long run?
A)A defined,set period of time,usually a year
B)However long it would take a firm to vary all of its costs
C)However long it would take a firm to have at least one variable cost
D)None of these defines the long run.
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Chapter 13: Perfect Competition
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Q1) The profit-maximizing level of output for any firm in a perfectly competitive market is to produce where:
A)MC = MR.
B)MC > MR.
C)MC < MR.
D)MR = P*.
Q2) Collusion:
A)is more likely when the threat of market entry is missing.
B)is more likely in perfectly competitive markets.
C)is less likely when the threat of market entry is missing.
D)None of these is true.
Q3) Commodities:
A)are a special type of standardized good.
B)have no product differentiation.
C)are identical regardless of who produced it.
D)All of these are true.
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Chapter 14: Monopoly
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Q1) Diamonds are expensive because:
A)very few diamonds are discovered each year.
B)the seller of most diamonds in the world restricts output.
C)they are a symbol of luxury.
D)they are a form of conspicuous consumption.
Q2) Natural monopolies:
A)capture lowest costs per unit possible.
B)capture profits by restricting output.
C)pose a problem for policy-makers.
D)All of these statements are true.
Q3) The advantages of maintaining monopolies:
A)always outweighs the total welfare costs due to lost surplus.
B)sometimes outweighs the total welfare costs due to lost surplus.
C)never outweighs the total welfare costs due to lost surplus.
D)This is a normative argument that has no right answer.
Q4) A monopolist can maximize profits by:
A)selling as much as he can produce.
B)producing at the level of output at which MR = 0.
C)following the same rules as a perfectly competitive firm.
D)None of these statements is true.
Page 16
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Chapter 15: Monopolistic Competition and Oligopoly
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Q1) A market with many firms that sell goods and services that are close substitutes for one another is called:
A)perfect competition.
B)monopolistic competition.
C)oligopoly.
D)monopoly.
Q2) Monopolistically competitive firms have an incentive to:
A)engage in tactics for bringing in more customers.
B)maximize profits.
C)engage in tactics to differentiate their product.
D)All of these statements are true.
Q3) Because the price effect is smaller when there are _________ firms,each firm will increase its quantity by __________ before the price effect and quantity effect are equal.
A)more;more
B)less;more
C)similar;less
D)more;less
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Chapter 16: The Factors of Production
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Q1) For any competitive labor market,changes that increase the opportunity cost of work will:
A)decrease the labor supply and shift the supply curve left.
B)increase the labor supply and shift the supply curve right.
C)decrease the labor supply and shift the supply curve right.
D)increase the labor supply and shift the supply curve left.
Q2) When considering the factor distribution of income,which of the following income would go to owners of physical capital?
A)Corporate profits
B)Interest
C)Rent
D)All of these go to owners of physical capital.
Q3) A "capitalist" is someone who:
A)owns stock.
B)holds a treasury bond.
C)opens a retirement account.
D)All of these statements are true.
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Chapter 17: International Trade
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Q1) Only a firm with ______________ will be able to make their output profitably.
A)a comparative advantage at producing their output
B)the highest opportunity cost of production
C)an absolute advantage at producing their output
D)None of these is true.
Q2) Over time,technology tends to:
A)spread from country to country,equalizing opportunity costs.
B)set countries apart in terms of productivity.
C)allow developing nations to experience the "catch-up" effect.
D)None of these is true.
Q3) Import standards on specific countries usually address issues affecting:
A)domestic consumers.
B)domestic producers.
C)foreign production practices.
D)They can be used to address any of these.
Q4) If England buys hockey sticks from Canada,it tells us:
A)England has an absolute advantage over Canada in making hockey sticks.
B)Canada has an absolute advantage over England in making hockey sticks.
C)England has the comparative advantage over Canada in making hockey sticks.
D)Canada has the comparative advantage over England in making hockey sticks.
Page 19
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Chapter 18: Externalities
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Q1) When tradable allowances are used to correct negative externalities in a market,the outcome:
A)limits the quantity bought and sold to the efficient level.
B)maximizes surplus.
C)is efficient.
D)All of these statements are true.
Q2) If the revenues from a Pigovian tax are not directed to those who are affected by the externality,the outcome:
A)is efficient and maximizes surplus.
B)is not efficient and does not maximize surplus.
C)is efficient,but does not maximize surplus.
D)is not efficient and maximizes surplus.
Q3) Who is affected when a positive externality becomes internalized in a market?
A)Producers
B)Consumers
C)Those affected by the externality
D)All of these groups would be affected.
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Chapter 19: Public Goods and Common Resources
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Q1) To combat the undersupply of public goods,a solution is:
A)for the government to step in and provide it directly.
B)to place a quota on the consumption of the good.
C)to change social norms around consumption of the good.
D)All of these are effective ways to deal with the undersupply of public goods.
Q2) An example of an excludable good is:
A)ice cream.
B)a movie in a theater.
C)a digital camera.
D)All of these are excludable goods.
Q3) When a good is excludable:
A)it is possible for sellers to prevent its use by those who have not paid for it.
B)one person's consumption prevents or decreases others' ability to consume it.
C)consumers have a perception of scarcity of that good.
D)the government has specific import policies limiting its supply.
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Chapter 20: Taxation and the Public Budget
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Q1) In general,more efficient taxes have:
A)lower administrative burdens.
B)are more complex.
C)less revenues given the size of the tax.
D)All of these statements are true.
Q2) When policy makers are deciding where to place the statutory incidence of a tax,it is helpful to remember that:
A)it will have no effect on the economic incidence of the tax.
B)the economic incidence will fall to the less-elastic party.
C)they can do little to change the economic incidence of the tax.
D)All of these statements are true.
Q3) The tax rate that maximizes the government's revenues:
A)is not the level that is "best" for the economy.
B)is the level that is "best" for the economy.
C)is 30 percent.
D)is 85 percent.
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Chapter 21: Poverty, Inequality, and Discrimination
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Q1) Those who believe that overall economic growth is more important than the distribution of income would say that:
A)if everyone is getting richer,the relative speed of these gains isn't as important.
B)it is fundamentally unjust for some people to have so much when others have so little.
C)if the society is not getting richer,then things can never become more equal.
D)All of these are true.
Q2) Inequality between countries,in terms of differences in their average national incomes,has been:
A)decreasing over recent decades.
B)increasing over recent decades.
C)decreasing since the 1930s.
D)increasing since the 1930s.
Q3) Long-term solutions to communitywide poverty must involve:
A)ways to grow the economy.
B)increasing the value of the currency.
C)democratic leadership.
D)All of these are true.
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Chapter 22: Political Choices
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Q1) The amount of corruption that occurs in a government is hard to measure because: A)it is illegal,and therefore hidden.
B)its costs are mostly indirect and nearly impossible to measure.
C)the benefits subtracted from the costs often go to a small number of people and distort the reality.
D)All of these are true.
Q2) Plurality voting ___________ the ideal voting-system criteria.
A)fails one of B)meets all C)fails two of D)fails all of
Q3) Bureaucratic capture occurs when:
A)lobbyist groups become so powerful that they essentially have a stranglehold on policymakers.
B)professionals from one particular industry hold the majority of positions in one particular government office.
C)industries become halted in their ability to continue operating due to over-regulation of the market.
D)None of these is true.
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Chapter 23: Public Policy and Choice Architecture
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Q1) Commitment devices are:
A)methods to increase the price of your vices.
B)methods to lower the price of your virtues.
C)successful whether weak or strong,depending on the situation.
D)All of these statements are true.
Q2) When it's not clear how to translate available information into something personally meaningful,it's:
A)more likely you'll make a mistake in your choice.
B)less likely you'll make a mistake,given the amount of information.
C)more likely you'll invest more time in making your choice.
D)less likely the choice will have a big impact on you.
Q3) In the arena of decision making,status-quo bias means that the "'default'" option:
A)has a lot of power.
B)is most likely to be chosen.
C)Is the one that will automatically take place if the chooser fails to make an active decision.
D)All of these statements are true.
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Chapter 24: Measuring the Wealth of Nations
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Q1) One of the most crucial ideas in macroeconomics is understanding that:
A)zero unemployment is the best way to achieve economic growth.
B)measuring total expenditures or total income both equal total production of an economy.
C)prolonging economic downturns can be prolonged by fiscal policy.
D)GNP is the most commonly used measurement of total production.
Q2) In the United States the underground economy has been valued at around:
A)7 percent or 8 percent of GDP.
B)2 percent or 3 percent of GDP.
C)5 percent to 6 percent of GDP.
D)9 percent to 10 percent of GDP.
Q3) Mikey likes bagels,so he buys an old pizza shop for $150,000 and spends $10,000 installing new equipment which will allow him to make bagels instead of pizza.How will Mikey's recent purchases affect GDP?
A)Investment will increase $160,000.
B)Investment will increase $150,000,and consumption will increase $10,000.
C)Consumption will increase $150,000,and investment will increase $10,000.
D)Investment will increase $10,000.
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Chapter 25: The Cost of Living
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Q1) The real value of any variable is:
A)its nominal value adjusted for inflation.
B)its nominal value holding the base constant.
C)its nominal value holding the quantity constant.
D)its nominal value hold the basket constant.
Q2) A good that is most likely to be in the producer price index is:
A)gasoline.
B)apples.
C)books.
D)All of these are in the PPI.
Q3) In practice,the three measurements of inflation,the CPI,PPI,and GDP deflator:
A)all closely track each other.
B)are all positively correlated.
C)all measure inflation,but focus on different parts of the economy.
D)All of these statements are true.
Q4) The consumers that the CPI is based on does not include:
A)retired persons.
B)persons living in rural areas.
C)unemployed persons.
D)The CPI does not include any of these.
Page 27
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Chapter 26: Economic Growth
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Q1) Of the $400 billion a year that goes into research and development in the United States,about:
A)$50 billion of the investment takes place at universities and research institutes,and the rest is done by business.
B)$100 billion of the investment is done by government funding,and the rest is done by business.
C)$150 billion of the investment is done by business,and the rest is done by government funding.
D)half of the investment takes place at universities and research institutes,and the rest is done by business.
Q2) If a country has a high level of income,it likely has:
A)a highly productive work force.
B)widespread access to technology.
C)high levels of physical capital.
D)All of these are true.
Q3) When a country continually adds more capital to its existing stock:
A)productivity will increase at a decreasing rate.
B)productivity will decrease at an increasing rate.
C)productivity will decrease at a decreasing rate.
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Chapter 27: Unemployment and the Demand for Labor
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Q1) The labor force consists of people in the working-age population who are:
A)either employed or unemployed.
B)currently working or who would like to work and are actively trying to find a job.
C)not retired,a full-time student,or stay-at-home parent.
D)All of these are true.
Q2) In general,the unemployment rate varies greatly by:
A)educational status.
B)gender.
C)age.
D)All of these are true.
Q3) The role of unions is:
A)unnecessary if the market does a good job of determining fair wages.
B)to provide firms with a mechanism to more efficiently fire less productive workers.
C)gaining power in the United States.
D)All of these statements are true.
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Chapter 28: Aggregate Demand and Aggregate Supply
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Sample Questions
Q1) U.S.goods will become relatively less expensive than goods from other countries if:
A)prices were to increase in the United States only.
B)prices were to decrease in the United States only.
C)prices were to increase in the United States and foreign countries at the same rate.
D)prices were to decrease in the United States and foreign countries at the same rate.
Q2) The government might increase its spending to end a recession because:
A)allowing the short-run aggregate supply to adjust back to the long-run can take a long time.
B)the economy experiences lower prices at the long-run equilibrium.
C)the economy enjoys a higher level of output in the long run.
D)None of these justify why the government might change its spending to end a recession.
Q3) When the U.S.price level increases,we predict a:
A)movement down along the aggregate demand curve.
B)a shift straight up of the aggregate demand curve.
C)a shift to the right of the aggregate demand curve.
D)None of these is true.
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Chapter 29: Fiscal Policy
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Sample Questions
Q1) The model of aggregate demand and aggregate supply can be used to:
A)discuss the pros and cons of income tax cuts.
B)evaluate a tax cut's effect on short run economic fluctuations.
C)assess a tax cut's effect on longer run issues such as the national debt.
D)All of these are true.
Q2) Fiscal policy most directly affects the economy by increasing or decreasing:
A)aggregate demand.
B)short-run aggregate supply.
C)long-run aggregate supply.
D)the money supply.
Q3) In 2008,consumers were mailed a stimulus check in response to the recession.The result showed that Ricardian equivalence:
A)held,as most people spent a substantial share of the money.
B)failed to hold,as most people spent a substantial share of the money.
C)held,as most people saved the money.
D)failed to hold,as most people saved the money.
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Chapter 30: The Basics of Finance
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Sample Questions
Q1) When you own part of a company and share in its profits,we say that you have:
A)equity in that company.
B)credit with that company.
C)intermediary stock in that company.
D)financial diversification in that company.
Q2) A stock is:
A)a financial asset that represents partial ownership of a company.
B)a payment made periodically to all shareholders of a company.
C)an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest.
D)a promise by the bond issuer to repay the loan,at a specified maturity date,and to pay periodic interest at a specific percentage rate.
Q3) Which of the following is more liquid?
A)A privately held company's stock
B)A publicly held company's stock
C)A house
D)A rare painting
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Chapter 31: Money and the Monetary System
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Sample Questions
Q1) If the reserve ratio was 100 percent,then:
A)no lending would occur using deposits.
B)maximum lending would occur.
C)banks would create money in the economy.
D)None of these is true.
Q2) Which of the following would cause the money demand curve to shift to the right?
A)Inflation
B)An increase in interest rates
C)A decrease in GDP
D)A technological advance
Q3) If we wanted to consider all the money that had been "multiplied" in the economy,we would think about:
A)hard money.
B)M1.
C)M2.
D)None of these.
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33
Chapter 32: Inflation
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Sample Questions
Q1) If an economy produces 3,000 units of output with a money supply of $500 and a velocity of 9,we know the price level must be:
A)$1.50.
B)$2.
C)$4.50.
D)$9.
Q2) The idea that aggregate price levels do not affect real outcomes in the economy is called:
A)the neutrality of money.
B)the aggregate price theory.
C)the neutrality of prices.
D)the real output theory.
Q3) High inflation redistributes wealth from:
A)those who save to those who borrow.
B)those who borrow to those who save.
C)those who borrow to banks.
D)banks to those who save.
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34
Chapter 33: Financial Crisis
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Sample Questions
Q1) A rapidly falling stock price can trigger:
A)a flood of margin calls.
B)massive sales of the stock.
C)the price to be pushed down even more.
D)All of these statements are true.
Q2) When the Fed injected newly made money into the economy by buying bonds,it:
A)was practicing quantitative easing.
B)was trying to avoid a deflationary period similar to Japan.
C)inserted over $1 trillion of new money into the economy.
D)All of these statements are true.
Q3) Debt service is the amount:
A)of time and energy banks spend creating loans.
B)of interest payments that need to be paid over the life of a loan.
C)the nation is in debt,expressed as a percent of GDP.
D)that consumers have to spend to pay their debts.
Q4) From 1922 to 1929,the total value of the stock market:
A)more than tripled.
B)decreased by nearly 50 percent.
C)decreased by nearly 90 percent.
D)more than quadrupled.
Page 35
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Chapter 34: Open-Market Macroeconomics
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Q1) If Rhoda in Hungary buys taffy from Matt in Maine for $20,and Matt buys stock in his favorite goulash restaurant in Hungary for $20,then the U.S.:
A)net exports and net capital outflow are both zero.
B)net exports and net capital outflow both equal $20.
C)net exports is zero and net capital outflow is $20.
D)net exports equals $20 and net capital outflow is zero.
Q2) The investment when a firm runs part of its operation abroad or invests in another company abroad is called:
A)portfolio investment.
B)import investment.
C)export investment.
D)foreign direct investment.
Q3) The gains from trade in the U.S.come from:
A)capital goods.
B)consumption goods.
C)industrial supplies.
D)automotive vehicles.
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Chapter 35: Development Economics
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Sample Questions
Q1) Over the past 50 years,the amount given in aid has __________ in dollar terms,___________ in terms of aid as a share of GDP.
A)increased;but has steadily fallen
B)increased;as well as increased
C)decreased;but has increased
D)decreased;and has steadily fallen
Q2) The main conclusion drawn from the criticisms around foreign aid is:
A)trade should be encouraged instead of aid.
B)aid should no longer exist,as it is an inefficient use of dollars.
C)more accountable means of distribution and program evaluation are needed.
D)immigration policies should be loosened and aid should be halted.
Q3) In many countries,the system of titling is:
A)weak,allowing more and faster investment.
B)weak,slowing economic development.
C)strong,slowing the amount of property transfer.
D)strong,slowing economic growth.
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