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Economic Growth

Total questions: 107

Worksheet time: 55mins

Name
Class
Date
1.

Economic growth is a situation where an economy's real GDP increase.

a)

True

b)

False

2.

Actual economic growth is a situation where an economy's growth is fueled by high total spending in an economy.

a)

True

b)

False

3.

Potential economic growth is a situation where an economy's productive capacity improved.

a)

True

b)

False

4.

AD curve shift to right to show potential economic growth

a)

True

b)

False

5.

AD curve shift to right to show actual economic growth

a)

True

b)

False

6.

LRAS curve shift to right to show potential economic growth

a)

True

b)

False

7.

Which of the following is the reason for an actual economic growth to occur?

a)

Quality of education improved

b)

Better technology used

c)

Household's income level increase

d)

Discovery of new resources

8.

Which of the following are the reasons for a potential economic growth to occur?

a)

Quality of education improved

b)

Better technology used

c)

Household's income level increase

d)

Discovery of new resources

9.

Economic growth always improve one's living standard.

a)

True

b)

False

10.

Achieving economic growth is one of the government objectives.

a)

True

b)

False

11.

The UAE produced its own ......... for cars.

a)

Gasoline

b)

Electricity

c)

Money

12.

The ........... helps people to live comfortably.

a)

Money

b)

Buildings

c)

Infrastructure

d)

Mall

13.

GDP stands for?

a)

Garden Darter Plant

b)

Gross Domestic Product

c)

Grapes Domino Pizza

d)

Garbanzos Domino Pizza

14.

A place where business pay little or no tax.

a)

Tax-Free Zone

b)

Business Bay

c)

Free Zone

d)

Hypermarket

15.

A........ is a plant where crude oil is purified into petroleum.

a)

Petrol Station

b)

Petrol Factory

c)

A High

d)

Refinery

16.

Free zone is the basic physical and organizational structures and facilities.

a)

True

b)

False

17.

oil refinery is an industrial process where crude oil is transformed into more useful products such as petroleum.

a)

True

b)

False

18.
Economic growth measures the
a)
a)     Growth of productivity
b)
b)     Increase in nominal income
c)
c)     Increase in output
d)
d)     None of the above
19.
Which of the following explains the term economic growth
a)
a)     Increase in per capita production
b)
b)     Increase in per capita real income
c)
c)     Structural change in the economy
d)
d)     All of the above
20.
Economic growth can be measured by
a)
a)     The CPI
b)
b)     The CBI
c)
c)     GDP
d)
d)     MPC
21.
When an economy produces more output per capital the economy is said to be having
a)
a)     Inflation
b)
b)     Economic growth
c)
c) Economic planning
d)
d)     Living standard
22.
Which of following statement is true about the Economic Growth
a)
a) It refers to increase in Gross Domestic Product (GDP)
b)
b) It refers to the long and sustained rise in real Gross Domestic Product (GDP)
c)
c) It is characterized by fall in unemployment rate
d)
d)     Rise in GDP on monetary term
23.
With economic growth, the proportion of labour-force engaged in agriculture
a)
a)     Increases
b)
b)     Decreases
c)
c)     Remains unaffected
d)
d)     Changes in an uncertain manner
24.
The capital-output ratio in a country during the different phases of growth
a)
a)     Remains unchanged
b)
b)     Fluctuates widely
c)
c)     Changes within narrow limits
d)
d) Shows a secular declining trend
25.
Among the following determinants of growth, which one is a non-economic factor
a)
a)     Natural resources
b)
b)     Population growth
c)
c)     Favourable legislation
d)
d)     Capital accumulation
26.
The rate of growth of an economy mainly depends upon
a)
The rate of growth of the labour force
b)
b)The proportion of national income saved and invested
c)
c) The rate of technological improvements
d)
d)     All of the above
27.
Economic growth can be seen by an outward shift of
a)
a)     The Production Possibility Frontier
b)
b)     The Gross Domestic Barrier
c)
c)     The Marginal Consumption Frontier
d)
d)     The Minimum Efficient Scale
28.
Potential growth measures
a)
a)     The growth of the fastest economy in the world
b)
b)     The fastest growth an economy has ever achieved
c)
c) The present rate of growth of an economy
d)
d)     The rate of growth that could be achieved if resources were fully employed
29.
To boost economic growth the government is most likely to
a)
a)     Increase interest rates
b)
b)     Increase taxation rates
c)
c)     Provide incentives to invest
d)
d)     Provide incentives to save
30.
In a recession, GDP
a)
a)     Grows negatively
b)
b)     Grows slowly
c)
c)     Grows by 0%
d)
d)     Grows rapidly
31.
In a boom
a)
a)     Unemployment is likely to fall
b)
b)     Prices are likely to fall
c)
c)     Demand is likely to fall
d)
d)     Imports are likely to fall
32.
Economic growth in India will happen necessarily if there is
a)
a)     Population growth
b)
b)     Capital formation
c)
c)     Technical progress in the global economy
d)
d)     All the above
33.
The concept of economic growth is
a)
a)     Identical with the concept of economic development
b)
b)     Narrower than the concept of economic development
c)
c)     Wider as compared to that of economic development
d)
d)     Unrelated to the concept of economic development
34.
Which of the following is generally regarded as the true index of economic growth
a)
a)     An increase in national income at constant prices during a year
b)
b)     A sustained increase in real per capita income
c)
c)     An increase in national income at current prices over time
d)
d)     An increase in national income along with a corresponding increase in population
35.
Sustainable economic growth depends upon
a)
a)     Investment, not saving
b)
b)     Saving, not investment
c)
c)     Both saving and investment
d)
d)     Neither saving nor investment
36.
Balanced growth implies
a)
a)     Simultaneous development of a variety of activities, which support one another
b)
b)     Equal allocation of resources to different sectors
c)
c)     Different sectors growing at their natural rates of growth
d)
d)     Uniform rate of growth of output over time
37.
Which of the following about strategy of balanced growth is right
a)
a)     Simultaneous investment in all sectors
b)
b)     All sectors are independent
c)
c)     Both
d)
d)     None
38.

What does Gross Domestic Product

mean?

a)

The total value of all goods and services a country imports.

b)

The total value of all goods and services a country exports.

c)

The total value of all goods and services produced within a country in one year.

d)

The net loss in profits within a country due to imports.

39.

The___________ a country’s GDP, the better the country’s standard of living.

a)

lower

b)

greater

c)

smaller

d)

answers 1 and 3 are correct

40.

What are natural resources?

a)

resources that are gone from nature

b)

resources that are manufactured for the environment

c)

resources that are considered worthless

d)

materials or substances that occur in nature and can be used for economic gain.

41.

Why should countries invest in developing human capital?

a)

because the more people you have working in one area like a capital the more productive it will be

b)

it leads to a lower GDP

c)

it leads to lower literacy rate

d)

investment in the education and skills training of people creates a smarter and more productive workforce, which relates to a higher GDP.

42.

What are capital goods?

a)

goods that are produced in the capital

b)

the factories, machinery, and technology used to produce goods and services

c)

goods that are produced without natural resources

d)

goods that are produced by the government

43.

Why should countries invest in developing capital goods?

a)

they shouldn't, it is too expensive

b)

because capital goods cannot be sold to other countries

c)

when countries invest in capital goods, they are providing better facilities, resources, and/or materials for the people who perform the labor, which creates a more productive workforce leading to greater economic growth (higher GDP).

d)

because capital goods are less expensive than private goods

44.
Economic growth can be measured by
a)
a)     The CPI
b)
b)     The CBI
c)
c)     GDP
d)
d)     MPC
45.
Sustainable economic growth depends upon
a)
a)     Investment, not saving
b)
b)     Saving, not investment
c)
c)     Both saving and investment
d)
d)     Neither saving nor investment
46.

Brazil is building new factories and using newer technology.


These are examples of...

a)

Opportunity costs.

b)

Gross domestic product.

c)

Investment in human capital.

d)

Investment in capital goods.

47.

When you spend money at the store, you're contributing to your town's ___.

a)

inflation

b)

import

c)

economy

48.

the performance of a duty or work for another person.

a)

import

b)

service

c)

goods

49.

things that are made or grown and then sold.

a)

goods

b)

productive

c)

service

50.

a product sent and sold to another country.

a)

export

b)

net

c)

import

51.

Economic growth is a situation where an economy's real GDP increase.

a)

True

b)

False

52.

Potential economic growth is a situation where an economy's productive capacity improved.

a)

True

b)

False

53.

Actual economic growth is caused by an increase in quality and quantity of resources.

a)

True

b)

False

54.

Potential economic growth is caused by an increase in consumption and net exports.

a)

True

b)

False

55.

Actual economic growth can be represented by:

a)

Outward shift of PPF

b)

Inward shift of PPF

c)

Movement of a point inside towards a point on PPF

d)

Movement of a point on PPF towards a point inside

56.

Potential economic growth can be represented by:

a)

Outward shift of PPF

b)

Inward shift of PPF

c)

Movement of a point inside towards a point on PPF

d)

Movement of a point on PPF towards a point inside

57.

Actual economic growth can be represented by:

a)

Leftward shift of AD

b)

Leftward shift of LRAS

c)

Rightward shift of AD

d)

Rightward shift of LRAS

58.

Potential economic growth can be represented by:

a)

Leftward shift of AD

b)

Leftward shift of LRAS

c)

Rightward shift of AD

d)

Rightward shift of LRAS

59.

Recession caused by demand shock will cause:


(Select 2 options)

a)

AD to shift left

b)

LRAS to shift left

c)

a movement of a point on PPF towards a point inside

d)

inward shift of PPF

60.

Recession caused by supply shock will cause:


(Select 2 options)

a)

AD to shift left

b)

LRAS to shift left

c)

a movement of a point on PPF towards a point inside

d)

inward shift of PPF

61.

Full employment means everyone is employed and there is zero unemployment.

a)

True

b)

False

62.

Natural rate of unemployment includes structural unemployment and _______________________.

a)

Cyclical unemployment

b)

Frictional unemployment

63.

When there is an influx foreign talent/workers, there will be a/an:

a)

increase in labour demand

b)

decrease in labour demand

c)

increase in labour supply

d)

decrease in labour supply

64.

When economy outlook is good and more foreign companies are opening up, there will be a/an:

a)

increase in labour demand

b)

decrease in labour demand

c)

increase in labour supply

d)

decrease in labour supply

65.

When labour supply curve shifts left, equilibrium price will ______________ and equilibrium qty of labour will ___________.

a)

increase / increase

b)

decrease / decrease

c)

increase / decrease

d)

decrease / increase

66.

When labour demand curve shifts left, equilibrium price will ______________ and equilibrium qty of labour will ___________.

a)

increase / increase

b)

decrease / decrease

c)

increase / decrease

d)

decrease / increase

67.

The total value of all final goods and services produced in a country in a given year.

a)

Gross Domestic Product

b)

Consumer Price Index

c)

Inflation

d)

Unemployment

68.

Economic growth measures the

a)

a) Growth of productivity

b)

b) Increase in nominal income

c)

c) Increase in national output

d)

d) None of the above

69.
Economic growth can be measured by
a)
a)     The CPI
b)
b)     The CBI
c)
c)     GDP
d)
d)     MPC
70.

Type of unemployment that occurs as a result of harvest schedules, or lack of hotel bookings in winter.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

71.

Type of unemployment that occurs when workers skills do not match those needed for the jobs available.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

72.

Unemployment that rises during economic downturns and falls when the economy improves.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

73.

A period of macroeconomic expansion or growth, followed by a period of contraction, or decline.

a)

Economic Cycle

b)

Circular Flow

c)

Equilibrium

d)

GDP

74.
Economic growth can be seen by an outward shift of
a)
a)     The Production Possibility Frontier
b)
b)     The Gross Domestic Barrier
c)
c)     The Marginal Consumption Frontier
d)
d)     The Minimum Efficient Scale
75.
To boost economic growth the government is most likely to
a)
a)     Increase interest rates
b)
b)     Increase taxation rates
c)
c)     Provide incentives to invest
d)
d)     Provide incentives to save
76.

In a recession, GDP

a)

a) Shrinks

b)

b) Grows slowly

c)

c) Grows by 0%

d)

d) Grows rapidly

77.
In a boom
a)
a)     Unemployment is likely to fall
b)
b)     Prices are likely to fall
c)
c)     Demand is likely to fall
d)
d)     Imports are likely to fall
78.

What are capital goods?

a)

goods that are produced in the capital

b)

the factories, machinery, and technology used to produce goods and services

c)

goods that are produced without natural resources

d)

goods that are produced by the government

79.
Potential growth measures
a)
a)     The growth of the fastest economy in the world
b)
b)     The fastest growth an economy has ever achieved
c)
c) The present rate of growth of an economy
d)
d)     The rate of growth that could be achieved if resources were fully employed
80.

The graphs show how consumer prices and real GDP changed in a country between 1995 and 2005. Which conclusion may be drawn from the graphs?

a)

Living standards remained roughly constant between 1995 and 2005.

b)

The level of GDP was lower in 2005 than in 2000.

c)

The country experienced continuous economic growth between 1995 and 2005.

d)

The price level fell between 2000 and 2003.

81.

Which formula is the correct way to measure economic growth rate?

a)

Original GDP / Change in GDP x 100

b)

Original GDP - Change in GDP x 100

c)

Change in GDP / Original GDP x 100

d)

Change in GDP - Original GDP x 100

82.

What is GDP per capita?

a)

GDP x population

b)

GDP / population

c)

GDP + population

d)

GDP - population

83.

If GDP is £300 billion and the population is 30 million. What is GDP per capita?

a)

£270 billion

b)

£100,000

c)

£10,000

d)

£1,000

84.

Which of the following DOESN’T cause economic growth?

a)

Increased investment

b)

Improved technology

c)

Increased labour productivity

d)

Less investment in education

85.

Which of the following is a benefit of economic growth?

a)

A rise in the standard of living

b)

Increased pollution

c)

Increased congestion

d)

Inequalities in income and wealth

86.

Which of the following is a cost of economic growth?

a)

A fall in unemployment

b)

A rise in employment

c)

A reduction in poverty

d)

Loss of non-renewable resources

87.

Calculate the economic growth rate if GDP was £60 billion in Year 1 and £63 billion in Year 2.

a)

1%

b)

5%

c)

10%

d)

15%

88.

Calculate the economic growth rate if GDP was £100 billion in Year 1 and £102 billion in Year 2.

a)

1%

b)

2%

c)

10%

d)

20%

89.

Calculate GDP per capita if GDP is £200 billion and the population is 40 million.

a)

£1,000

b)

£2,000

c)

£5,000

d)

£10,000

90.

The use of government spending and revenue collection to influence the economy.

a)

Monetary Policy

b)

Fiscal Policy

c)

Congressional Policy

d)

Executive Policy

91.

Workers are seeking employment but cannot find employment because of widespread low economic activity. Which type of unemployment are these workers experiencing?

a)

Cyclical

b)

Structural

c)

Frictional

d)

Voluntary

92.

Workers are seeking employment but cannot find employment because of widespread low economic activity. Which type of unemployment are these workers experiencing?

a)

Cyclical

b)

Structural

c)

Frictional

d)

Voluntary

93.

Structural unemployment is most likely to occur because of

a)

labour being temporarily unemployed when moving between jobs.

b)

fluctuations in the level of aggregate demand.

c)

the seasonal nature of certain occupations.

d)

long-term changes in the pattern of demand for the products of particular industries.

94.

‘Unemployment has begun to rise in the UK. What should policy makers do? Already the Bank of England has cut interest rates. Also, the government has begun to spend more without covering all of the increase by a rise in taxes.’It can be inferred from the data that in response to rising unemployment

a)

both monetary policy and fiscal policy are expansionary.

b)

monetary policy is expansionary whilst fiscal policy is contractionary.

c)

monetary policy is contractionary whilst fiscal policy is expansionary.

d)

both monetary policy and fiscal policy are contractionary.

95.

Which one of the following types of unemployment is best defined as ‘unemployment for short lengths of time between jobs’?

a)

Frictional

b)

Seasonal

c)

Cyclical

d)

Structural

96.

A labor force of 20 million people has 18.5 million people employed. Find the unemployment rate.

a)

10%

b)

8.5%

c)

7.5%

d)

6%

97.

Discouraged workers in

the economy implies that the measurement of unemployment...

a)

understates the true unemployment rate

b)

overstates the true unemployment rate

c)

correctly measures the true unemployment rate

d)

doubles the unemployment rate

98.

Which of these people is officially unemployed

a)

A secretary who took 6 months off for maternity leave

b)

An aspiring actress who waits tables but would rather act

c)

Maid who got fired and will start a new job in 2 weeks

d)

A student who only works 4 hours a week in the library

99.

Which of these is NOT a characteristic of an unemployed person?

a)

He/she does not work

b)

He/she has made specific efforts to find a job

c)

He/she is laid off from a job in the succeeding months

d)

He/she is undergoing a career change

100.

When individuals lose jobs due to a decline in the economy (aggregate demand), often during an economic recession.

a)

Structural Unemployment

b)

Cyclical Unemployment

c)

Frictional Unemployment

d)

Seasonal Unemployment

101.

35 year old project manager who was let go because his employer went bankrupt. He's applied for several similar jobs but hasn't heard back as of yet.

a)

Employed

b)

Unemployed

c)

Not in the Labor Force

d)

Not Applicable / Not Counted

102.

An increase in business confidence will cause what change?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

103.

An increase in income tax will cause what change?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

104.

An increase in worker productivity?

a)

Increase in AD

b)

Decrease in AD

c)

Increased AS

d)

Decrease in AS

105.

Which is not the type of unemployment?

a)

frictional

b)

functional

c)

cyclical

d)

structural

106.

In which type of unemployment workers find it hard to obtain new jobs without retraining, gaining additional education, or relocating??

a)

cyclical

b)

frictional

c)

structural

d)

all of them

107.

Which of the following statements would be classified as “full employment’?

a)

Everyone who wants to work has a job

b)

Approximately 95% of people have a job

c)

People who have been hunting for a job for a long time

d)

Everyone who wants to work have full time jobs

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