Tackle the Test: Multiple-Choice Questions

1. Question

   Economies experience more rapid economic growth when they do which of the following?

   
   

   
   

   1. add physical capital

      
      
   
   

   2. promote technological progress

      
      
   
   

   3. limit human capital

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and II only

   E.

   I, II, and III

   Economies experience more rapid economic growth when they do which of the following?

2. Question

   Which of the following can lead to increases in physical capital in an economy?

   A.

   increased investment spending

   B.

   increased savings by domestic households

   C.

   increased savings from foreign households

   D.

   an inflow of foreign capital

   E.

   all of the above

   Which of the following can lead to increases in physical capital in an economy?

3. Question

   Which of the following is true of sustainable long-run economic growth?

   A.

   Long-run growth can continue in the face of the limited supply of natural resources.

   B.

   It was predicted by Thomas Malthus.

   C.

   Modern economies handle resource scarcity problems poorly.

   D.

   It is less likely when we find alternatives to natural resources.

   E.

   All of the above are true.

   Which of the following is true of sustainable lon

4. Question

   Which of the following statements is true of environmental quality?

   A.

   It is typically not affected by government policy.

   B.

   Other things equal, it tends to improve with economic growth.

   C.

   There is broad scientific consensus that rising levels of carbon dioxide and other gases are raising the planet’s overall temperature.

   D.

   Most economists believe it is not possible to reduce greenhouse gas emissions while economic growth continues.

   E.

   Most environmental success stories involve dealing with global, rather than local impacts.

   Which of the following statements is true of environmental quality?

5. Question

   According to the MIT study discussed in the module, a cap and trade system to reduce greenhouse gas emissions in the United States would lead to

   A.

   no significant costs.

   B.

   significant but not overwhelming costs.

   C.

   a loss of roughly three year’s real GDP over the next 40 years.

   D.

   a reduction in real GDP per capita of over 10%.

   E.

   a loss of 5 years’ worth of economic growth over the next 40 years.

   According to the MIT study discussed in the module, a cap and trade system to reduce greenhouse gas emissions in the United States would lead to