Chapter 28 Preliminary Quiz
Measuring Economic Activity

Multiple Choice Questions:

Enter your answer to each of the questions in the blank to the left of the question. Be sure to use lowercase letters only!

	1. One of the most important characteristics of a developing country is: a. that a developing country will have relatively high levels of disease. b. that a developing country will have low per capital income. c. both a and b. d. neither a nor b.
	2. The Human Development Index (HHI) includes which of the following? a. measures of schooling b. measures of literacy c. measures of life expectancy d. measures of income e. all of the above
	3. Which of the following are key points that economic policy makers in developing countries should focus on? a. Improving health, nutrition, and disease prevention b. Improving education, literacy rates, and training for workers c. Emphasize the importance of human resources d. all of the above
	4. Infrastructure is: a. social overhead capital. b. large-scale public projects. c. both a and b. d. neither a nor b.
	5. In many developing countries, what is the most urgent problem? a. disease b. a low saving rate c. hunger d. none of the above
	6. What do we call the situation where low incomes lead to low saving; low saving results in slow growth of the capital stock; too little capital means that there are few new machines that can be used to increase productivity; low productivity results in low incomes? a. virtuous circles b. vicious cycle of poverty c. voluminous poverty d. pestilence
	7. When a country aims at paying for imports by improving competitiveness and efficiency, developing foreign markets for its exports, and keeping trade barriers low, we call such a strategy what? a. a strategy of the commons b. a strategy of openness c. a strategy of a closed economy d. none of the above
	8. We would expect that open economies will grow _______ than ______ economies. a. faster; scale b. faster; closed c. slower; scale d. slower; closed
	9. What do we call the philosophy that says that the best government is the least government? a. free-market absolutism b. socialism c. soviet-style communism d. market Leninism
	10. Which of the following is not a lesson learned from the Asian Dragons? a. High investment rates ensure that the latest technology will be available in the economy. b. High inflation is not such a bad thing for an economy. High inflation will ensure that a country's goods are very affordable to foreigners. c. Keeping the exchange rate undervalued promoted exports. d. None of the above.
	11. Which of the following is not a characteristic of socialism? a. Government ownership of the resources of production. b. Central planning. c. Encouragement of increased income inequality. d. None of the above.
	12. The _______ arises in the communist system because the system does not have a suitable substitute for profits and prices as a way of motivating the economy. a. socialist problem b. principal-agent problem c. central planning problem d. dogma