Measuring Economic Growth and Development Practice Exam
- What is the primary indicator used to measure a country’s economic growth?
A. Consumer Price Index (CPI)
B. Gross Domestic Product (GDP)
C. Net National Product (NNP)
D. Human Development Index (HDI) - Which of the following is excluded when calculating GDP?
A. Final goods
B. Intermediate goods
C. Consumer spending
D. Government expenditure - What does “real GDP” account for that “nominal GDP” does not?
A. Taxation
B. Population growth
C. Inflation
D. Exchange rates - Which measure accounts for income distribution in assessing economic development?
A. Gini coefficient
B. GDP per capita
C. Purchasing Power Parity (PPP)
D. Real GDP - What is the purpose of using GDP per capita?
A. To compare living standards across countries
B. To measure total economic output
C. To assess government revenue
D. To calculate inflation - What does the Human Development Index (HDI) measure?
A. Only economic growth
B. Standard of living, education, and health
C. Government policies
D. Military expenditure - What does PPP (Purchasing Power Parity) adjust for?
A. Exchange rates
B. Inflation
C. Cost of living differences
D. Trade deficits - Which sector is typically the largest contributor to GDP in developed economies?
A. Agriculture
B. Industry
C. Services
D. Manufacturing - What does a negative GDP growth rate indicate?
A. Inflation
B. Economic recession
C. Full employment
D. Trade surplus - Which of the following is a limitation of GDP as a measure of economic development?
A. Excludes government spending
B. Ignores environmental degradation
C. Excludes consumer spending
D. Ignores exports - What does the Gross National Product (GNP) measure?
A. Total domestic production
B. Total production by a country’s residents, including overseas income
C. Government revenue
D. Population growth - What is considered an example of “structural unemployment”?
A. Seasonal job loss
B. Job loss due to automation
C. Layoffs during economic recessions
D. Voluntary unemployment - What term describes the average income of individuals in an economy?
A. GDP
B. GNP per capita
C. Disposable income
D. Median wage - Which of the following is NOT a component of GDP?
A. Consumption
B. Investment
C. Exports
D. Personal savings - What does economic development focus on that economic growth does not?
A. Income levels
B. Living standards and social well-being
C. Trade balances
D. Industrial output - Which of these is a qualitative indicator of economic development?
A. Life expectancy
B. GDP growth rate
C. Balance of trade
D. Capital investment - What does the term “sustainable development” emphasize?
A. Maximizing current economic output
B. Balancing current and future resource use
C. Reducing government expenditure
D. Increasing exports - What is the primary goal of economic growth?
A. Increase in population
B. Reduction in inflation
C. Increase in GDP
D. Equal income distribution - What is the main focus of the Lorenz Curve?
A. Inflation trends
B. Income inequality
C. Trade imbalances
D. Population growth - What is the term for economic output divided by the population?
A. Real GDP
B. GDP per capita
C. GNP
D. PPP - What is considered a disadvantage of using HDI?
A. Excludes GDP per capita
B. Ignores cultural differences
C. Overemphasizes economic factors
D. Does not account for environmental factors - Which factor is typically associated with economic growth?
A. Decreased investments
B. Improved technology
C. Reduced workforce
D. Declining literacy rates - What does the term “economic stagnation” refer to?
A. Continuous decline in GDP
B. Little or no growth in GDP over time
C. Rapid GDP growth
D. Inflation outpacing wages - What role do infrastructure investments play in economic development?
A. No significant impact
B. Increase in unemployment
C. Enhance productivity and connectivity
D. Reduce inflation - What is an example of informal economic activity?
A. Taxed retail sales
B. Government contracts
C. Unregistered street vending
D. Export transactions - What is “capital deepening”?
A. Increasing the labor force
B. Increasing capital per worker
C. Increasing trade deficits
D. Decreasing investment - Which international organization provides annual reports on global development?
A. International Monetary Fund (IMF)
B. World Bank
C. United Nations
D. World Trade Organization (WTO) - What does the term “inclusive growth” imply?
A. Growth that benefits only the wealthy
B. Growth that reduces government spending
C. Growth that reduces inequality and benefits all
D. Growth focused only on industrial sectors - Which of the following is an environmental cost of economic growth?
A. Higher GDP per capita
B. Deforestation
C. Increased life expectancy
D. Improved infrastructure - What does the term “standard of living” encompass?
A. Only income levels
B. Quality of life factors like health, education, and income
C. Government tax revenue
D. Trade balance
- What is the primary difference between economic growth and economic development?
A. Economic growth focuses on GDP, while economic development includes social progress.
B. Economic development is a subset of economic growth.
C. Economic growth focuses on exports, while economic development focuses on imports.
D. Economic development only considers industrial progress. - Which term refers to the reduction in purchasing power due to rising prices?
A. Inflation
B. Deflation
C. Stagflation
D. Hyperinflation - Which factor is most likely to accelerate economic growth in developing countries?
A. Population growth
B. Trade restrictions
C. Foreign direct investment (FDI)
D. Increased government debt - What does the term “economic diversification” refer to?
A. Dependence on a single industry
B. Expansion into multiple industries
C. Limiting trade partnerships
D. Reducing public spending - What is the primary focus of the Solow Growth Model?
A. Income inequality
B. Capital, labor, and technological progress
C. Government policy
D. Trade deficits - What does “export-led growth” emphasize?
A. Increasing domestic consumption
B. Developing industries for export markets
C. Reducing reliance on exports
D. Promoting local businesses over international trade - What is a major challenge of measuring economic growth through GDP alone?
A. It includes both legal and illegal activities.
B. It does not account for income inequality or non-market activities.
C. It excludes government spending.
D. It overemphasizes agricultural contributions. - Which type of investment is most directly linked to future economic growth?
A. Real estate
B. Human capital development
C. Consumer goods
D. Stock market speculation - What is the significance of “total factor productivity” (TFP)?
A. It measures government efficiency.
B. It measures the efficiency of inputs like labor and capital.
C. It assesses trade balances.
D. It determines inflation rates. - What does the term “convergence theory” in economics suggest?
A. Developing countries cannot achieve the same growth as developed ones.
B. Developing economies can catch up to developed ones by adopting similar technologies.
C. Economic policies should converge globally.
D. Growth is only achievable through industrialization. - Which measure better captures inequality in a country?
A. Nominal GDP
B. Gini coefficient
C. Real GDP growth rate
D. PPP-adjusted GDP - What does the term “productivity growth” refer to?
A. Increase in employment rates
B. Increase in output per unit of input
C. Increase in government spending
D. Decrease in inflation - What role does education play in economic development?
A. It increases government spending.
B. It enhances human capital and labor productivity.
C. It decreases GDP per capita.
D. It reduces foreign investments. - What does “inclusive development” focus on?
A. Economic growth with equal opportunities for all segments of society
B. Growth restricted to urban areas
C. Limiting foreign investment
D. Industrial development only - Which of the following contributes to sustainable economic development?
A. Extensive fossil fuel use
B. Investments in renewable energy
C. Reduction in technological innovation
D. Over-reliance on exports - What is the primary goal of international trade in fostering economic development?
A. Increasing tariffs
B. Improving resource allocation and increasing market size
C. Reducing competition
D. Minimizing exports - What is the Environmental Kuznets Curve hypothesis?
A. Economic growth always leads to environmental degradation.
B. Environmental degradation initially rises with income but decreases at higher income levels.
C. Economic growth is unrelated to environmental impacts.
D. Economic growth directly reduces pollution. - Which of these is an example of a structural policy to boost economic development?
A. Lowering inflation rates
B. Building infrastructure like roads and power plants
C. Increasing short-term loans
D. Reducing foreign aid - What does “economic resilience” refer to?
A. A country’s ability to recover from economic shocks
B. Consistent GDP growth rates
C. Avoiding international trade
D. Eliminating all economic inequality - What is an example of “green growth”?
A. Increasing coal production
B. Promoting renewable energy industries
C. Banning all industrial activities
D. Reducing GDP to preserve resources
- What is the primary objective of the Human Development Index (HDI)?
A. To measure GDP growth
B. To rank countries based on income alone
C. To assess overall human well-being through income, health, and education
D. To evaluate trade performance - What is an example of a non-market activity that GDP does not account for?
A. Manufacturing outputs
B. Household work like childcare
C. Corporate profits
D. Agricultural exports - Which international organization provides annual updates on global poverty and development indicators?
A. World Trade Organization (WTO)
B. United Nations Development Programme (UNDP)
C. World Health Organization (WHO)
D. International Monetary Fund (IMF) - What is the “brain drain” phenomenon?
A. Loss of skilled workers migrating to other countries
B. Decline in educational infrastructure
C. Reduction in healthcare services
D. Dependence on foreign aid - Which term describes a situation where economic growth harms the environment?
A. Sustainable development
B. Environmental degradation
C. Resource allocation
D. Green economics - What is meant by “per capita income”?
A. Total national income
B. Average income per person in a country
C. Income from exports only
D. Government revenue per capita - Which factor is considered critical for long-term economic development?
A. Low inflation
B. High levels of innovation and technology adoption
C. High government borrowing
D. Large foreign exchange reserves - Which type of development focuses on satisfying current needs without compromising future generations?
A. Industrial development
B. Sustainable development
C. Capital-intensive development
D. Short-term economic policies - What does the term “demographic dividend” refer to?
A. Economic growth resulting from a larger working-age population
B. A country’s dependence on an aging population
C. Increase in population due to high birth rates
D. Economic challenges of population decline - Which of the following is an example of infrastructural development?
A. Establishing factories
B. Building roads, bridges, and public utilities
C. Expanding the retail sector
D. Increasing foreign aid - Which indicator measures inequality within a country?
A. GDP growth rate
B. Purchasing power parity (PPP)
C. Gini coefficient
D. Consumer Price Index (CPI) - What is the impact of trade liberalization on economic growth?
A. Reduces competition in domestic markets
B. Encourages efficient resource allocation and boosts exports
C. Leads to increased trade barriers
D. Limits foreign direct investment - Which economic theory emphasizes that government intervention is essential for growth in developing countries?
A. Classical economics
B. Keynesian economics
C. Supply-side economics
D. Monetarism - What is the significance of microfinance in economic development?
A. It promotes large-scale industrial projects.
B. It provides small loans to individuals to start or expand businesses.
C. It encourages foreign investment.
D. It reduces interest rates on government bonds. - What does the term “poverty trap” refer to?
A. The inability of poor individuals to break out of poverty due to systemic issues
B. A situation where countries with low GDP cannot trade
C. Reduction in poverty due to higher taxes
D. Dependence on foreign trade for development - What is the role of technological innovation in economic growth?
A. Reduces the need for education
B. Increases productivity and efficiency
C. Decreases international trade
D. Limits employment opportunities - What does “structural unemployment” indicate?
A. Unemployment caused by economic downturns
B. Joblessness due to a mismatch between skills and job requirements
C. Temporary unemployment during job transitions
D. Unemployment caused by technological advances - Which economic measure focuses on the environmental costs of growth?
A. Green GDP
B. Real GDP
C. Nominal GDP
D. Gini coefficient - Which of these is a direct indicator of improved standard of living?
A. Increase in trade deficits
B. Higher literacy rates
C. Higher national debt
D. Increase in fossil fuel consumption - What is the significance of the Sustainable Development Goals (SDGs)?
A. To promote industrialization in developing countries
B. To eradicate poverty, ensure equity, and protect the planet
C. To boost global trade relations
D. To eliminate all government interventions
- What is the purpose of purchasing power parity (PPP) in comparing economies?
A. To measure trade balances
B. To account for differences in the cost of living across countries
C. To calculate export performance
D. To evaluate environmental impacts of growth - What is a major advantage of focusing on Gross National Income (GNI) rather than GDP?
A. GNI includes income earned by residents abroad.
B. GNI excludes industrial contributions.
C. GNI focuses only on domestic industries.
D. GNI ignores tax revenues. - Which of the following is a key factor in the transition from a developing to a developed economy?
A. Decreased access to education
B. Expansion of the industrial and service sectors
C. Increased dependence on agricultural exports
D. Reduced infrastructure investments - What does the term “shadow economy” refer to?
A. Economic activities that are not regulated or taxed
B. Government-owned businesses
C. Hidden government spending
D. International trade agreements - What is the primary focus of the Lewis Two-Sector Model of Development?
A. Trade liberalization
B. Transition from subsistence agriculture to industrialization
C. Environmental sustainability
D. Reduction in income inequality - Which of the following is a characteristic of a developed economy?
A. High dependency on agricultural exports
B. Advanced technological infrastructure
C. Low literacy rates
D. High population growth rates - What is the role of foreign aid in economic development?
A. To reduce international trade
B. To address financial gaps in developing countries
C. To encourage trade deficits
D. To reduce domestic savings - What does “terms of trade” measure?
A. The balance between exports and imports
B. The relative prices of a country’s exports to its imports
C. Trade barriers between countries
D. The volume of trade within a country - What is the significance of the Millennium Development Goals (MDGs)?
A. To promote global trade
B. To address poverty, hunger, and inequality by 2015
C. To establish financial markets in developing countries
D. To measure GDP growth rates - What is an example of a renewable resource that contributes to sustainable growth?
A. Coal
B. Solar energy
C. Natural gas
D. Nuclear energy - What does the “Lorenz curve” represent in economics?
A. The relationship between inflation and unemployment
B. The distribution of income or wealth within an economy
C. The trade-offs between environmental sustainability and economic growth
D. The changes in population growth over time - What is the relationship between savings and economic growth in the Harrod-Domar Model?
A. Savings negatively impact economic growth.
B. Savings are essential for capital formation, which drives growth.
C. Savings are unrelated to economic growth.
D. Savings reduce domestic consumption and slow down growth. - What is the primary goal of inclusive growth strategies?
A. To focus solely on urban industrialization
B. To ensure equitable benefits of growth across all segments of society
C. To promote short-term economic expansion
D. To prioritize trade over domestic industries - Which of the following best defines structural transformation?
A. The shift of an economy from agriculture to industry and services
B. The increase in agricultural productivity
C. The focus on short-term economic policies
D. The decline in foreign investments - What is the primary purpose of the Ease of Doing Business Index?
A. To measure GDP growth rates
B. To rank countries based on the regulatory environment for businesses
C. To evaluate trade performance
D. To measure environmental impacts of economic activities - Which of these is a key benefit of digital transformation for economic growth?
A. Increased reliance on traditional industries
B. Enhanced efficiency and access to global markets
C. Reduced investment in infrastructure
D. Decreased employment opportunities - What is the purpose of export processing zones (EPZs)?
A. To restrict international trade
B. To attract foreign investment and boost exports
C. To limit the role of private industries
D. To regulate domestic markets - What is the role of social capital in economic development?
A. It focuses on financial markets.
B. It refers to networks and trust that facilitate economic activities.
C. It is unrelated to economic growth.
D. It reduces the need for education. - What is the significance of “trickle-down economics”?
A. It argues that benefits of economic growth eventually reach all levels of society.
B. It emphasizes wealth redistribution through taxation.
C. It focuses on small-scale agriculture.
D. It reduces the role of government in the economy. - Which of the following is an example of human development contributing to economic growth?
A. Increase in defense spending
B. Improvement in healthcare and education
C. Reduction in labor force participation
D. Decrease in technological innovation
- What is the Human Poverty Index (HPI) used for?
A. Measuring trade imbalances
B. Assessing deprivation in basic human capabilities
C. Evaluating industrial growth rates
D. Calculating inflation rates - What does the term “dual economy” describe?
A. An economy with equal industrial and agricultural contributions
B. Coexistence of a modern industrial sector and a traditional agricultural sector
C. An economy with two trading partners
D. A system with two forms of currency - What is the goal of sustainable development?
A. To maximize GDP growth at all costs
B. To balance economic growth with environmental protection and social equity
C. To prioritize urban development over rural areas
D. To eliminate all forms of taxation - What is the Kuznets Curve hypothesis?
A. Economic growth leads to consistent environmental improvement.
B. Income inequality first increases, then decreases as economies develop.
C. Economic growth depends only on agricultural productivity.
D. Industrial growth always reduces poverty. - Which indicator is best for measuring income distribution in an economy?
A. GDP
B. Gini coefficient
C. Trade balance
D. Unemployment rate - What is the role of microfinance in economic development?
A. To provide large-scale loans for infrastructure projects
B. To offer small loans to individuals and small businesses to reduce poverty
C. To focus exclusively on foreign investments
D. To replace traditional banking systems - What is meant by “economic diversification”?
A. Specializing in one industry to maximize efficiency
B. Expanding the range of economic activities to reduce dependency on one sector
C. Reducing trade agreements to promote domestic growth
D. Focusing solely on agriculture - What does the “Big Push Theory” advocate for economic development?
A. Gradual development through small investments
B. Large-scale investments in multiple sectors to overcome barriers to growth
C. Avoiding foreign aid to promote self-reliance
D. Dependence on natural resources for growth - Which of these is a limitation of GDP as a measure of economic development?
A. It includes non-market transactions.
B. It does not account for income distribution or environmental degradation.
C. It measures social welfare.
D. It excludes international trade. - What is a key factor in human capital development?
A. Industrial investments
B. Education and healthcare
C. Export promotion policies
D. Agricultural subsidies - What is the impact of high inflation on economic growth?
A. Encourages foreign investments
B. Reduces purchasing power and discourages savings
C. Increases exports
D. Stabilizes the currency - What is a key focus of Amartya Sen’s approach to development?
A. Industrial output
B. Expansion of individual freedoms and capabilities
C. Trade liberalization
D. Fiscal policy - What is an example of a qualitative measure of development?
A. GDP per capita
B. Literacy rates
C. Industrial output
D. Trade surplus - What is a primary focus of the Solow Growth Model?
A. The role of government policies in economic growth
B. The impact of technological progress and capital accumulation on growth
C. Reducing trade barriers
D. Environmental sustainability - What does the term “dependency theory” suggest about economic development?
A. Developing countries can grow without external assistance.
B. Developing countries remain dependent on developed nations due to exploitative trade relationships.
C. Trade liberalization is key to economic growth.
D. Developed countries are dependent on developing countries for resources. - What is the focus of endogenous growth theory?
A. External factors like trade and foreign aid
B. The role of innovation, human capital, and knowledge in driving growth
C. Natural resource availability
D. Short-term fiscal policies - What is an example of structural unemployment?
A. Workers lose jobs due to seasonal demand changes.
B. Workers are replaced by technological advancements.
C. Workers voluntarily leave their jobs.
D. Workers are unable to find jobs due to a lack of skills matching the economy’s needs. - What is the primary goal of regional economic integration?
A. To reduce international trade
B. To encourage economic cooperation and increase trade among member countries
C. To limit foreign investments
D. To create economic barriers - What is a common measure of a country’s living standards?
A. GDP growth rate
B. GDP per capita
C. Trade surplus
D. Population growth rate - What is the significance of “demographic transition” in development?
A. It describes rapid industrialization.
B. It explains changes in population growth rates as countries develop.
C. It measures income inequality.
D. It focuses on migration patterns.
- What is the role of infrastructure in economic development?
A. Increasing government debt
B. Enhancing productivity and facilitating trade
C. Reducing the workforce in rural areas
D. Limiting foreign investments - Which is a primary challenge for least developed countries (LDCs) in achieving economic growth?
A. Excessive trade surpluses
B. High levels of foreign direct investment
C. Limited access to education and healthcare
D. Overdependence on technology - What is the Environmental Kuznets Curve (EKC)?
A. A curve showing income inequality across sectors
B. A hypothesis that environmental degradation first increases, then decreases with income growth
C. A theory that links population growth to economic output
D. A model predicting constant economic growth rates - Which measure reflects the economic well-being of a country more comprehensively than GDP?
A. Gross National Happiness (GNH)
B. Trade balance
C. Industrial production index
D. Employment rate - What does the term “brain drain” refer to?
A. The outflow of skilled professionals from one country to another
B. A decrease in educational spending
C. A decline in birth rates
D. An increase in population density - Which strategy is key to reducing income inequality in developing countries?
A. Trade liberalization
B. Progressive taxation and social welfare programs
C. Increasing military spending
D. Promoting urbanization - What is “PPP” in economic measurements?
A. Private-Public Partnership
B. Purchasing Power Parity
C. Price Parity Projection
D. Production-Price Policy - What is a major limitation of using per capita income to measure development?
A. It reflects only GDP growth rates.
B. It does not account for income inequality or quality of life.
C. It measures environmental sustainability.
D. It is calculated only for rural areas. - Which international organization focuses on poverty alleviation and economic development?
A. World Trade Organization (WTO)
B. International Monetary Fund (IMF)
C. World Bank
D. United Nations Security Council - Which sector typically dominates the economy of developing countries?
A. Agricultural sector
B. Service sector
C. Manufacturing sector
D. Technology sector - What is the significance of the term “industrialization”?
A. Transition from rural to urban living
B. Expansion of manufacturing and production capabilities
C. Reduction in global trade
D. Focus on agricultural development - Which of the following is an example of social development?
A. GDP growth rate improvement
B. Increase in literacy rates
C. Reduction in trade tariffs
D. Expansion of military budgets - What does a high Gini coefficient indicate?
A. Equal income distribution
B. High levels of income inequality
C. Strong economic growth
D. Low unemployment rates - What is the primary objective of foreign aid?
A. To increase donor country exports
B. To support economic development and reduce poverty
C. To promote trade restrictions
D. To create dependency on donor countries - Which factor is most critical for achieving long-term economic growth?
A. High population growth
B. Technological innovation
C. Trade restrictions
D. Political instability - What does the term “inclusive growth” mean?
A. Growth that benefits only urban areas
B. Growth that ensures benefits are distributed across all sections of society
C. Rapid industrialization with no focus on rural areas
D. Economic growth limited to developed nations - Which index combines education, health, and income indicators?
A. Human Development Index (HDI)
B. Gross Domestic Product (GDP)
C. Economic Freedom Index
D. Consumer Price Index (CPI) - What is the term for economic policies that focus on reducing trade barriers?
A. Protectionism
B. Liberalization
C. Fiscal consolidation
D. Austerity measures - What does “natural capital” refer to in economic terms?
A. Physical infrastructure like factories
B. Financial reserves held by a government
C. Natural resources used for economic production
D. Technology and innovation - Which economic theory emphasizes the importance of export-led growth?
A. Import substitution
B. Keynesian economics
C. Mercantilism
D. Comparative advantage
- What is the Solow Growth Model primarily used to analyze?
A. Short-term trade cycles
B. Long-term economic growth and capital accumulation
C. International trade policies
D. Inflationary trends in developed nations - Which economic measure includes non-market activities like household labor?
A. GDP
B. Net National Income (NNI)
C. Gross National Happiness (GNH)
D. Genuine Progress Indicator (GPI) - What is the role of microfinance in economic development?
A. Funding large corporations
B. Providing small loans to empower low-income individuals
C. Reducing government expenditures
D. Increasing urban migration - Which sector contributes the most to economic diversification in developing countries?
A. Mining
B. Technology and innovation
C. Agriculture
D. Small and medium enterprises (SMEs) - What is the relationship between education and economic growth?
A. Inverse relationship
B. No significant relationship
C. Education leads to higher productivity and economic growth
D. Education only impacts the service sector - What is an example of a structural barrier to economic development?
A. High literacy rates
B. Poor infrastructure
C. Trade liberalization policies
D. Rapid urbanization - Which of the following is a non-monetary indicator of development?
A. Inflation rates
B. Literacy rates
C. Trade surplus
D. Stock market indices - What is the “middle-income trap”?
A. Difficulty for low-income countries to reach middle-income status
B. Economic stagnation where middle-income countries fail to transition to high-income status
C. A phase of excessive foreign debt in middle-income countries
D. Overdependence on agriculture in middle-income countries - Which factor is critical for sustainable economic growth?
A. Exploiting natural resources
B. Balancing economic growth with environmental preservation
C. Reducing education investments
D. Increasing short-term profits - What is the primary goal of the Sustainable Development Goals (SDGs)?
A. Promote global military cooperation
B. Reduce trade barriers among developed countries
C. End poverty, protect the planet, and ensure prosperity for all
D. Establish uniform GDP targets for all nations - What is the significance of foreign direct investment (FDI) for developing economies?
A. It reduces domestic employment
B. It brings capital, technology, and expertise
C. It increases government debt
D. It leads to trade restrictions - Which term refers to the ability of an economy to sustain its growth without depleting natural resources?
A. Inclusive growth
B. Sustainable development
C. Capital accumulation
D. Industrialization - Which global institution monitors economic stability and provides financial assistance to countries in crisis?
A. World Health Organization (WHO)
B. International Monetary Fund (IMF)
C. World Bank
D. United Nations Development Programme (UNDP) - What is “informal economy”?
A. Large-scale industries operating legally
B. Economic activities that are not regulated or taxed by the government
C. International trade agreements
D. Technology-driven enterprises - Which of the following is a direct outcome of improved healthcare in a country?
A. Increased unemployment rates
B. Higher labor productivity
C. Decrease in literacy rates
D. Reduction in trade deficits - What is one common issue with measuring GDP?
A. It underestimates trade activities.
B. It does not consider environmental degradation.
C. It includes non-market transactions.
D. It ignores export contributions. - Which is an example of economic inequality?
A. Equal income across all sectors
B. Disparity in wealth between urban and rural areas
C. Uniform distribution of healthcare resources
D. Equal access to education - Which policy can directly stimulate economic growth?
A. Increasing trade tariffs
B. Investing in research and development
C. Reducing access to education
D. Imposing stricter labor laws - What does the term “economic convergence” refer to?
A. All nations experiencing identical growth rates
B. Poorer economies growing faster and catching up with richer economies
C. Reduction in global trade
D. Uniform inflation rates across nations - Which factor best supports human capital development in an economy?
A. Limited access to healthcare
B. High-quality education systems
C. Reduced trade partnerships
D. High inflation rates