Question 1

According to the Human Development Index, average income adjusted for PPP should be sufficient to
A) provide basic needs such as food and shelter.
B) promote economic development.
C) foster decentralization.
D) boost social class.
E) foster entrepreneurial dynamism.

Accepted Answer

The Human Development Index (HDI) considers average income adjusted for purchasing power parity (PPP) to ensure that individuals can meet their basic needs, such as food and shelter, which are essential for a decent standard of living.

Question 2

State-owned enterprises still dominate the banking and health care industries in China.

Accepted Answer

State-owned enterprises (SOEs) continue to play a significant role in China's banking and healthcare sectors, reflecting the government's control and influence in these critical industries.

Question 3

In 2017, if the GNI per capita of India was $1,820 and its PPP per capita was $7,060, this means that the cost of living in India was lower than the cost of living in
A) China.
B) Great Britain.
C) Germany.
D) the United States.
E) the rest of the world.

Accepted Answer

PPP per capita takes into account the cost of living in different countries. A higher PPP per capita indicates a lower cost of living. India's PPP per capita of $7,060 is lower than that of the United States, which is around $63,000. This means that the cost of living in India is lower than that in the United States.

Question 4

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of ________ in various countries.
A) living standards
B) population density
C) geographical area
D) factor endowments
E) labor productivity

Accepted Answer

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of living standards in various countries.

Question 5

Amartya Sen believed that ________ should also be a factor in the human development index.
A) birth rates
B) political freedom
C) educational attainment
D) basic average income
E) geographical conditions

Accepted Answer

Amartya Sen emphasized the importance of political freedom as a crucial factor in human development, advocating for its inclusion in the Human Development Index to reflect a more comprehensive understanding of human well-being.

Question 6

________ is broadly defined as the development of new products, processes, organizations, management practices, and strategies.
A) Privatization
B) Dynamism
C) Demographics
D) Innovation
E) Benchmarking

Accepted Answer

Innovation is the development of new products, processes, organizations, management practices, and strategies.

Question 7

It is more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses.

Accepted Answer

In undeveloped economies, businesses often face higher costs due to inadequate infrastructure, limited access to resources, and the absence of a robust network of supporting businesses, which can increase operational expenses.

Question 8

As a result of ________, large amounts of economic activity in India are not made official and the GDP figures of the country fail to tell the entire story of the economy.
A) a large population
B) unrecorded cash transactions
C) deregulation
D) nationalization
E) closed totalitarianism

Accepted Answer

Unrecorded cash transactions contribute to the informal economy, which is not captured in official GDP figures, leading to an incomplete representation of economic activity.

Question 9

In 2017, if the PPP per capita of China was $16,760 and the PPP per capita of the United States was $60,200, this means that the
A) GNI per capita was greater in China.
B) percent of goods and services consumed in the United States was lower.
C) standard of living in China was better.
D) cost of living was lower in China.
E) annual average GDP growth rate was lower in China.

Accepted Answer

The PPP per capita indicates that the cost of living is lower in China compared to the United States, as it adjusts for price level differences across countries.

Question 10

Traditional grocery stores now have to compete with Amazon's front-door delivery services. As a result, many grocery stores now offer online ordering and home delivery. This new strategy is an example of
A) privatization.
B) economic deregulation.
C) purchasing power parity.
D) innovation
E) benchmarking.

Accepted Answer

This strategy is an example of innovation as grocery stores are adopting new methods to compete with Amazon's delivery services by offering online ordering and home delivery.

Question 11

Gross national income figures should be carefully evaluated because they don't take into account differences in
A) the available workforce.
B) government intervention.
C) the cost of living.
D) market conditions.
E) political power.

Accepted Answer

Gross national income figures do not account for differences in the cost of living, which can vary significantly between countries and affect the real purchasing power of income.

Question 12

The country of Jinret is classified as having low human development (the quality of life is poor). This means its HDI is
A) a score of less than 0.5 on the HDI scale.
B) around 6.0.
C) greater than 5.0 but less than 7.0.
D) around 80.
E) in the bottom 60 percentile.

Accepted Answer

The Human Development Index (HDI) is a composite index measuring average achievement in key dimensions of human development. A score of less than 0.5 on the HDI scale indicates low human development.

Question 13

To calculate purchasing power parity, the figure is adjusted based on
A) the trading value of gold in the exchange market.
B) the median cost of living in the top five economic nations.
C) the status of the cost of living in the United States
D) average daily exchange rates in the selected nation.
E) limits set by each nation's government.

Accepted Answer

Purchasing power parity (PPP) is adjusted based on the cost of living in the United States as a reference point to compare the relative value of currencies and the cost of living between countries.

Question 14

The three measures of the ________ are life expectancy at birth, educational attainment, and average incomes based on PPP estimates.
A) Human Development Index
B) Gross National Income
C) Gross Domestic Product
D) Cost of Living Index
E) Cash Reserve Ratio

Accepted Answer

The Human Development Index (HDI) measures life expectancy at birth, educational attainment, and average incomes based on PPP estimates to assess the social and economic development of countries.

Question 15

Privatization occurs when state-owned property is transferred into the hands of individuals.

Accepted Answer

Privatization involves the transfer of ownership of property or businesses from the government to private individuals or organizations.

Question 16

Social unrest and disorder are less likely to be found in countries that contain more than one ethnic nationality.

Accepted Answer

Countries with multiple ethnic nationalities can experience social unrest and disorder due to potential ethnic tensions, competition for resources, and differing political interests.

Question 17

One common measure of economic development is a country's
A) gender ratio.
B) gross national income.
C) infant mortality rate.
D) population density.
E) total geographical area.

Accepted Answer

Gross national income is a common measure of economic development because it measures the total value of goods and services produced in a country in a given year.

Question 18

A country's ________ measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country.
A) income elasticity of demand
B) gross national product
C) net cash flow ratio
D) gross national income
E) income equity ratio

Accepted Answer

Gross national income measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country.

Question 19

It is predicted that China will surpass the United States and become the world's largest national economy within the next two decades.

Accepted Answer

Economic forecasts and trends suggest that China's rapid growth and development could lead it to surpass the United States as the largest economy, considering factors like GDP growth rates and purchasing power parity.

Question 20

A black economy occurs when
A) large amounts of economic activity are in the form of legally recorded cash transactions.
B) citizens engage in barter agreements to avoid paying taxes.
C) a country's GNI per capita exceeds $30,000.
D) the expenses of the government are less than its income.
E) a country has a trade surplus with another foreign country.

Accepted Answer

A black economy occurs when economic activities are conducted outside the formal economy to avoid taxes and regulations, often involving barter or unrecorded cash transactions.

Quiz 3: National Differences in Economic Development

According to the Human Development Index, average income adjusted for PPP should be sufficient to

State-owned enterprises still dominate the banking and health care industries in China.

In 2017, if the GNI per capita of India was $1,820 and its PPP per capita was $7,060, this means that the cost of living in India was lower than the cost of living in

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of ________ in various countries.

Amartya Sen believed that ________ should also be a factor in the human development index.

________ is broadly defined as the development of new products, processes, organizations, management practices, and strategies.

It is more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses.

As a result of ________, large amounts of economic activity in India are not made official and the GDP figures of the country fail to tell the entire story of the economy.

In 2017, if the PPP per capita of China was $16,760 and the PPP per capita of the United States was $60,200, this means that the

Traditional grocery stores now have to compete with Amazon's front-door delivery services. As a result, many grocery stores now offer online ordering and home delivery. This new strategy is an example of

Gross national income figures should be carefully evaluated because they don't take into account differences in

The country of Jinret is classified as having low human development (the quality of life is poor) . This means its HDI is

To calculate purchasing power parity, the figure is adjusted based on

The three measures of the ________ are life expectancy at birth, educational attainment, and average incomes based on PPP estimates.

Privatization occurs when state-owned property is transferred into the hands of individuals.

Social unrest and disorder are less likely to be found in countries that contain more than one ethnic nationality.

One common measure of economic development is a country's

A country's ________ measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country.

It is predicted that China will surpass the United States and become the world's largest national economy within the next two decades.

A black economy occurs when