Which of the following stands true for income inequality?
a. The benefits of increased economic growth are widely shared in the First World countries.
b. As a result of globalization, income inequality in China has decreased.
c. The decrease in income inequality in China is an effect of socialist policies in that country.
d. The gap between rich countries and globalized developing countries has shrunk.
e. Internal migration has played a big role in reducing the income inequality in China.
Question 2If a negative externality results from the refining of oil, the cost of production as seen by the oil refinery:
a. does not include the external cost.
b. includes the external cost.
c. does not include the external benefit.
d. includes the external benefit.
Question 3Rational expectation theory implies that accurately anticipated change in aggregate demand:
a. will increase RGDP in the short run.
b. will affect RGDP and inflation only in the long run.
c. may affect RGDP but not nominal GDP in the short run.
d. will do none of the above.
Question 4According to evidence from around the world, the real losers in globalization of the world economy are:
a. non-government organizations.
b. environmental activists.
c. skilled laborers in the globalizing nations.
d. countries that have not participated in the globalization process.
e. the poorest people in the globalized developing countries.
Question 5If education produces positive externalities and the government does not intervene in the market, we would expect
a. the market equilibrium price to be higher than the efficient equilibrium price.
b. the market equilibrium quantity to be lower than the efficient equilibrium output level.
c. the market equilibrium quantity to be higher than the efficient equilibrium output level.
d. none of the above
Question 6Rational expectation theory implies that accurately anticipated change in aggregate demand:
a. will increase RGDP in the long run.
b. will affect RGDP and inflation only in the long run.
c. may affect RGDP but not nominal GDP.
d. will tend to be offset by the actions of input suppliers as they react to their inflation expectations.
Question 7Which of the following is one of the most important causes for the recent increase in income inequality in China?
a. The introduction of free markets while imposing restrictions on internal migration
b. The introduction of regulations that do not allow families to have more than one child
c. Globalization
d. The increase in pollution as a result of industrialization
e. Tougher government controls on the banking system
Question 8As a result of technology spillovers: Taxes may move us closer to the efficient output level in such industries.
a. Other members of society bear external costs.
b. Too much production takes place in the high technology areas.
c. Taxes may move us closer to the efficient output level in such industries.
d. None of the above are true.
Question 9Which of the following statements was probably made by an adherent of rational expectations?
a. It is rational to pursue any full employment policy because more employment is better than less.
b. Unemployment is clearly a case of market failure.
c. Programs designed to stimulate employment will only stimulate the price level with no employment gain.
d. It is inhumane to have a single person unemployed whatever the inflation cost.
Question 10The World Bank tracked the performance of countries that had undergone varying degrees of globalization since the 1960s. Which of the following was a conclusion of the study?
a. The process of globalization widened the gap between rich countries and poor countries.
b. The growth rates of globalizing countries were higher than the growth rates of nonglobalizers.
c. The fraction of the very poor increased in newly globalized economies.
d. Globalization increased income inequality.
e. Unemployment increased in newly globalized countries.
Question 11Technology spillovers:
a. Are caused by patents.
b. Can lead to clustering of technology firms near one another.
c. Are examples of negative externalities.
d. All of the above are true.
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