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Macroeconomics, 2e (Acemoglu)
Chapter 7 Economic Growth
7.1 The Power of Economic Growth
1) Real GDP refers to GDP adjusted for changes in ________.

A) tax rates
B) prices
C) net imports
D) ruling political party
Answer: B
Difficulty: Easy
AACSB: Analytical Thinking
Topic: The Power of Economic Growth
2) Changes in the price level are the sole factor in determining ________.
A) nominal GDP
B) monetary policy
C) real GDP
D) trade policy
Answer: B
Difficulty: Easy
3) Comparing GDPs over time requires the use of a ________.

A) base year
B) recession and boom period
C) worker productivity index
D) linear growth model
Answer: A
Difficulty: Easy
4) The advantage of using real GDP over nominal GDP is that it ________.
A) is easier to calculate
B) can be compared over time
C) takes the distribution of income into account
D) takes into account changes in the ruling political party
Answer: B
Difficulty: Easy
1
Copyright © 2018 Pearson Education, Inc.
5) Economic growth refers to an increase in ________.
A) prices
B) tax rates
C) population
D) GDP per capita
Answer: D
Difficulty: Easy
6) Country A's GDP per capita at the beginning of 2005 was $22,150. At the beginning of 2006, it increased
to $27,600. Calculate Country A's growth rate of GDP per capita between 2005 and 2006.
Answer: In this case, the growth rate of GDP per capita of Country A = ($27,600 − $22,150)/$22,150 =
0.2460 = 24.60 percent.
Difficulty: Easy
AACSB: Application of Knowledge
7) Suppose the annual growth rate of an economy is expected to be 3 percent. This implies that the
economy's ________ is expected to ________ by 3 percent annually.
A) GDP per capita; increase
B) price level; increase
C) capital stock; increase
D) unemployment rate; decline
Answer: A
Difficulty: Easy
8) Which of the following statements is true of the U.S. economy over the past 200 years?
A) Its GDP per capita has increased.
B) Its GDP per capita has decreased.
C) There has been no contraction in the economy.
D) The growth rate of GDP has been more than 10 percent per year.
Answer: A
Difficulty: Easy
Topic: A First Look at U.S. Growth
9) Which of the following characterized the U.S. economy in the decades following the Great Depression?
A) The price level has decreased steadily over time.
B) Despite fairly constant growth, major economic downturns have produced net negative growth.
C) The economy was permanently and irreparably damaged by the events of the Great Depression.
D) Longer-run movements have indicated sustained and steady growth.
Answer: D
Difficulty: Easy
2
10) If GDP per capita in year T is represented by YT and the GDP per capita in the following year is
represented by YT+1, then the formula for calculating the growth rate between these two years is
________.
A) (YT+1/YT)/100
B) (YT+1 − YT )/YT
C) (YT+1 + YT)/YT
D) (YT+1 + YT)/YT+1
Answer: B
Difficulty: Easy
The following table shows the GDP per capita of country X for 3 years.
Year GDP per capita

2015 $1,500
2016 $1,745
2017 $2,050
11) Refer to the table above. At what rate did the country grow between 2015 and 2016?
A) 12.45 percent
B) 15.95 percent
C) 16.33 percent
D) 18 percent
Answer: C
Difficulty: Medium
12) Refer to the table above. At what rate did the country grow between 2016 and 2017?
A) 13.63 percent
B) 15.55 percent
C) 17.47 percent
D) 19.24 percent
Answer: C
Difficulty: Medium
13) Refer to the table above. If country X is expected to grow by 19 percent between the years 2017 and
2018, what is the expected GDP per capita for the year 2008?
A) $1,882
B) $2,439.50
C) $2,763.90
D) $3,015
Answer: B
Difficulty: Medium
3
14) Which statement best describes the effect of the Great Depression on U.S. growth?
A) The Great Depression reversed all growth that had been experienced over the previous 100 years.
B) The U.S. economy grew at the same rate during the Great Depression as during the rest of the
twentieth century.
C) The Great Depression temporarily reversed U.S. growth, but the U.S. economy grew steadily before
and after it.
D) The Great Depression led to slow growth in the U.S. for the following 50 years.
Answer: C
Difficulty: Easy
15) Which of the following describes the effect of the Great Depression on economic growth?
A) The Great Depression resulted in permanently lower growth rates for the United States.
B) The Great Depression halted permanently the United States' sustained growth.
C) The Great Depression began the United States' sustained growth.
D) The Great Depression was a temporary event with no long-run effect on economic growth.
Answer: D
Difficulty: Medium
16) The annual growth rate of U.S. real GDP per capita over the past 60 years has averaged around
________.
A) 0 percent
B) 2 percent
C) 4 percent
D) 6 percent
Answer: B
Difficulty: Easy
17) Suppose GDP per capita is $2,500 in 1912 and $2,550 in 1913. The growth rate of GDP per capita from
1912 to 1913 is ________.
A) 0.02 percent
B) 2 percent
C) 5 percent
D) 50 percent
Answer: B
Difficulty: Easy
4
18) Decreases in the standard of living are associated with what sort of economic growth?
A) Slow economic growth
B) Sustained economic growth
C) Negative economic growth
D) Zero economic growth
Answer: C
Difficulty: Easy
19) The process by which a quantity grows at a constant proportion in every time period is called
________ growth.
A) linear
B) catch-up
C) exponential
D) logarithmic
Answer: C
Difficulty: Easy
Topic: Exponential Growth
20) The ________ nature of economic growth is one of the major reasons there are large differences in
GDP per capita across countries.
A) linear
B) exponential
C) logarithmic
D) quadratic
Answer: B
Difficulty: Medium
21) If the effects of the growth in a variable are approximately constant, then the growth is likely to be
________.
A) linear
B) negligible
C) exponential
D) logarithmic
Answer: C
Difficulty: Easy
5
22) Exponential growth implies that ________.
A) growth rates can only be positive
B) growth rates will alternate between positive and negative values in every consecutive time period
C) relatively large differences in growth rates will translate into small differences in the level of a quantity
after many years of growing
D) relatively small differences in growth rates will translate into large differences in the level of a
quantity after many years of growing
Answer: D
Difficulty: Medium
23) When current growth builds on past growth, growth is ________.

A) exponential
B) linear
C) logarithmic
D) negative
Answer: A
Difficulty: Easy
24) Which of the following statements is true?

A) To depict variables that have exponential growth, it is more convenient to use an axis with a linear
scale.
B) To depict variables that have exponential growth, it is more convenient to use an axis with a
proportional scale.
C) Exponential growth refers to growth by the same amount in every time period.
D) Linear growth refers to growth by the same proportion in every time period.
Answer: B
Difficulty: Easy
25) Refer to the scenario above. What will be the GDP per capita of Country A at the beginning of year 3?
A) $2,410.26
B) $2,546.16
C) $2,760.24
D) $2,800.00
Answer: B
Difficulty: Medium
6
26) Refer to the scenario above. What will be the GDP per capita of Country B at the beginning of year 3?
A) $2,450.65
B) $2,555.15
C) $2,646.00
D) $2,882.85
Answer: C
Difficulty: Medium
27) Refer to the scenario above. What will be the difference in the GDPs per capita of both countries at the
beginning of year 3?
A) $8.99
B) $30.39
C) $99.84
D) $339.69
Answer: C
Difficulty: Medium
28) Refer to the scenario above. Which of the following statements is true?
A) The gap between the GDP per capita of both countries will converge over time.
B) The gap between the GDP per capita of both countries will diverge over time.
C) The gap between the GDP per capita of both countries will remain the same over time.
D) In 30 years, the GDP per capita of Country A is likely to be higher than that of Country B.
Answer: B
Difficulty: Medium
29) Which characteristic of economic growth is responsible for the large differences in GDP per capita
across countries?
Answer: Economic growth is exponential in nature, and this is one of the major reasons for the large
differences in GDP per capita across countries. When an economy grows exponentially, new growth
builds on past growth and the effects of growth compound. Thus relatively modest differences in growth
rates translate into large differences in the level of GDP per capita after many years of growing.
Difficulty: Medium
7
The following figure shows graphs of various types of growth.
30) Refer to the figure above. The data in Graph A best represent ________.
A) linear growth
B) no growth
C) exponential growth
D) exponential decline
Answer: C
Difficulty: Easy
31) Refer to the figure above. The data in Graph B best represent ________.
A) linear growth
B) no growth
Answer: A
Difficulty: Easy
32) Refer to the figure above. The data in Graph C best represent ________.
A) linear growth
B) no growth
Answer: B
Difficulty: Easy
8
33) Refer to the figure above. The data in Graph D best represent ________.
A) linear growth
B) no growth
Answer: D
Difficulty: Easy
34) GDP per capita in Australia is $50,000. If Australian GDP per capita grows 6 percent per year for 2
years, which formula shows its GDP per capita after 2 years?
A) $50,000 × 1.06
B) $50,000 × 1.12
C) $50,000 × 1.06 × 1.06
D) $50,000 × 1.06 × 1.12
Answer: C
Difficulty: Easy
35) Initially Country A has a greater GDP per capita than Country B, but the growth rate in Country A is
only 1 percent, while it is 2 percent in Country B. If these growth rates continue forever, which of the
following is correct?
A) Country A will always have a higher GDP per capita than Country B.
B) Country B will not be able to sustain such a high growth rate.
C) The GDP per capita in Country B will eventually catch up to, but not overtake, that of Country A.
D) The GDP per capita in Country B will eventually overtake that of Country A.
Answer: D
Difficulty: Easy
Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500.
36) Refer to the scenario above. If the world sustains this growth rate, approximately what will world
GDP per capita be in 2020?
A) $13,500
B) $15,000
C) $16,400
D) $19,000
Answer: C
Difficulty: Easy
9
37) Refer to the scenario above. If the world sustains this growth rate, approximately what will world
GDP per capita be in 2030?
A) $16,400
B) $17,500
C) $21,500
D) $28,300
Answer: D
Difficulty: Medium
Scenario: In 2010, world GDP per capita was $9,500. In the same year, the Economist magazine forecast
that in 2020, world GDP per capita would be $15,000
38) Refer to the scenario above. If the Economist magazine's forecast is correct, then the growth rate per
decade from 2010 to 2020 would be approximately ________.
A) 5 percent
B) 6 percent
C) 50 percent
D) 60 percent
Answer: D
Difficulty: Easy
39) Refer to the scenario above. The Economist magazine also forecasts that the rate of growth will remain
constant through 2030. If this is correct, then world GDP per capita in 2030 will be closest to ________.
A) $20,000
B) $22,000
C) $24,000
D) $26,000
Answer: C
Difficulty: Medium
Scenario: In 2000, the GDP per capita in Ohio is $35,000. Ohio's GDP per capita is predicted to increase 3
percent per year for the next 5 years.
40) Refer to the scenario above. If the prediction in the scenario is correct, by approximately what
percentage will Ohio's GDP per capita rise in 2005?
A) 15 percent
B) 16 percent
C) 17 percent
D) 18 percent
Answer: B
Difficulty: Medium
10
41) Refer to the scenario above. If the prediction in the scenario is correct, what will Ohio's GDP per
capita be in 2005 (to the nearest thousand)?
A) $39,000
B) $40,000
C) $41,000
D) $42,000
Answer: C
Difficulty: Medium
42) California's GDP per capita is $60,000, while Nevada's GDP per capita is $40,000. If both grow at 2
percent per year, how long will it take for the two states to have the same GDP per capita?
A) 25 years
B) 35 years
C) 50 years
D) They will never have the same GDP per capita
Answer: D
Difficulty: Medium
43) Suppose that a nation's GDP per capita grows at a constant 4 percent per year. You graph the nation's
GDP per capita on a graph with a linear time scale on the x-axis, and a linear GDP per capita scale on the
y-axis. What will the nation's GDP per capita look like on the graph?
A) A horizontal line
B) A straight upward-sloping line
C) A curve that is sloped upward and increasing in slope
D) A curve that is sloped upward and decreasing in slope
Answer: B
Difficulty: Easy
44) Suppose that a nation's GDP per capita grows at a constant 4 percent per year. You graph the nation's
GDP per capita on a graph with a linear time scale on the x-axis, and a proportional GDP per capita scale
on the y-axis. What will the nation's GDP per capita look like on the graph?
A) A horizontal line
B) A straight upward-sloping line
C) A curve that is sloped upward, and increasing in slope
D) A curve that is sloped upward, and decreasing in slope
Answer: C
Difficulty: Easy
11
45) Cross-country comparison of GDP per capita between 1960 and 2010 shows that countries such as
________ have grown at negative rates during this period.
A) Mexico and Brazil
B) Haiti and the Democratic Republic of Congo
C) India and China
D) South Korea and Singapore
Answer: B
Difficulty: Medium
Topic: Patterns of Growth
46) While countries like Botswana and Singapore have experienced rapid growth rates since 1960, the
growth of the Democratic Republic of the Congo is best described as ________.
A) steady
B) slow
C) negative
D) linear
Answer: C
Difficulty: Medium
47) The growth process whereby relatively poorer nations increase their income by taking advantage of
knowledge and technologies already invented in other, technologically more advanced countries is
known as ________ growth.
A) transfer
B) catch-up
C) trade-based
D) innovative
Answer: B
Difficulty: Easy
48) Catch-up growth is characterized by disparities in growth levels, magnified by the ________ nature of
economic growth.
A) disproportionate
B) exponential
C) homogenous
D) linear
Answer: B
Difficulty: Easy
12
49) Singapore had a GDP per capita of $395 in 1960. It then started taking advantage of knowledge and
technologies already invented in other technologically advanced countries. In 2013, its GDP per capita
had increased to $52,918. The growth in Singapore's average per capita GDP is considered to be ________
growth.
A) catch-up
B) sustained
C) instant
D) disguised
Answer: A
Difficulty: Medium
50) Sustained growth refers to a growth process in which ________.

A) GDP per capita grows at a positive and steady rate for long periods of time
B) GDP per capita grows at a rate of more than 20 percent per year for long periods of time
C) growth in GDP per capita is primarily attributed to public sector firms and enterprises
D) growth in GDP per capita is translated into an equal increase in welfare for all citizens in a country
Answer: A
Difficulty: Medium
51) The implied growth rate for a country between 1960 and 2010 was 6 percent. This implies that
________.
A) the country grew by at least 6 percent in any of the 50 years between 1960 to 2010 to reach the level of
GDP in 2010 starting at the 1960 level
B) the growth rate of GDP in the country was above 6 percent between 1960 and 2010
C) the country grew at an average rate of 6 percent per year between 1960 and 2010 to reach the 2010 level
of GDP starting at the 1960 level
D) the country grew at rates above 6 percent per year between 1960 and 2010 to reach the 2010 level of
GDP starting at the 1960 level
Answer: C
Difficulty: Easy
52) Country A's GDP per capita is 80 percent of Country B's GDP per capita. If both countries experience
growth of 5 percent, Country A's GDP per capita will now be what percentage of Country B's GDP per
capita?
A) 75 percent
B) 80 percent
C) 85 percent
D) 90 percent
Answer: B
Difficulty: Easy
13
53) The countries that have experienced fast growth in GDP per capita over the past 50 years are mostly
located where?
A) Central America
B) East Asia
C) West Africa
D) South America
Answer: B
Difficulty: Medium
54) "Catch-up growth" refers to a process where relatively poorer nations increase their incomes by
________.
A) working harder than more advanced nations
B) extracting more natural resources than more advanced nations
C) having higher birthrates than more advanced nations
D) using technologies from more advanced nations
Answer: D
Difficulty: Easy
55) Which of the following pairs of countries has used catch-up growth over the past few decades to
achieve incomes that are now comparable to that of the United States?
A) Singapore and South Korea
B) Mexico and Brazil
C) The United Kingdom and France
D) Kenya and Rwanda
Answer: A
Difficulty: Easy
56) U.S. GDP per capita has increased approximately 2 percent per year over an extended period. This is a
good example of what sort of growth?
A) Catch-up growth
B) Power growth
C) Linear growth
D) Sustained growth
Answer: D
Difficulty: Easy
14
57) China's GDP per capita is currently lower than that of Japan. If Japanese GDP per capita grows at 2
percent per year, how fast must Chinese GDP per capita grow to eventually catch up to Japanese GDP
per capita?
A) At least 5 percent per year
B) At least 3 percent per year
C) Any rate above 2 percent per year
D) Any positive rate
Answer: C
Difficulty: Easy
58) How does the concept of catch-up growth explain the diminishing income gap between developing
economies and developed economies?
Answer: Catch-up growth refers to the process whereby relatively poorer nations increase their incomes
by taking advantage of knowledge and technologies already invented in other, technologically more
advanced countries. Developing economies undergoing catch-up growth do so mostly by benefiting from
technologies that are already available in developed economies. In addition to using technology transfers,
if these economies increase their saving rates, efficiency units of labor, and efficiency of production, they
can catch up with the developed economies. Many economies have been doing so, and over time, this
process has caused the income gap between the developing economies and developed economies to
diminish.
Difficulty: Medium
15
59) The following table shows the GDP per capita of various countries for the years 1960 and 2010 in PPP-
adjusted 2005 dollars. The table also contains the implied growth rates, which show how much on
average each country needed to grow each year to reach the 2010 level of GDP per capita starting from
the 1960 level of GDP per capita. Use the table to answer the following questions.
a) During 1960-2010, which countries were able to reduce the gap between their GDP per capita and the
U.S. GDP per capita?
b) During 1960-2010, which countries failed to reduce the gap between their GDP per capita and the U.S.
GDP per capita?
c) Why have some countries reduced the gap between their incomes and that of the United States and
other countries failed to do so?
Answer:
a) From the data, it can be inferred that Singapore and China have reduced the gap between their GDP
per capita and U.S. GDP per capita over the given time period.
b) From the data, it can be inferred that Kenya, Haiti, and Ghana have failed to reduce the gap between
their GDP per capita and U.S. GDP per capita over the given time period.
c) Some countries have reduced the gap between their incomes and that of the United States while other
countries have failed to do because of the nature of economic growth. Economic growth is exponential in
nature. Thus, countries that have experienced a higher average growth rate than that of the United States
have caught up with the United States. In contrast, countries with an average annual growth rate that is
less than that of the United States have failed to catch up with the United States. Instead, the gap between
their incomes has increased. Thus, exponential growth is mainly responsible for the differences in GDP
per capita across countries; it is also the reason some countries have been able to catch up with the world
leaders in terms of GDP per capita and some have not.
Difficulty: Medium
16
60) The following table shows the GDP per capita since 1820 in selected countries (in PPP-adjusted 2005
dollars).
Average Average
Country 1820 1870 1920 1970 2010 growth (1820— growth (1920—
2010) 2010)
United
$1,873 $3,365 $7,641 $20,684 $41,961 1.65 percent 1.91 percent
States
United
$2,854 $4,390 $6,259 $14,817 $32,722 1.29 percent 1.85 percent
Kingdom
China $826 $729 $760 $1,071 $11,054 1.37 percent 3.02 percent
Mexico $863 $896 $2,509 $5,945 $10,619 1.33 percent 1.62 percent
a) Identify the countries that experienced sustained growth between 1820 and 2010.
b) Identify the countries that experienced sustained growth from 1920 to 2010.
c) Identify the countries that experienced catch-up growth from 1920 to 2010.
Answer:
a) Sustained growth refers to a process in which GDP per capita increases at a positive and steady rate for
long periods of time. From the given data, it can be inferred that only the United States, the United
Kingdom, and Mexico have experienced steady and positive growth rates since 1820 to 2010. Hence, these
are the three countries that have experienced sustained growth since 1820 to 2010. China has not
experienced sustained growth because the country's GDP per capita declined in 1870 compared to its
1820 level.
b) All four countries listed in the table have grown at steady and positive rates from 1920 to 2010. Thus,
they have experienced sustained growth during this period.
c) Catch-up growth refers to a process whereby relatively poorer nations increase their incomes by taking
advantage of knowledge and technologies already invented in other, technologically more advanced
countries. In this case, the most advanced country is the United States, as it has the highest GDP per
capita. The only country to have experienced average growth that is higher than that of the United States
from 1920 to 2010 is China. China has reduced the gap in GDP per capita between itself and the United
States; it is the only country listed in the table to have experienced catch-up growth from 1920 to 2010.
Difficulty: Hard
17
61) Consider two economies: Barylia and Lithasia. The GDP per capita in Lithasia is $6,000, while the
GDP per capita in Barylia is $12,000. Both countries grow exponentially at an annual rate of 10 percent.
How will their GDPs vary over the next year? Is there any limitation to comparing the absolute levels of
GDP per capita of both countries over the next years? If yes, what is a plausible solution?
Answer: The GDP per capita of Lithasia after 1 year will be $6,000 + $600 = $6,600.
The GDP per capita of Barylia after 1 year will be $12,000 + $1,200 = $13,200.
Initially, the gap between the GDP per capita of both countries was $12,000 − $6,000 = $6,000.
A year hence, the gap between the GDP per capita of both countries will be $13,200 − $6,600 = $6,600.
Hence, over 1 year, the gap between the GDP per capita of both countries will increase by $600.
The ratio of GDP per capita of Barylia to that of Lithasia after 1 year = $13,200/$6,600 = 2.
Hence, even after a year, the GDP per capita of Barylia will still be twice that of Lithasia.
This implies that the relative GDPs of both nations will remain stable although the absolute gap will
increase. Thus, comparing absolute levels of GDP per capita will not lead us to an accurate conclusion. In
the presence of exponential growth, even though relative GDPs remain stable, the absolute gaps in the
GDPs of both countries can increase. For this reason, a better statistic to be considered is the ratio of the
two countries' GDP per capita.
Difficulty: Hard
Topic: Letting the Data Speak: Levels versus Growth
7.2 How Does a Nation's Economy Grow?
1) Assuming all else equal, if the production technology available to a nation improves, its ________.
A) GDP decreases
B) stock of physical capital decreases
C) GDP increases
D) population increases
Answer: C
Difficulty: Easy
Topic: How Does a Nation's Economy Grow?
2) The value of all equipment and structures in an economy is referred to as its ________.
A) national income
B) physical capital stock
C) wealth
D) asset value
Answer: B
Difficulty: Easy
18
3) The process by which the stock of equipment and structures available to an economy is increased by
investment is referred to as ________.
A) investment growth
B) output expansion
C) physical capital accumulation
D) autonomous growth
Answer: C
Difficulty: Easy
4) In a closed economy, ________ equal to zero.

A) investment is
B) consumption is
C) net exports are
D) government spending is
Answer: C
Difficulty: Easy
Scenario: In a closed economy without a government, the consumption expenditure equals $5,000 and the
investment expenditure equals $2,000.
5) Refer to the scenario above. What is the national income of the economy?
A) $2,000
B) $5,000
C) $7,000
D) $10,000
Answer: C
Difficulty: Easy
6) Refer to the scenario above. If the population of the economy is 200, the per capita national income is
________.
A) $10
B) $17
C) $35
D) $50
Answer: C
Difficulty: Easy
19
7) In a closed economy without a government, income equals aggregate ________.
A) consumption
B) saving
C) saving plus aggregate investment
D) saving plus aggregate consumption
Answer: D
Difficulty: Easy
8) In a closed economy without a government, ________.

A) consumption equals savings
B) consumption equals investment
C) saving equals investment
D) saving equals net exports
Answer: C
Difficulty: Easy
9) From the perspective of individual households, income can only be consumed or saved, the latter of
which become ________ utilized by firms.
A) investment
B) capital depreciation
C) intellectual property
D) interest rates
Answer: A
Difficulty: Easy

A) A nation with a high saving rate will accumulate capital slowly.
B) A nation with a high saving rate will accumulate capital rapidly.
C) In a closed economy, government spending equals zero.
D) In a closed economy, aggregate consumption equals zero.
Answer: B
Difficulty: Easy
20
11) Consider two countries, Country A and Country B, that are alike in most respects. However, the
saving rates in the two countries differ. Country A's saving rate is greater than Country B's saving rate.
Which of the following statements is true?
A) The rate of physical capital accumulation will be the same in both economies.
B) Physical capital accumulation will occur faster in Country A than in Country B.
C) Physical capital accumulation will occur faster in Country B than in Country A.
D) The growth rate in Country B is likely to be higher than the growth rate in Country A in the long run.
Answer: B
Difficulty: Medium
12) Explain how saving equals investment in a closed capitalist economy.

Answer: The national income identity is given by Y = C + I + G + NX, where C is consumption
expenditure, I is investment expenditure, G is government spending, and NX is net exports. In a closed
capitalist economy, G = NX = 0; hence, Y = C + I. In other words, GDP is the sum of aggregate
consumption expenditure and investment. It is also true that all the income generated in a closed
economy without government spending will be either consumed or saved. Hence, Y = C + S. Since Y = C +
S, Y = C + I, implying that S = I.
Difficulty: Medium
The following table shows levels of consumption and investment in four countries.
Country Country Country Country

A B C D
Consumption 200 2,200 2,000 5,200
Investment 600 3,000 1,200 4,200
13) Refer to the table above. Which country has the highest savings rate?
A) Country A
B) Country B
C) Country C
D) Country D
Answer: A
Difficulty: Medium
14) Refer to the table above. Which country has the lowest consumption rate?
A) Country A
B) Country B
C) Country C
D) Country D
Answer: A
Difficulty: Medium
21
15) Refer to the table above. Which country has the lowest savings rate?
A) Country A
B) Country B
C) Country C
D) Country D
Answer: C
Difficulty: Medium
16) Refer to the table above. Which country has the highest consumption rate?
A) Country A
B) Country B
C) Country C
D) Country D
Answer: C
Difficulty: Medium
17) A new coal-fired power plant will increase aggregate production. Which element of the aggregate
production function Y = A × F(K, H) will this power plant increase?
A) A
B) F
C) K
D) H
Answer: C
Difficulty: Medium
18) The saving rate indicates ________.

A) the fraction of income that households save
B) the difference between household consumption and savings
C) the rate of return households earn on their savings
D) the difference between government revenue and government expenditure
Answer: A
Difficulty: Easy
Topic: Optimization: The Choice Between Saving and Consumption
19) The rates of return that households expect on their savings are determined by ________.
A) tax rates
B) interest rates
C) exchange rates
D) the level of government expenditure
Answer: B
Difficulty: Easy
22
A) Higher interest rates typically encourage more savings.
B) The savings of households are independent of tax rates.
C) Households that expect an increase in future earnings are likely to save more.
D) An increase in the consumption of households increases the savings of the households.
Answer: A
Difficulty: Easy

A) If households expect higher taxes in the future, they will increase their current saving rate.
B) If households expect higher taxes in the future, they will decrease their current saving rate.
C) The saving rate of households is dependent only on current consumption expenditure.
D) The saving rate of households is dependent only on planned future consumption expenditure.
Answer: A
Difficulty: Easy
22) The saving rate in an economy equals ________.

A) GDP minus aggregate consumption
B) GDP divided by aggregate saving
C) aggregate saving multiplied by GDP
D) aggregate saving divided by GDP
Answer: D
Difficulty: Easy
23) If the aggregate saving in an economy is $1,750 and the GDP of the economy is $55,000, then the
saving rate in the economy is ________.
A) 1.8 percent
B) 3.18 percent
C) 8.96 percent
D) 10 percent
Answer: B
Difficulty: Easy
23
24) Consider a closed economy without a government. If the GDP of the economy is $63,000 and the
consumption in the economy is $45,000, the saving rate in the economy is ________.
A) 16.86 percent
B) 24 percent
C) 28.57 percent
D) 35.75 percent
Answer: C
Difficulty: Medium
25) Consider a closed economy without a government. If the GDP of the economy is $25,000 and the
saving rate in the economy is 25 percent, the aggregate saving in the economy is ________.
A) $3,320
B) $6,250
C) $8,000
D) $8,650
Answer: B
Difficulty: Easy
26) Consider a closed economy without the government. If the saving rate in the economy is 15 percent
and the aggregate saving is $6,000, the GDP of the economy is ________.
A) $15,000
B) $27,000
C) $30,000
D) $40,000
Answer: D
Difficulty: Hard
27) Consider a closed economy without a government. If the saving rate in the economy is 20 percent and
the aggregate saving is $10,000, the aggregate consumption in the economy is ________.
A) $10,000
B) $37,000
C) $50,000
D) $45,000
Answer: C
Difficulty: Hard
24
28) Define saving rate. If the aggregate saving in an economy is $10,000 and the aggregate income in the
economy is $70,000, what is the saving rate in the economy?
Answer: The saving rate refers to the fraction of income that households save. It can be obtained by
dividing aggregate saving by aggregate income. In this case, the saving rate = 10,000/70,000 = 0.1428 =
14.28 percent.
Difficulty: Easy
29) Consider two economies with the same GDP per capita: Barylia and Lithasia. The saving rate in
Barylia is 20 percent, while the saving rate in Lithasia is 60 percent.
a) Which of these two countries is likely to accumulate physical capital faster?
b) The government in Barylia decides to provide incentive to its citizens to increase the saving rate further
to 80 percent as a means of improving standards of living. Will the increase in saving translate into
improvements in the standard of living?
Answer:
a) The amount of physical capital accumulation in an economy is equal to the physical capital stock of the
previous year minus depreciated capital plus the level of investment in an economy. Hence, as the level
of investment increases, the amount of physical capital accumulation increases.
The investment in an economy equals I = Saving rate × GDP per capita.
Therefore, it can be inferred that the higher the saving rate is in an economy, the higher the investment
will be in the economy. Hence, the higher the saving rate is in an economy, the higher the physical capital
accumulation will be. Lithasia is likely to accumulate capital faster compared to Barylia.
b) The total amount of income in an economy is either consumed or saved. The standard of living in any
country is dependent on consumption and not on saving. Hence, if the government encourages
households to save more, increase in investment and output may not translate into improvements in
living standards of the people in the country.
Difficulty: Medium
30) The saving rate in France is currently 6 percent. Which event would most likely decrease the current
saving rate?
A) The interest rate in France decreases.
B) Economists forecast slowing growth in France next year.
C) The income tax rate in France is expected to increase next year.
D) French people anticipate strong future growth in France's economy.
Answer: D
Difficulty: Easy
25
31) Michael currently saves 5 percent of his income. Which of the following would likely lead Michael to
save more of his income than he currently does?
A) If the interest rate Michael could earn on his savings fell
B) If Michael learned he had just earned a promotion and a large increase in salary
C) If Michael anticipated that the tax rate on income in the future would fall
D) If Michael learned that his wife would have to stop working a year from now
Answer: D
Difficulty: Medium
32) In New Zealand, Total saving = $17 billion, while GDP = $150 billion. What is the New Zealand saving
rate, to the nearest percentage point?
A) 10 percent
B) 11 percent
C) 12 percent
D) 13 percent
Answer: B
Difficulty: Easy
33) In Australia, the saving rate is 15 percent, while GDP is $1.34 trillion. Total saving in Australia is
closest to ________.
A) $200 billion
B) $220 billion
C) $240 billion
D) $260 billion
Answer: A
Difficulty: Easy
34) In Fiji, total saving is $560 million, while GDP is $4.4 billion. In Papua New Guinea, total saving is
$2.4 billion, while GDP is $16.9 billion. Which of the following is true?
A) Fiji's saving rate is at least one percentage point higher than that of Papua New Guinea.
B) Papua New Guinea's saving rate is at least one percentage point higher than that of Fiji.
C) Fiji and Papua New Guinea have exactly the same saving rate.
D) Fiji and Papua New Guinea have saving rates that are less than one percentage point apart, but are not
exactly equal.
Answer: B
Difficulty: Medium
26
35) Which of the following would constitute empirical evidence that higher interest rates encourage more
saving?
A) A mathematical model in which there was a positive relationship between the interest rate and the
saving rate
B) A mathematical model in which there was a negative relationship between the interest rate and the
saving rate
C) A cross-country study showing a positive relationship between the interest rate and the saving rate
D) A cross-country study showing a negative relationship between the interest rate and the saving rate
Answer: C
Difficulty: Medium
36) Which of the following factors of production is least likely to exhibit diminishing marginal product?
A) Land
B) Labor
C) Physical capital
D) Technology
Answer: D
Difficulty: Easy
Topic: What Brings Sustained Growth?
37) Continuous increase in investment in ________ is most likely to cause sustained growth.
A) land
B) labor
C) physical capital
D) technology
Answer: D
Difficulty: Easy
38) Suppose the working-age population of a country doubles because of immigration. The country,
however, neglects investment in research and development (R&D), and hence, its level of technology
remains stagnant. Which of the following statements will be true of this economy?
A) The economy cannot achieve sustained growth.
B) The economy will experience steady economic growth.
C) The economy's output will rise at an increasing rate over time.
D) The saving rate will remain stagnant over the years.
Answer: A
Difficulty: Medium
27
39) Why is investing in technology as a means to sustained growth a better option than investing in labor
or capital?
Answer: The main reason investing in technology as a means to sustained growth is a better option than
investing in labor or capital is that investing in labor and capital is subject to diminishing marginal
product. This implies that the additional output generated by investing in an extra unit of capital or labor
diminishes with increasing capital and labor. Hence, growth cannot be sustained by investing only in
labor or capital. In contrast, investment in technology builds on previous stocks of technology. Hence,
technological growth is exponential in nature.
Difficulty: Medium
40) Which of labor and capital experiences diminishing marginal product?

A) Neither labor nor capital
B) Labor, but not capital
C) Capital, but not labor
D) Both labor and capital
Answer: D
Difficulty: Easy
41) Sustained growth is best achieved through which of the following?

A) Physical capital accumulation
B) Population increases
C) Increases in the quality and amount of education
D) Technological progress
Answer: D
Difficulty: Easy
42) Which of the following national priorities would be most likely to result in sustained growth?
A) Building new factories and infrastructure
B) Encouraging a high birthrate
C) Increasing the age at which students may leave school
D) Encouraging new knowledge creation
Answer: D
Difficulty: Medium
28
43) Why is physical capital accumulation alone unlikely to result in sustained growth?
A) Because of the diminishing marginal product of physical capital.
B) Because of the diminishing marginal product of labor.
C) Because of the eventual need to replace existing physical capital.
D) Because high levels of physical capital will tempt other countries to steal that capital.
Answer: A
Difficulty: Easy

A) An extremely high saving rate can be counterproductive for an economy.
B) The greater the saving rate in an economy, the slower the rate of physical capital accumulation.
C) For positive growth, the consumption in an economy should always be less than the saving.
D) The greater the consumption expenditure in an economy, the faster the physical capital accumulation.
Answer: A
Difficulty: Easy
Topic: Choice and Consequence: Is Increasing the Saving Rate Always a Good Idea?

A) Growth in technology is linear in nature.
B) Growth in technology is exponential in nature.
C) Growth in labor productivity is exponential in nature.
D) Growth in land productivity is exponential in nature.
Answer: B
Difficulty: Easy
Topic: Knowledge, Technological Change, and Growth
46) Suppose the growth in GDP per hour worked resulting from physical capital in an economy is 1
percent and the growth resulting from human capital is 2 percent. If the annual growth rate of GDP per
hour worked is 5 percent, the growth resulting from technology equals ________.
A) 1 percent
B) 2 percent
C) 3 percent
D) 4 percent
Answer: B
Difficulty: Medium
29
47) The price of making a telephone call has fallen dramatically over the past 100 years. This is best
explained by improvements in what?
A) Human capital
B) Education
C) Physical capital
D) Technology
Answer: D
Difficulty: Easy
48) The introduction of the assembly line allowed GDP per hour worked to increase substantially. This is
an example of an improvement in what?
A) Human capital
B) Physical capital
C) Technology
D) Education
Answer: C
Difficulty: Medium
49) Consider two countries: Country A and Country B. Assume that both countries are identical until the
year 2000. At the beginning of 2000, both countries decide to change their strategy for economic growth.
Country A plans to encourage immigration and increase human capital in the economy to achieve
sustained growth, while Country B decides to make large investments in R&D to achieve sustained
growth. Which of the two countries is more likely to experience sustained growth and why?
Answer: Among the two countries, country B is more likely to experience sustained growth. This is
because its approach to growth involves improving production technology, while country A's approach
involves increasing the total efficiency units of labor. Holding all other factors of production constant, if a
country increases its workforce, every additional worker will increase GDP by less and less because of
diminishing marginal product of total efficiency units of labor. In contrast, investment in R&D is likely to
increase the level of technology available in country B. Technology is a factor of production that exhibits
exponential growth. This is because new technology builds on existing technology. Since the growth in
technology is exponential, it is the only factor of production where improvements do not necessarily run
into diminishing marginal product. For this reason, country B, which is investing in technology, is more
likely to experience sustained growth.
Difficulty: Hard
50) ________ experiences a growth pattern similar to that of an economy.

A) Savings rate
B) Consumption rate
C) Efficiency units of labor
D) Technology
Answer: D
Difficulty: Easy
30
51) The price of a 3-pound chicken has fallen about 20 percent per decade over the past 70 years. This is
an example of the ________.
A) linear effect of technological change
B) exponential effect of technological change
C) linear effect of physical capital accumulation
D) exponential effect of physical capital accumulation
Answer: B
Difficulty: Medium
52) North Dakota's GDP per capita is $65,000, while South Dakota's GDP per capita is $48,000. Advances
in technology increase North Dakota's GDP per capita over the following decade to $78,000. If South
Dakota benefits in the same way from those technologies, what will South Dakota's GDP per capita be
after a decade?
A) $57,600
B) $61,000
C) $65,000
D) $78,000
Answer: A
Difficulty: Medium
53) This is the process that enables the economy to achieve a higher level of GDP for given levels of its
factors of production, physical capital stock, and total efficiency units of labor.
A) technological change
B) output multiplication
C) economic facilitation
D) offshoring
Answer: A
Difficulty: Easy
54) For the U.S. economy, on average, the growth resulting from technology is ________.
A) greater than the growth resulting from human capital
B) smaller than the growth resulting from physical capital
C) equal to the growth resulting from human capital
D) equal to the growth resulting from physical capital
Answer: A
Difficulty: Easy
Topic: Evidence-Based Economics: Why Are You So Much More Prosperous Than Your Great-Great-Grandparents
Were?
31
55) For the U.S. economy, on average, the growth resulting from ________.
A) technology is smaller than the growth resulting from human capital
B) technology is smaller than the growth resulting from physical capital
C) physical capital is greater than the growth resulting from human capital
D) physical capital is smaller than the growth resulting from human capital
Answer: C
Difficulty: Easy
Were?
56) Which of the following is true of the growth in the U.S. economy from 1950 to 2007?
A) Growth resulting from technology > growth resulting from human capital > growth resulting from
physical capital
B) Growth resulting from technology > growth resulting from physical capital > growth resulting from
human capital
C) Growth resulting from physical capital > growth resulting from technology > growth resulting from
human capital
D) Growth resulting from human capital > growth resulting from technology > growth resulting from
physical capital
Answer: B
Difficulty: Medium
Were?
57) Most of the growth in GDP per hour worked in the United States over the past several decades can be
attributed to growth resulting from ________.
A) physical capital
B) human capital
C) government policies
D) technology
Answer: D
Difficulty: Easy
Were?
58) During which period was the growth of U.S. GDP per hour worked the greatest?
A) The 1950s and 1960s
B) The 1970s and 1980s
C) The 1990s and 2000s
D) Growth was essentially equal during each of these periods
Answer: A
Difficulty: Medium
Were?
32
59) How much of the growth in U.S. GDP per hour worked over the past 60 years can be attributed to
technological progress?
A) Almost all of it
B) At least half, but not all
C) Less than half, but not none
D) Essentially none of it
Answer: B
Difficulty: Easy
Were?
7.3 The History of Growth and Technology
1) Which of the following statements is true of the U.S. economy before 1800?
A) There were no major achievements in arts in the U.S. economy.
B) There were no major achievements in science and technology in the U.S. economy.
C) Sustained economic growth was rare or absent in the U.S. economy.
D) The U.S. economy was growing at an average rate of more than 6 percent per year.
Answer: C
Difficulty: Easy
Topic: Growth Before Modern Times
2) The minimum level of income per person that is generally necessary for the individual to obtain
enough calories, shelter, and clothing to survive is referred to as the ________.
A) safety level of income
B) minimum wage rate
C) survival wage rate
D) subsistence level of income
Answer: D
Difficulty: Easy
3) Which of the following statements is true of economic growth and GDP across the world before 1800?
A) There was a lack of sustained growth because the pace of technological change was slow.
B) The income per capita in all countries throughout the world was less than $500 per capita.
C) The income per capita in all countries throughout the world was more than $1,000 per capita.
D) There was sustained growth because whatever improvements in GDP were realized were invested in
capital equipment.
Answer: A
Difficulty: Easy
33
4) Which of the following statements is true of world GDP before 1800?
A) Most of the countries were growing at a rate of more than 6 percent per year.
B) The GDP per capita in all nations across the world was less than $500.
C) The entire world population was living above the subsistence level of income.
D) An increase in GDP resulted in an increase in consumption but not investment.
Answer: D
Difficulty: Medium
5) What were the major reasons for the lack of sustained growth before modern times?
Answer: The two main reasons for the lack of sustained growth before modern times are as follows:
i) The pace of technological change before 1800 was slow and almost stagnant compared to what came
thereafter.
ii) Whatever improvements in income or GDP that were realized went to feeding an increasing
population rather than attempting to increase the GDP per capita.
Difficulty: Medium
6) The subsistence level of income is the minimum level of income per person that is generally necessary
to ________.
A) obtain enough calories, shelter, and clothing to survive
B) save for retirement
C) contribute meaningfully to the advancement of society
D) obtain a middle-class lifestyle in whatever country they live in
Answer: A
Difficulty: Easy
7) Why was there essentially no sustained growth before modern times?

A) Because frequent world wars made it impossible for growth to take hold
B) Because government policies prevented growth from taking place
C) Because there was no widespread public education
D) Because the pace of technological change was very slow
Answer: D
Difficulty: Easy
8) Fertility refers to ________.

A) the average period that an individual may be expected to live
B) the ability of an individual to read or write in at least one language
C) the ratio of deaths in an area to the population of the area
D) the number of children per adult or per woman of childbearing age
Answer: D
Difficulty: Easy
Topic: Malthusian Limits to Growth
34
9) Which of the following statements is true of Malthus's theory?
A) Malthus suggested that income levels will grow exponentially in the long run.
B) Malthus suggested that income levels will remain close to the subsistence level in the long run.
C) Malthus suggested that the fertility of the population will remain constant over time.
D) Malthus suggested that the life expectancy of the population will remain constant over time.
Answer: B
Difficulty: Easy
10) According to Malthus, when the standard of living in any economy is above subsistence, ________.
A) couples tend to have more children
B) couples tend to have fewer children
C) consumption is more than saving
D) saving is more than consumption
Answer: A
Difficulty: Easy
11) For a given level of GDP, a decrease in the size of the population will cause ________.
A) life expectancy to increase
B) life expectancy to decrease
C) GDP per capita to increase
D) GDP per capita to decrease
Answer: C
Difficulty: Easy
12) Which of the following correctly identifies a Malthusian cycle?

A) An increase in GDP will increase GDP per capita above subsistence, which will cause a decrease in the
size of the population, which will reduce pressure on resources and further increase GDP per capita.
B) An increase in GDP will increase GDP per capita above subsistence, which will cause an increase in the
size of the population, which will increase pressure on resources and that will further increase GDP per
capita.
C) An increase in GDP will increase GDP per capita above subsistence, which will cause an increase in
the size of the population, which will increase pressure on resources and eventually reduce GDP per
capita.
D) A decrease in GDP will decrease GDP per capita below subsistence, which will cause an increase in
the size of the population, which will increase pressure on resources and eventually reduce GDP per
capita.
Answer: C
Difficulty: Medium
35
13) Rapid population growth in Malthus's theory is constrained through ________.
A) higher fertility and mortality
B) reduced fertility and mortality
C) higher fertility and reduced mortality
D) reduced fertility and higher mortality
Answer: D
Difficulty: Medium
14) The term "demographic transition" refers to the ________ in fertility and number of children per
family that many societies undergo as they transition ________.
A) increase; from industry to agriculture
B) increase; from agriculture to industry
C) decrease; from agriculture to industry
D) decrease; from industry to agriculture
Answer: C
Difficulty: Easy
15) Which of the following statements identifies a correct reason for demographic transition?
A) The dependence on child labor is negligible in urban families compared to rural families.
B) The increase in the migration of labor from urban to rural areas reduces fertility.
C) The cost of rearing children is lower for urban families compared to rural families.
D) The transition from a rural economy to an urban economy reduces income below the subsistence level,
reducing fertility and the size of families.
Answer: A
Difficulty: Medium

A) After the demographic transition in the nineteenth century, there were recurrent Malthusian cycles.
B) Until the demographic transition in the nineteenth century, there were recurrent Malthusian cycles.
C) The demographic transition of the nineteenth century led to an increase in fertility across the Western
world.
D) The demographic transition of the nineteenth century led to a decrease in life expectancy across the
Western world.
Answer: B
Difficulty: Medium
36
17) Define subsistence level. What happens if the income in an economy exceeds the subsistence level
according to the Malthusian cycle?
Answer: The subsistence level is the minimum level of income per person that is generally necessary for
the individual to obtain enough calories, clothing, and shelter to survive. If the income in an economy
exceeds the subsistence level, the fertility in the economy increases, which in turn increases the size of the
population of the economy.
Difficulty: Medium
18) Describe the Malthusian Cycle.

Answer: The Malthusian cycle refers to the pre-industrial pattern in which increases in aggregate
income lead to an expanding population, which in turn reduces income per capita and puts a downward
pressure on population. The cycle starts with an increase in GDP above the subsistence level, which in
turn fuels population growth, increasing the pressure on existing resources and reducing GDP per capita.
Difficulty: Medium
19) What is meant by the term demographic transition? How is it responsible for modern growth?
Answer: Demographic transition refers to the decline in fertility and number of children per family that
many societies undergo as they transition from agriculture to industry. Demographic transition is a
central ingredient to modern growth, because it enabled the economies that experienced reduced fertility
to break away from the Malthusian cycle of sustained low GDP per capita.
Difficulty: Medium
20) As societies moved from rural living to living in cities, human fertility decreased. Why?
A) The polluted environments of cities made it harder to raise children to maturity.
B) Children were more expensive to raise in cities, and child labor was less beneficial.
C) In cities, there was too little food to ensure that children would survive to adulthood.
D) Children working in the newly invented factories of the Industrial Revolution tended to have shorter
lifespans.
Answer: B
Difficulty: Medium
21) Which statement about the Malthusian model is correct?

A) The Malthusian model applies today only in third-world nations.
B) The Malthusian model was a good representation of the world before 1800.
C) The Malthusian model applies today only in developed nations.
D) The Malthusian model was a poor representation of the world before 1800.
Answer: B
Difficulty: Easy
37
Scenario: In the fictional nation of Gallifrey, the subsistence level of income is $1,000 per year. Currently 3
million people live in Gallifrey, and GDP in Gallifrey is $2 billion.
22) Refer to the scenario above. What does the Malthusian model suggest will happen in Gallifrey?
A) The subsistence level of income in Gallifrey will rise.
B) The subsistence level of income in Gallifrey will fall.
C) The population in Gallifrey will rise.
D) The population in Gallifrey will fall.
Answer: D
Difficulty: Medium
23) Refer to the scenario above. How does the average level of income in Gallifrey compare to the
subsistence level?
A) Citizens of Gallifrey currently have incomes above subsistence, on average.
B) Citizens of Gallifrey currently have incomes equal to subsistence, on average.
C) Citizens of Gallifrey currently have incomes below subsistence, on average.
D) It is impossible to answer this question without additional information.
Answer: C
Difficulty: Easy
24) Which of the following identifies the correct reasons for sustained growth in the Western world after
the nineteenth century?
A) Demographic transition and the American Civil War
B) Demographic transition and the Industrial Revolution
C) The agricultural revolution and the Industrial Revolution
D) The American Civil War and the Industrial Revolution
Answer: B
Difficulty: Easy
Topic: The Industrial Revolution
25) Around the end of the eighteenth century in Britain, innovations in production resulted in greatly
increased output. This period is known as the ________.
A) Malthusian cycle
B) Scottish Enlightenment
C) demographic transition
D) Industrial Revolution
Answer: D
Difficulty: Easy
38
26) The ________ can be described as the arrival of new machines and methods of production in Britain,
starting in textile manufacturing and thereafter spreading into other sectors.
A) Colonial Period
B) Industrial Revolution
C) Urban Migration
D) Great Importation
Answer: B
Difficulty: Easy
27) Which of the following events opened the way for the rapid and steady technological changes that
underpinned modern economic growth?
A) The American Civil War
B) The Industrial Revolution
C) The agricultural revolution
D) Demographic transition in the Western world
Answer: B
Difficulty: Easy
28) Which of the following statements is true of the Industrial Revolution?

A) It was a gradual process.
B) It was a period of rapid disruption.
C) It started in the United States.
D) It started in the capital goods industry.
Answer: A
Difficulty: Easy
29) What is the Industrial Revolution? How did it contribute to modern economic growth?
Answer: The term "Industrial Revolution" is used to describe the series of innovation and their
implementation in the production process that began at the end of the eighteenth century in Britain. The
Revolution contributed to modern economic growth by opening the way for more steady and rapid
technological changes. It started a wave of industrialization that spread to many other countries around
the world.
Difficulty: Medium
39
30) Which group of industries were first affected by the Industrial Revolution?
A) Farming and fisheries
B) Mining and forestry
C) Manufacturing
D) Banking and financial services
Answer: C
Difficulty: Easy
31) Approximately how long ago did the Industrial Revolution occur?
A) 100 years ago
B) 200 years ago
C) 300 years ago
D) 400 years ago
Answer: B
Difficulty: Easy
32) Approximately when did the Industrial Revolution begin?

A) The end of the sixteenth century
B) The end of the seventeenth century
C) The end of the eighteenth century
D) The end of the nineteenth century
Answer: C
Difficulty: Easy
33) Activities that firms, universities, and governments undertake to increase their knowledge base are
referred to as ________.
A) primary activities
B) secondary activities
C) tertiary activities
D) research and development
Answer: D
Difficulty: Easy
Topic: Growth and Technology Since the Industrial Revolution
40
A) Countries with lower investment in research and development are likely to have higher standards of
living.
B) Countries with higher investment in research and development are likely to have higher standards of
living.
C) The Industrial Revolution started in the United States and spread to other parts of the world.
D) The Industrial Revolution started in South America and spread to other parts of the world.
Answer: B
Difficulty: Easy
35) In the United States, ________ percent of its GDP is spent on R&D every year.
A) 55.2
B) 2.79
C) less than 0.5
D) 14.3
Answer: B
Difficulty: Medium
7.4 Growth, Inequality, and Poverty
1) Which of the following statements is true of inequality in the U.S. economy?

A) Inequality had increased throughout the twentieth century.
B) Inequality had decreased throughout the twentieth century.
C) Inequality is now lower than what it was in 1950.
D) Inequality is now higher than what it was in 1950.
Answer: D
Difficulty: Easy
Topic: Letting the Data Speak: Income Inequality in the United States
2) The World Bank measure of absolute poverty, equivalent to about ________ per day, is a condition that
leads to serious economic, health, and social problems.
A) $5.85
B) $0.15
C) $6.20
D) $1.90
Answer: D
Difficulty: Easy
41
3) Income inequality in the United States was not constant throughout the twentieth century. When was it
lowest?
A) From the 1940s to the 1970s
B) In the 1920s and 1930s
C) From the 1980s onward
D) From the 1900s to the 1930s
Answer: A
Difficulty: Easy
4) By the end of the twentieth century, the share of U.S. income received by the top 10 percent of earners
was about ________.
A) 90 percent
B) 50 percent
C) 30 percent
D) 25 percent
Answer: B
Difficulty: Easy
5) Over the past 30 years, what has happened to the fraction of U.S. income received by the top 10 percent
of income earners?
A) It has increased.
B) It has decreased.
C) It has remained essentially constant.
D) It decreased, then returned to its original level.
Answer: A
Difficulty: Easy
6) The top 10 percent of income earners in the United States receive a large fraction of U.S. aggregate
income. How does this fraction compare today with the time of the Great Depression?
A) It is much greater today.
B) It is much smaller today.
C) It is about the same today as during the Great Depression.
D) Nobody knows, because records from the Great Depression do not exist.
Answer: C
Difficulty: Medium
42
A) The GDP per capita in most of the Western world has almost been constant since the beginning of the
twentieth century.
B) The GDP per capita of a nation at a particular point of time is not the same as the income of all
individuals in that nation.
C) GDP per capita is a useful tool to study the disparities in the standards of living in a country.
D) GDP per capita decreases with a decrease in population and increases with an increase in population,
GDP remaining unchanged.
Answer: B
Difficulty: Medium
Topic: Growth and Inequality
8) Which of the following is a problem associated with extreme levels of poverty?

A) High literacy
B) Low fertility
C) High life expectancy
D) High infant mortality
Answer: D
Difficulty: Medium
9) Suppose we know that a nation has experienced sustained growth. What does this mean about the
standard of living for the poorest members of that nation?
A) Their standard of living must have risen.
B) Their standard of living must have at least stayed constant.
C) Their standard of living must have fallen.
D) None of the above statements are correct.
Answer: D
Difficulty: Medium
10) Consider two countries. In the first country, there are 1,000 individuals; among them, 500 earn $20,000
per month and the remaining 500 earn $400 per month. In the second country, there are 1,000 people;
among them, 500 earn $12,000 per month and the remaining 500 people earn $600 per month. Which of
the two countries has more inequality and which country is the poorer of the two?
Answer: The per capita income in the first country is equal to (500 × 20,000 + 500 × 400)/1,000 = $10,200.
The per capita income in the second country is equal to (500 × 12,000 + 500 × 600)/1,000 = $6,300. From the
per capita income figures, we can conclude that the second country is poorer than the first country. The
ratio of rich-to-poor incomes in the first country is 10,000,000/20,000 = 50. The same ratio in the second
country is 6,000,000/30,000 = 20. Therefore the ratio of rich-to-poor incomes is much higher in the first
country. Thus, inequality is greater in the first country.
Difficulty: Medium
Topic: Choice and Consequence: Inequality versus Poverty
43
11) In which of the following countries would an economist describe income inequality as being greatest?
A) Half of the country's citizens earn $50,000 per year, and half earn $10,000 per year.
B) Half of the country's citizens earn $30,000 per year, and half earn $3,000 per year.
C) Half of the country's citizens earn $10,000 per year, and half earn $3,000 per year.
D) Half of the country's citizens earn $100,000 per year, and half earn $50,000 per year.
Answer: B
Difficulty: Medium
Topic: Choice and Consequence: Inequality versus Poverty
12) On an average, growth in per capita income is associated with a ________.

A) fall in poverty
B) rise in poverty
C) fall in inequality
D) rise in inequality
Answer: A
Difficulty: Easy
Topic: Growth and Poverty

A) Economic growth is the direct cause of declining poverty.
B) Economic growth is the direct cause of declining inequality.
C) Growth in unemployment is the direct cause of declining poverty.
D) There are some countries for which growth and poverty have both increased.
Answer: D
Difficulty: Easy

A) Economic growth always reduces poverty.
B) Economic growth always reduces inequality.
C) Economic growth is ineffective in reducing both poverty and inequality.
D) Economic growth can reduce poverty only if it is not associated with a significant rise in inequality.
Answer: D
Difficulty: Medium
15) Suppose we graphed the change in the poverty rate against the average growth rate of GDP per capita
for each of the 50 U.S. states over the past century. What would we expect to find?
A) A strong positive relationship
B) A weak positive relationship
C) A weak negative relationship
D) A strong negative relationship
Answer: C
Difficulty: Hard
44
16) Country A has experienced a greater average growth rate in GDP per capita than has Country B.
Based only on this, what would you predict about how the poverty rates changed in the two countries?
A) More than likely, the poverty rate in Country A has decreased faster than that of Country B.
B) Perhaps the poverty rate in Country A has decreased faster than that of Country B.
C) More than likely, the poverty rate in Country B has decreased faster than that of Country A.
D) Perhaps the poverty rate in Country B has decreased faster than that of Country A.
Answer: B
Difficulty: Hard
17) Over the past couple of decades, which have been the most common directions of change in the
poverty rate and GDP per capita across the world's nations?
A) Most nations have increased their poverty rate and their GDP per capita.
B) Most nations have decreased their poverty rate and their GDP per capita.
C) Most nations have increased their poverty rate and decreased their GDP per capita.
D) Most nations have decreased their poverty rate and increased their GDP per capita.
Answer: D
Difficulty: Medium
18) Over the past couple of decades, Brazil has (1) decreased its poverty rate, and (2) experienced positive
growth in GDP per capita. How does this compare to the majority of nations over this time period?
A) Both (1) and (2) are typical of the majority of nations over this period.
B) Neither (1) nor (2) are typical of the majority of nations over this period.
C) Only (1) is typical of the majority of nations over this period.
D) Only (2) is typical of the majority of nations over this period.
Answer: A
Difficulty: Medium
19) The second half of the twentieth century has seen substantial increases in international trade. What
effect has this had on worldwide poverty?
A) Poverty has decreased in most nations, at similar rates.
B) Poverty has increased in most nations at similar rates.
C) Poverty has decreased in most nations, particularly the poorer ones.
D) Poverty has decreased in most nations, particularly the richer ones.
Answer: C
Difficulty: Medium
Topic: How Can We Reduce Poverty?
45
20) Widespread mobile phone use has helped to reduce poverty in many poor nations. What is the best
explanation for this?
A) People are now able to call for help more easily when they are victims of crime.
B) People can access markets and services that they had no access to previously.
C) People can write apps for phones and sell them, allowing them to earn their way out of poverty.
D) People have more access to knowledge, allowing them to gain information and education like never
before.
Answer: B
Difficulty: Medium
21) Improvements in knowledge and technology in rich nations (such as the United States, Japan, and
Germany) have helped reduce poverty. Which nations' people have benefited from this?
A) Mostly the rich nations
B) Mostly the poor nations
C) Both rich and poor nations
D) Neither rich nor poor nations
Answer: C
Difficulty: Easy
22) Clara says that international trade can reduce poverty in developing nations by opening up new
markets for them to trade in. Bella says that international trade can reduce poverty in developing nations
by allowing the transfer of technology to those nations. Who is correct?
A) Clara
B) Bella
C) Neither Clara nor Bella
D) Both Clara and Bella
Answer: D
Difficulty: Easy
23) ________ imposed by wealthy nations is one way to increase gains in international trade for poorer
nations.
A) Increasing environmental standards
B) Increasing labor standards
C) Reducing tariffs
D) Increasing tariffs
Answer: C
Difficulty: Easy
46
24) Cross-country interactions produced by international trade can facilitate the transfer of ________.
A) exponential growth
B) income inequality
C) poverty
D) technology
Answer: D
Difficulty: Easy
25) How can technology developed in a wealthy country be used to increase the standard of living in
poorer countries?
Answer: As in the example of the wireline telephone industry, innovations developed in one country
can supplant dominant technologies in poorer countries that are maintained by state control or private
monopoly. In replacing more expensive technologies, productivity is increased at a lower cost, raising the
standard of living.
Difficulty: Medium
Appendix: The Solow Growth Model
1) The Solow growth model is a tool that is used for studying ________.
A) how net exports are determined
B) how aggregate demand is determined
C) how aggregate supply is determined
D) how aggregate income is determined
Answer: D
Difficulty: Medium
Topic: The Solow Growth Model
2) The aggregate production function used in the Solow model expresses GDP as a function of ________.
A) physical capital and level of technology only
B) physical capital and total efficiency units of labor only
C) level of technology and total efficiency units of labor only
D) physical capital, level of technology, and total efficiency units of labor
Answer: D
Difficulty: Medium
Topic: The Three Building Blocks of the Solow Model
47
3) ________ refers to the "wear and tear" that an equipment or structure goes through, eventually making
it obsolete.
A) Depreciation
B) Capital tear
C) Creative destruction
D) Intertemporal loss
Answer: A
Difficulty: Easy
4) Which of the following equations captures the aggregate physical capital stock of an economy in the
current year, Kcurrent year?
A) Kcurrent year = (1 + Depreciation rate) × Klast year + I
B) Kcurrent year = (1 − Depreciation rate) × Klast year + I
C) Kcurrent year = (1 − Depreciation rate) × Klast year × I
D) Kcurrent year = (1 − Depreciation rate) × Klast year − I
Answer: B
Difficulty: Medium
Scenario: The depreciation rate of physical capital in an economy is 10 percent. The investment on
physical capital in the current year is $500.
5) Refer to the scenario above. What is the current value of the physical capital stock in the economy if the
physical capital stock in the last year was worth $600?
A) $900
B) $1,000
C) $1,040
D) $1,200
Answer: C
Difficulty: Medium
6) Refer to the scenario above. What is the current value of the physical capital stock in the economy if the
physical capital stock in the last year was $1,000?
A) $1,200
B) $1,400
C) $1,600
D) $1,800
Answer: B
Difficulty: Medium
48
A) The amount of physical capital accumulation increases with a decrease in the depreciation rate of
capital.
B) The amount of physical capital accumulation increases with an increase in the depreciation rate of
capital.
C) The depreciation rate of physical capital increases with an increase in the investment in capital.
D) The depreciation rate of physical capital increases with a decrease in the investment in capital.
Answer: A
Difficulty: Medium

A) Physical capital accumulation will be high in the current year if the physical capital stock of the
previous year was high.
B) Physical capital accumulation will be high if the physical capital stock of the previous year was low.
C) The rate of depreciation will be low in the current year if the investment on physical capital the
previous year was high.
D) The rate of depreciation will be high in the current year if the investment on physical capital the
previous year was low.
Answer: A
Difficulty: Medium
9) If s denotes the saving rate, I denotes aggregate investment, and Y denotes GDP, then which of the
following equations is correct?
A) Y = s × I
B) I = s × Y
C) I = s/Y
D) I = Y/s
Answer: B
Difficulty: Easy
10) If the saving rate in an economy is 30 percent and the GDP of the economy is $1,000, then the level of
investment in the economy will be ________.
A) $150
B) $300
C) $330
D) $600
Answer: B
Difficulty: Easy
49
11) If the saving rate in an economy is 30 percent and the level of investment in the economy is $400, the
GDP of the economy must be ________.
A) $1,111.22
B) $1,333.33
C) $1,750.50
D) $1,900.25
Answer: B
Difficulty: Medium
12) If the level of investment in an economy is $4,000 and the GDP of the economy is $10,000, the saving
rate in the economy must be ________.
A) 20 percent
B) 30 percent
C) 40 percent
D) 44 percent
Answer: C
Difficulty: Medium
13) What are the factors that affect GDP according to the aggregate production function used by Solow?
Answer: The aggregate production function used by Solow expresses GDP as a function of three factors
of production:
i) physical capital
ii) total efficiency units of labor
iii) level of technology
Difficulty: Easy
14) What is the physical capital accumulation equation used by Solow?

Answer: According to Solow, the physical capital in the current year (Kcurrent year) is equal to the
physical capital of last year (Klast year) less the depreciated physical capital (Kdepreciated) plus the level
of investment (I). This implies:
Kcurrent year = Klast year − Kdepreciated + I,
or Kcurrent year = Klast year − (Depreciation rate × Klast year) + I,
or Kcurrent year = (1 − Depreciation rate) × Klast year + I
Difficulty: Medium
50
15) A steady-state equilibrium refers to an equilibrium in which ________ remains constant over time.
A) the GDP per capita
B) the stock of physical capital
C) inequality
D) the poverty rate
Answer: B
Difficulty: Easy
Topic: Steady-State Equilibrium in the Solow Model
16) If d is the depreciation rate and K is the physical capital stock, the amount of investment required to
keep the economy in a steady state is given by ________.
A) I = d/K
B) I = d + K
C) I = d − K
D) I = d × K
Answer: D
Difficulty: Easy
17) If the depreciation rate in an economy is 10 percent and the physical capital stock in the economy is
$1,000, the level of investment required to keep the economy at a steady state is equal to ________.
A) $100
B) $110
C) $250
D) $1,000
Answer: A
Difficulty: Easy
18) For the physical capital stock of an economy to remain constant over time, the amount of investment
must ________.
A) exceed the depreciated value of the physical capital stock
B) be less than the depreciated value of the physical capital stock
C) be equal to the depreciated value of the physical capital stock
D) be equal to the depreciated value of the physical capital stock times the saving rate of the economy
Answer: C
Difficulty: Easy
51
19) What will happen to the steady-state equilibrium level of output and physical capital stock in an
economy if
a) there is an increase in the saving rate
b) there is a deterioration of human capital
Answer:
a) If there is an increase in the saving rate in an economy, it will have a steady-state equilibrium with a
higher level of capital stock and income than the initial steady-state equilibrium level.
b) If there is deterioration of human capital in an economy, it will have a steady-state equilibrium with a
lower level of physical capital stock and income than the initial steady-state equilibrium level.
Difficulty: Medium
Scenario: Kenya's economy is in steady-state equilibrium. It has capital stock valued at $48 billion and
GDP valued at $60 billion.
20) Refer to the scenario above. If the saving rate in Kenya is 10 percent, what must be the depreciation
rate in Kenya?
A) 8 percent
B) 10 percent
C) 12.5 percent
D) 15 percent
Answer: C
Difficulty: Medium
21) Refer to the scenario above. If the depreciation rate in Kenya is 10 percent, what must be the saving
rate in Kenya?
A) 8 percent
B) 10 percent
C) 12.5 percent
D) 15 percent
Answer: A
Difficulty: Medium
22) Refer to the scenario above. If the saving rate in Kenya is 10 percent, what is the value of aggregate
investment in Kenya?
A) $1.2 billion
B) $4.8 billion
C) $6 billion
D) $10.8 billion
Answer: C
Difficulty: Easy
52
23) If a country increases its saving rate, the steady-state equilibrium level of ________.
A) GDP will increase
B) physical capital stock will decrease
C) investment will decrease
D) efficiency units of labor will increase
Answer: A
Difficulty: Medium
Topic: Determinants of GDP
Scenario: Consider two countries: Country A and Country B. Both countries have the identical aggregate
production functions, populations, and efficiency units of labor, but they have different saving rates. The
saving rate is higher in Country A than in Country B.
24) Refer to the scenario above. If both economies have identical depreciation rates, then Country A's
steady-state equilibrium will ________ Country B's steady-state equilibrium.
A) lie to the right and below
B) lie to the right and above
C) lie to the left and above
D) lie to the left and below
Answer: B
Difficulty: Medium
25) Refer to the scenario above. If both economies have the same depreciation rate, then which of the
following statements will be true?
A) Country A will have a greater physical capital stock and a lower GDP than Country B.
B) Country A will have a greater physical capital stock and a higher GDP than Country B.
C) Country A will have a lower physical capital stock and a higher GDP than Country B.
D) Country A will have a lower physical capital stock and GDP than Country B.
Answer: B
Difficulty: Medium
26) If the investment on physical capital stock in an economy during a year is $40,000, the existing capital
stock in the economy is $80,000, and the depreciation rate of capital during the year is 10 percent, the
physical capital accumulated during the year is ________.
A) $40,000
B) $112,000
C) $124,000
D) $184,000
Answer: B
Difficulty: Medium
53
The following figure shows the production function and the relationship between investment and
physical capital stock for a given saving rate.
27) Refer to the figure above. If the physical capital stock is fixed at $300, the GDP in this economy is
________.
A) $4,000
B) $5,000
C) $6,000
D) $7,000
Answer: C
Difficulty: Medium
28) Refer to the figure above. If the physical capital stock is fixed at $300, the aggregate investment in this
economy will equal ________.
A) $4,000
B) $5,000
C) $6,000
D) $7,000
Answer: A
Difficulty: Medium
29) Refer to the figure above. If the physical capital stock is fixed at $300, the total consumption in this
economy will equal ________.
A) $2,000
B) $3,000
C) $4,000
D) $5,000
Answer: A
Difficulty: Medium
54
30) If a country's human capital improves, the country will have ________ for a given level of physical
capital stock.
A) a higher GDP
B) a lower GDP
C) more poverty
D) more inequality
Answer: A
Difficulty: Medium
Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate
production functions, populations, and efficiency units of labor, but they have different technologies. The
technology used in Country B is more advanced than that used in Country A.
31) Refer to the scenario above. Which of the following statements will be true?
A) Country A's steady-state equilibrium will lie to the right and below that of Country B.
B) Country A's steady-state equilibrium will lie to the right and above that of Country B.
C) Country A's steady-state equilibrium will lie to the left and above that of Country B.
D) Country A's steady-state equilibrium will lie to the left and below that of Country B.
Answer: D
Difficulty: Medium
32) Refer to the scenario above. Which of the following statements will be true in steady state?
A) Country A will have greater physical capital stock and lower GDP than Country B.
B) Country A will have greater physical capital stock and GDP than Country B.
C) Country A will have lower physical capital stock and higher GDP than Country B.
D) Country A will have lower physical capital stock and GDP than Country B.
Answer: D
Difficulty: Medium
33) Refer to the scenario above. If the size of the population is the same in both countries, at the steady-
state equilibrium, ________.
A) the physical capital stock will be the same in both countries
B) the GDP per capita will be the same in both countries
C) the GDP per capita of Country A will be higher than that of Country B
D) the GDP per capita of Country B will be higher than that of Country A
Answer: D
Difficulty: Hard
55
Scenario: Two countries (A and B) have the same aggregate production function, the same level of
technology, the same depreciation rate, and the same level of human capital. However, the saving rate is
higher in country A than in country B.
34) Refer to the scenario above. In the short run, which country must have the higher GDP?
A) Country A's GDP must be higher than Country B's GDP.
B) Country B's GDP must be higher than Country A's GDP.
C) The two countries' GDPs must be equal.
D) There is no way to determine which country's GDP must be higher from the information given.
Answer: D
Difficulty: Medium
35) Refer to the scenario above. In steady-state equilibrium, which country must have the higher GDP?
A) Country A's GDP must be higher than Country B's GDP.
B) Country B's GDP must be higher than Country A's GDP.
C) The two countries' GDPs must be equal.
D) There is no way to determine which country's GDP must be higher from the information given.
Answer: A
Difficulty: Medium
36) A ________ traces out the behavior of the economy over time.
A) comparative equilibrium
B) steady-state equilibrium
C) dynamic equilibrium
D) static equilibrium
Answer: C
Difficulty: Medium
Topic: Dynamic Equilibrium in the Solow Model
37) Which of the following is most likely if there is a war that destroys a country's stock of physical
capital to a level below the steady-state equilibrium?
A) The GDP of this country will be equal to the steady-state equilibrium level of GDP.
B) The GDP of this country will be higher than the steady-state equilibrium level of GDP.
C) The investment in physical capital will offset the depreciating physical capital.
D) The investment in physical capital will be lower than the amount required to replenish the
depreciating physical capital.
Answer: D
Difficulty: Medium
56
38) Movements away from equilibrium in the Solow model ________.
A) are automatically corrected
B) persist and cannot be corrected
C) are corrected only through government intervention
D) are corrected only when the country opens up to international trade
Answer: A
Difficulty: Easy
39) World War II resulted in the destruction of much of the United Kingdom's physical capital stock.
Assuming the country was in steady-state equilibrium before the war and nothing else changed, what
does the Solow Model predict about the years following World War II in the United Kingdom?
A) A new steady-state equilibrium would emerge, with the current level of physical capital.
B) A new steady-state equilibrium would emerge, with a level of physical capital between the current
level and the pre-war level.
C) The economy would never again reach a steady-state equilibrium.
D) The economy would eventually return to the old steady-state equilibrium, with the original level of
physical capital.
Answer: D
Difficulty: Hard
40) Which statement best describes the role of the saving rate in the Solow Model?
A) An increase in the saving rate results in higher steady-state GDP and faster sustained growth.
B) An increase in the saving rate results in higher steady-state GDP but not faster sustained growth.
C) An increase in the saving rate results in lower steady-state GDP but faster sustained growth.
D) An increase in the saving rate results in higher steady-state GDP but lower sustained growth.
Answer: B
Difficulty: Medium
Topic: Sources of Growth in the Solow Model
41) According to the Solow model, given the levels of total efficiency units of labor and technology,
________.
A) increases in the saving rate is the sole reason for sustained economic growth
B) increases in the rate of physical capital accumulation can be the sole reason for sustained economic
growth
C) there is a maximum fixed level of GDP that an economy can achieve by increasing saving
D) the physical capital stock does not play any role in the determination of the steady-state equilibrium
level of GDP
Answer: C
Difficulty: Medium
57
42) According to the Solow model, which of the following factors can lead to the sustained growth of a
nation?
A) An increase in the saving rate
B) An increase in physical capital stock
C) An improvement in the quality of human capital
D) An improvement in technology
Answer: D
Difficulty: Easy
43) The implication of the Solow model is that economic growth is sustainable when ________.
A) the ratio of physical capital stock to GDP remains constant as the economy grows over time
B) the ratio of physical capital stock to GDP decreases as the economy grows over time
C) the ratio of saving rate to depreciation rate remains constant as the economy grows over time
D) the ratio of saving rate to depreciation rate increases as the economy grows over time
Answer: A
Difficulty: Easy
44) If a country is growing at an annual rate of 5 percent, what will be its GDP after 5 years?
A) 1.8 times the current GDP
B) 1.28 times the current GDP
C) 3.21 times the current GDP
D) 5 times the current GDP
Answer: B
Difficulty: Medium
Topic: Calculating Average (Compound) Growth Rates
45) Which of the following is a limitation of using arithmetic averages to calculate growth rates?
A) Arithmetic averages are difficult to calculate.
B) Arithmetic averages cannot be used when growth is negative.
C) Arithmetic averages do not capture the exponential nature of growth and thus are not suitable for
long-run predictions.
D) The calculation of growth using arithmetic averages requires more data than other methods require.
Answer: C
Difficulty: Medium
58
A) Using either the arithmetic or geometric average to compute average growth rates gives similar
answers for long periods.
B) When the arithmetic average is used to calculate the growth rate, the exponential nature of growth is
taken into consideration.
C) When the geometric average is used to calculate the growth rate, the exponential nature of growth is
not taken into consideration.
D) Using either the arithmetic or geometric average to compute average growth rates gives similar
answers for short periods.
Answer: D
Difficulty: Medium
47) GDP per capita in New Zealand grew from $15,000 to $25,000 over 10 years. What formula should
you use to find New Zealand's average growth rate (g) over these 10 years?
A) g = (25,000 - 15,000)/10
B) 15,000 × (1 + g)10 = 25,000
C) 25,000 × (1 + g)10 = 15,000
D) g10 = (25,000 - 15,000)
Answer: B
Difficulty: Medium
48) GDP per capita in Fiji grew from $5,000 to $13,000 over 20 years. Its average growth rate over this
time is closest to ________.
A) 2 percent
B) 3 percent
C) 4 percent
D) 5 percent
Answer: D
Difficulty: Hard
Scenario: In 2000, world GDP per capita was $5,500. In 2010, world GDP per capita was $9,500.
49) Refer to the scenario above. What formula would you use to calculate the world average annual
growth rate g?
A) g = (9,500 - 5,500)/10
B) g10 = (9,500 - 5,500)
C) 5,500 × (1 + g)10 = 9,500
D) 9,500 × (1 + g)10 = 5,500
Answer: C
Difficulty: Medium
59
50) Refer to the scenario above. What was the world average annual growth rate from 2000 to 2010?
A) 5.6 percent
B) 6.0 percent
C) 6.3 percent
D) 7.3 percent
Answer: A
Difficulty: Medium
60
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up in a close room, with well-curtained bed and warm bedclothes,
and was prohibited from relieving his thirst with any cold drink. Truly,
if Marcellus Sidetes, who is said to have written forty-two books in
“heroic” verse “concerning distempers,” had given us a picture of all
the misery which must have been occasioned in the world by the
really insolent disregard of Nature and common sense shown in
these matters,—how many thousands of lives have been thrown
away, and through what maddening misery the survivors must have
struggled back to life,—those poems, instead of being forgotten by
the world, might have done us precious service by reminding us that
there is some counterweight to be placed in the scale wherein we
are wont to measure our debts of gratitude to medical science.
Another appalling device was that of the renowned English
physician, John of Gaddesden, who introduced the practice of
treating the small-pox by wrapping up the patient in scarlet, hanging
his room in scarlet, and in fact compelling him to rest his feverish
eyes only on that flaring hue. John tried this notable device,
according to his own showing, on one of the sons of King Edward I.
(it does not appear to which he refers), and complacently adds to his
report, “et est bona cura.” In those days, however, doors and
windows were not made air-tight, and up the capacious chimneys a
considerable portion of fresh air must always have rushed. It was
reserved for a later generation to perfect the ingenious system for
aggravating and intensifying fever by pasting down the modern
window, closing the registers, and (as a climax) engaging nurses to
lie beside the sufferer to keep up the heat! The writer heard some
years ago from the lips of a Member of Parliament, now deceased,
the recital of his own treatment as a boy, in or near London, under a
severe attack of small-pox. His life being specially valuable as that of
an only son, his affectionate parents, by the advice of a distinguished
physician, obtained the services of two fat women, who were
established permanently in bed on each side of the child during the
whole course of the disease! What stipend was offered to tempt
these poor obese females to perform this awful service has escaped
from the record.
Reading over all these marvellous prescriptions, it is a refreshing
exercise to picture the fashionable “leech,” the Gull or Jenner of the
period, physician in ordinary to the King or Queen, suave and
solemn, filled to the brim with all the conscious dignity of Science,
standing beside the sick-bed of some mighty prince or peer, and
giving to the awe-stricken attendants his high commands to hang the
room with scarlet cloth, or to bring to the patient one of the horrid
messes prepared with such infinite pains under his direction, in his
own laboratory. We can almost hear him condescendingly explaining
to the chief persons present what occult relationship exists between
the small-pox and the scarlet cloth, or how the Arcanum of Toads
comes to be specially valuable, having been composed of the fattest
old toads, selected precisely at the right season,—videlicet
midsummer. Of course, in each successive generation there was
nothing for the unlearned laity to do but to bow submissively to the
dicta of the exponent of Science as it existed at the time. People
may always laugh at what is past and gone; but to suspect that living
men may be mistaken, or that new systems of medicine, philosophy,
or theology, may be destined, like the old, to “have their day and
cease to be,” is audacity to which no one should advance. We dare
not, therefore, suggest that, to our grandsons, half our modern
nostrums (of which the fashion comes in freshly one season and
usually falls into disrepute a few years after) may possibly appear
scarcely a degree less ridiculous than the Arcanum of Toads or the
Mummiall Quintessence. It was not much worse, after all, to make a
patient drink a dead man’s blood than to rob him of his own, in the
Sangrado style to which (in the memory of us all) the world owes the
loss of Cavour. It would have been a mercy to a poor Florentine lady,
lately deceased, had her physician counselled her merely to eat
earth-worms pickled in vinegar, or green lizards boiled alive in oil, as
recommended by Dr. Salmon, instead of bleeding her from the arm
nineteen times in the fortnight following her confinement and (as may
be readily understood) preceding her untimely death.
Sacrificial Medicine, however, in its simpler and more easily
recognizable forms, is undoubtedly on the wane, though a good deal
of its spirit may still be traced in our behavior to the sick. To
homœopathy (as to many another kind of heresy), we probably owe
somewhat of the mitigation of orthodoxy; and children, noticing the
busts of Hahnemann in the shop windows, may be properly taught to
bless that great deliverer who banished from the nursery those huge
and hateful mugs of misery,—black founts of so many infantine
tears,—mugs of sobs and sighs and gasps and struggles
unutterable, from one of which Madame Roland drew the first
inspiration of that martyr spirit which led her onward to the guillotine,
when she suffered herself to be whipped six times running, sooner
than swallow the abominable contents.
FOOTNOTES:
[26] As the modern mind may be a little puzzled as to the
mode in which some of these substances can be introduced
into our internal economy, the following extract from the
Family Dictionary of Dr. Salmon (1696) may throw light on the
subject: “Coral, to prepare,—Take such a quantity as ye
think convenient. Make it into a fine powder by grinding it
upon a Porphyry or an Iron Mortar. Drop on it by degrees a
little rosewater, and form it into balls for use. After this
manner, Crabs’-Eyes, Pearls, Oister shells, and Precious
stones are prepared to make up Cordials compounded of
them and other suitable materials for the strengthening of the
heart in fevers, or such like violent diseases, and to restore
the Decays of nature.” Ebony is swallowed by rasping it in
shavings and making a decoction.
THE FITNESS OF WOMEN FOR THE
MINISTRY OF RELIGION.
Among the anomalies of our social state may be counted the fact
that, while it is generally admitted that women are more religious
than men, it is to men that in our age and country the Ministry of
Religion is (with infinitesimal exceptions) exclusively committed.
While nine persons out of ten are conscious that their earliest
sentiments of piety have been derived from a mother, and that a
sister or a wife has alone enabled the troubled faith of their latter
years to survive the shocks of worldliness and doubt, there is yet not
one recognized channel by which these waters of life, stored in the
fountain of women’s hearts, can flow beyond the narrowest borders;
while, on the contrary, it is not too much to surmise that to a very
large number of clergymen, well-meaning, learned, and
conscientious, the sense of dryness of soul in all that concerns the
more spiritual part of their office is a perpetual self-reproach.
Habitans in Sicco writes every autumn in the newspapers to
complain he can obtain no refreshment from his weekly sermon at
any church in his neighborhood, while around him all the time are
private wells and underground rivers of the purest element of feeling
for which he thirsts. It is a case of
“Water, water, everywhere,
But not a drop to drink.”
What we want first and above all things in our ministers of religion
is that they should be intensely religious; and knowing this, and that
all other gifts and acquirements are comparatively of small avail for
the purpose, we deliberately exclude from the sacred office that
moiety of the community among whom this special and most
precious grace is, at all events, least rare.[27]
The reasons for this exclusion are, however, amply sufficient to
account, historically, for the anomaly. They are of two kinds, which I
shall take leave to characterize as the Bad and the Good. There is a
very deep-rooted prejudice, inherited from the ascetics of early
Christianity, whereby the idea of womanhood is connected with very
base associations. It is impossible to ignore this fact in any review of
the religious position of the sex; and it is therefore better to say
bluntly that, from this point of view, a woman is looked upon rather
as an emissary from the pit than a “daughter of the Lord Almighty,”
rather a temptation to earthly passion than a helpmate to heavenly
purity. Springing up when the old classical world had sunk into a
corruption and foulness which we can now probably little realize in
imagination, the frenzy of asceticism which was nourished among
the deserts of the Thebaid and attained its full growth in the
monasteries of Greece and Italy,—the origin of all the legends of
which the “Temptation of St. Anthony” is the type,[28]—has left
almost ineffaceable traces throughout the nations of Europe; of
course much more sharply marked in the Latin and Greek Churches,
which have canonized these poor fanatics, and still set apotheosized
virginity on one of the thrones of heaven, than among Protestant
communities, wherein marriage has been always placed on a moral
level with celibacy, and Martin Luther has been thoroughly absolved
for his conjugal affection for the singularly plain old lady whose
portrait by Lucas Cranach we beheld some years ago in the
Exhibition of Old Masters in Burlington House.[29] Nevertheless,
even among Protestant Christians, a certain impression has
remained, the reverse of the faith of their old Teuton forefathers, that
women were nearer to the mind of the Divinity than men. The
highest religious status a woman could attain in Milton’s opinion was
a sort of deputy piety,—
“He for God only, she for God in him”;
a type which, considering the kind of representatives of the Deity
which some of Adam’s descendants have proved to their wives, is
scarcely to be ranked as elevated. The paramount influence of St.
Paul’s mind in generating (as Rowland Williams expresses it) the
religious atmosphere which Protestants breathe, and the great
celibate Apostle’s semi-ascetic feelings about women, have
seemingly counteracted the hereditary predisposition of Saxondom
to reverence them. His treatment of Marriage (reproduced in the
exordium of the Solemnization of Holy Matrimony in the English
Book of Common Prayer, and apparently intended to show how
unholy are the sentiments assumed to form the usual basis of that
alliance) has certainly tended to preserve the prestige of Scriptural
dignity and authority for sentiments on such subjects derived from
Southern races and coarser times, and which might else have died
out ere now in Teutonized Europe. That, considering the hysterical
behavior of his male converts, when “every one hath a psalm, hath a
doctrine, hath a tongue, hath a revelation, hath an interpretation,”[30]
prudence justified St. Paul in prohibiting female locutions in public
worship may be fully conceded. But the unhappy petrifaction of his
current directions, whereby (like so many other Biblical utterances)
they have become laws for all time and every divergency of
circumstance, has been attended with lamentable consequences. No
Jewish law-giver ever bade the Miriams and Deborahs, the Esthers
and Judiths, of his race, “keep silence,” and hide their diminished
heads from regard, to “the angels,” or to anybody else in or out of
temple or camp; and the consequence has been (as a very
remarkable paper by a Jewish lady has pointed out)[31] that female
patriots, judges, and prophetesses have played a noble and
conspicuous part through the whole history of Judaism. But (not to
speak profanely) St. Paul has been supposed to act like Louis XIV.,
when he forbade that any more healing wonders should be done at
the tomb of the Abbé Paris:—
“De par le Roi—Défense a Dieu,
De faire miracle en ce lieu.”
If it were to please Providence to inspire a woman with any of the
gifts of the prophetic or ministerial offices, if ever the promise should
be fulfilled to the letter that “your sons and your daughters shall
prophesy,” and that the impulse to speak holy words were to seize
her in the most natural and appropriate place, to wit, in church, St.
Paul is quoted as authority to check any such irregular and
unsuitable proceeding: “I suffer not a woman to speak in church.”
The result has been that, except among the Quakers (who have
coolly set the prohibition aside, and seemingly profited not a little by
so doing), Christian rivals to the heroines of Judaism are not
producible. During these last eighteen centuries, among all the
millions of women in whose hearts the precepts of Christ have been
sown and borne rich fruit, there may well have been a few whose
eloquence and fervor of piety would have influenced the heart of
men as much as a St. Bernard or a Peter the Hermit, and whose
words, like those of a Tauler, a Fénelon, or an à Kempis, would have
remained a spiritual treasure for all time. But if such have lived and
felt and thought, and longed perhaps to speak to their fellow-men out
of the abundance of their hearts, their mouths have been effectually
stopped. Order has reigned in the Churches so far as they were
concerned, and whatever light they might perchance have borne into
the dark places of the earth, instead of being set on a candlestick,
has been carefully covered up under a bushel.
Such are, I venture to think, the bad reasons for the exclusion of
women from the ministry. Good ones, however, are certainly
forthcoming, if perchance, when weighed in the scale against the
arguments in favor of such an innovation, they prove less heavy.
They are drawn from circumstances, some of which pertain to the
order of nature, and can never be altered; while others might be, or
are already in process of change.
The functions of a minister of religion, as understood in modern
times (apart from priestly claims to administer sacraments by special
divine commission, with which we need not concern ourselves here),
are, roughly speaking, twofold: 1st, public prayer and preaching;
and, 2d, pastoral ministrations in the homes of the members of the
congregation. Regarding the first, women labor under several
disadvantages, sometimes amounting to disabilities. Though
women’s voices, when good, reach farther than those of men, a
considerable number are deficient in the physical vocal power
indispensable to make themselves heard in an assembly numbering
above one or two hundred persons. Nothing would be more pitiable
and ridiculous than for one of these ladies, whatever might be her
mental gifts, to mount a pulpit and, with feeble voice rising only to
crack in an occasional screech, to attempt to pour forth exhortations
which three-fourths of her audience could not hear, and under which
the remainder would writhe in an auditorial purgatory. Secondly,
there can be no question that the average female intellect is below
the average male intellect, and consequently that there are fewer
women than men up to the mark of intellectual competence, below
which preaching, however well intended, and even inspired by
genuine and true feeling, is apt rather to “give occasion to the enemy
to blaspheme” than to tend to edifying. If the foolish things of the
world often confound the wise, the foolish people in it provoke and
distract them; and, even to their humblest hearers, many such well-
meaning silly ones would be little else than the blind leading the blind
into a ditch. Lamentable as it would be to hear a shrill feminine
squeak delivering from the desk the majestic periods of Job and
Isaiah, it would be doubly deplorable to listen to a thin and only too
distinctly audible soprano enouncing alternately from the pulpit
platitudes, ineptitudes, and blunders, such as memory recalls only
too keenly to many of us as among the severest trials of the
domestic circle. A special peril in this matter also lies in the ill-
omened circumstance that the greater the folly of the woman, so
much greater, alas! is generally to be found her propensity to preach
in private, and therefore, it may presumably be dreaded, her
proclivity to extend to a larger sphere the benefit of her exhortations.
It has been the observation of the present writer, through a long
experience, that masculine and feminine folly usually differ in this
essential particular. A man fool dimly perceives he is a fool, and
holds his tongue accordingly; or (if the vanity of his sex prevent him
from arriving consciously at any such conviction or conclusion) he
deems that as prudence is the better part of valor, so is silence the
proper garb of wisdom, and that the less he wastes on an ungrateful
world the precious jewels of his ideas, the more credit shall he have
for those supposed to remain in the casket of his mind. A man who
talks much is nine times out of ten a clever and brilliant person, and
may possibly be the most profound of thinkers, who brings out of the
inexhaustible treasury of his imagination things new and old. A
woman fool, on the contrary, usually does not find out, till she is old
and ugly and the habit of silly chatter is irretrievably settled, that she
is a fool at all: probably for the simple reason that the more folly she
talks, the more delighted her male admirers generally show
themselves with her discourse. Even if she does not happen to think
herself particularly clever or well-informed, she has been taught to
believe that ability in a woman is rather a defect to be concealed
than a gift to be exhibited, and that, as the sagacious Chinese
proverb has it, “The glory of a man is knowledge, but the glory of a
woman is to renounce knowledge.” Accordingly, without the slightest
reticence or dread of exposure, she tumbles out of her untidy brain
notions as trivial and mesquin as the contents of her own disorderly
work-basket,—here a button and there a spangle, a thimble, a bit of
crochet, a string of beads, a tangled skein of silk, and a little ribbon
marked with inches wherewith to measure the universe. The result of
this difference in the display of folly is naturally to lend color to a
somewhat exaggerated estimate of that surplusage of feebleness
and frivolity in the feminine scale, of the existence of which, alas!
there can be no doubt, but which is perhaps less than is supposed
out of proportion with the correlative dulness and stupidity in the
masculine balance. As the immortal Mrs. Poyser sums up the matter,
“Women are fools. God Almighty made them so to match the men.”
Thus, then, two arguments at least against admitting women to the
ministry rest on natural and inevitable grounds: some women are
physically, some other women mentally, incapable of adequately
fulfilling its duties. And to these adverse reasons others are added
by the actual though not inevitable conditions of society. Women, up
to the present time, have been almost indefinitely less well educated
than men, and only their superior quickness and tact prevented this
inequality from telling disastrously in common life; while nothing
could hinder it from doing so, were they to undertake the office of
public teachers. By hook or crook, with little teaching (and that
teaching generally fourth or fifth rate of its kind), women have
managed pretty generally to scrape together and store up in their
memories in a happy-go-lucky way a certain quantity of knowledge,
useful and ornamental enough to pass muster. Women’s culture,
when women are cultivated, sometimes (perhaps we may say often)
possesses rather more breadth than that of men, and includes a
good many topics rarely included in the masculine curriculum. It is
therefore well suited to furnish pleasure to the possessor and
entertainment to her acquaintance and readers; but the accuracy
and definiteness of knowledge which men obtain, thanks to their
much abused classical and mathematical training, are what every
ordinarily educated woman with a grain of sense sighed for, till the
day when the great movement for the Higher Education of Women
reared a more fortunate generation. Now, it is clearly highly
desirable, if not absolutely indispensable, that a person who may be
called upon to treat publicly and didactically, if not controversially—
and let us hope and pray that women will not generally take to
controversy!—almost every subject in the range of the higher
interests of man, who at least ought not to regard any such interest
as foreign ground, should possess not merely wide, but accurate
information, and be as far as possible above the liability to commit
any gross blunders. This is of course viewing the subject apart from
any special theological training such as the older Churches have
deemed almost the first qualification for the ministerial office. Even
the poor Capuccini preaching friars, whose astounding ignorance of
profane history and science affords inexhaustible tales of merriment
in Italy, who talk of “the great St. Augustine of Hippo, who crowned
King Alfred, who signed Magna Charta,” and are wont to indulge in
such figures of rhetoric as imaginary sniffs round the pulpit at the
smell of the roasting flesh of St. Lawrence on his gridiron,—even
these poor old fellows have received adequate instruction in the
doctrines, the legends, and the moral and penitential systems of their
Church. Proverbially ignorant as are the Greek Popes and the
Nestorian, Coptic, and Maronite priests, they, too, are perfectly well
“up” in all those recondite dogmas which are supposed to be their
peculiar concern, and can tell with unerring certainty whether the
Second Divine Person had two natures or two wills, or only one of
each, or whether the Third positively proceeded from the First only,
according to Greek orthodoxy, or from the First and Second,
according to that of Rome and Canterbury. Nearer home, of course,
theological education is a wider and more serious matter. If young
priests at Maynooth are taught the astronomical system which
makes the sun go round the earth, and the moral system of Peter
Dens, which is nearly as completely the reverse of truth, they still
receive an enormous amount of something which goes by the name
of instruction, and in the matters of scholastic theology and casuistry
are probably qualified to beat a great many eminent D.D.’s of Oxford
and Cambridge. Here in England, and in Scotland also, every
Church, Established and Dissenting, has its college or colleges for
training its clergy, either apart from or together with students
intended for lay professions; and, without the degree or certificate
afforded by such institution, the entry into the ministry is barred.
Christendom, in short, has, like Judaism, its “Schools of the
Prophets”; and nobody is invited to prophesy, even if he be pious
and gifted as John Bunyan, who has not passed through them and
learned his lesson.
The necessity for this theological training, so far as it concerns the
insurance of orthodox doctrine from the acolyte when he becomes a
preacher, of course falls to the ground when we contemplate an
order of things quite outside the orthodox churches, and such as it is
not to be anticipated they will sanction for many a day. Our female
preacher is by the hypothesis, for the present at all events, either
quite irregularly connected with the orthodox sects, a Minister
Unattached or Amateur Pastor (and some such there are at this
moment doing a vast deal of good work, e.g., Miss Catherine Marsh
and the sister of Mr. Spurgeon); or if ever officially recognized, and a
professional minister, then as belonging to some heterodox
communion, such as the Salvation Army; or those in America, which
profit by the services of the Rev. Phœbe Hanaford, the Rev.
Antoinette Brown, and the late Rev. Celia Burleigh; and the Unitarian
congregation at Melbourne, which honored itself by choosing for
their pastor Martha Turner, a lady whose great abilities and noble
spiritual feeling seem to me to hold out the very example we seek of
what a woman in the pulpit may and ought to be.[32] No necessity
exists compelling a female preacher who enlists under the banner of
religious freedom to undergo the particular mental drill which
qualifies the Romanist or Anglo-Catholic clergyman for the
performance of all the peculiar intellectual labors and combats
necessary to his office, and included in the duty of honestly believing
exactly all which his Church believes, and being equipped to do
battle with anybody who believes anything less or anything more.
But is there on this account less reason that the candidate for
another kind of ministry should undertake less severe studies and go
through a less complete mental training than the embryo priest, Latin
or Anglican? The reverse has been most wisely maintained by the
Unitarian body in this country, whose scheme of theological culture
(if the present writer may presume to estimate it) is wider and deeper
than that which is demanded to qualify the possessor for the See of
Canterbury. The teacher of religion who is to be something more
than the expounder of a ready-prepared catechism,—who is to lead
his flock not merely into one particular paddock, and to water them
exclusively at one particular pond, but into every field of sweet and
wholesome herbage, and beside every stream of living waters,—
whose duty it will be to pluck up the cruel brambles, and clear away
the piles of stones of doubts and difficulties which grow and are flung
by careless hands along the path of faith and life,—such a teacher
ought to be furnished with every aid which learning can offer. Above
all, I should hold that a woman who should venture to assume this
high and arduous task specially needs such equipment, since, for a
long time to come, she must expect to be more than others the mark
of question and criticism; and the very eagerness of her own mind
may (unless weighted by solid erudition) carry her more quickly and
more remotely astray. Every one must have noticed how there are
some persons full of originality and mother-wit, who continually fancy
they are making fresh observations and theories, while their next
neighbor, who has never had an idea properly his own, can tell them
off on his fingers what ancient sage first made their observation, and
when and by whom in the Middle Ages their theory was broached,
and how it was refuted and abandoned by all thinking people several
centuries ago. The merely original man makes himself ridiculous for
want of learning, and is, in fact, always beginning de novo at the
bottom of the ladder of human thought. The mere scholar is nothing
better than a Conversations-Lexicon, and never exercises any
influence except that of a useful drag on the ideas of his friends
when they are going down-hill. The true teacher must indispensably
combine both the gift of originality and the acquirement of such
stores of knowledge as shall enable him to trace doctrines and
hypotheses to their sources,—to know what has been said for and
against them by the greater thinkers of the world who have dealt with
them,—and, in a word, to know exactly how far he is or is not a
heretic, and not be (as is the commonest of cases) a heinous heretic
while he believes himself strictly orthodox, and strictly orthodox and
even commonplace when he enunciates what he fondly conceives to
be a bold and startling heresy. All this applies (for reasons too
obvious to need animadversion) pre-eminently to teachers of the
more impulsive sex. Accordingly, we must admit that the argument
against female ministers of religion, founded on the lower
educational status of women at present, is, so far as it goes,
perfectly valid.
Lastly, there is an argument which I imagine would half-
consciously influence many serious-minded people against the
admission of women to such an office. Women are (thanks to all
sorts of causes, historical, political, personal, with which we need not
concern ourselves) actually much deconsidered by men. Would not
their deconsideration be reflected on Religion itself, were they to
become its authorized ministers? With enormous labor, the Broad
Church school has been trying to efface the stamp of effeminacy
from their order, to cultivate “muscular Christianity,” and make
laymen of the order of the author of Sword and Gown remember that
a priest is not necessarily an old woman. If many women, old or
young, enter the ministry, will not this effort to redeem the character
of the order be entirely thrown away, and the impression become
quite ineffaceable that Manliness and Godliness are two orbs always
seen in opposition, and never in conjunction? I confess I should feel
such a fear as this to form a very cogent argument, were it altogether
well founded.
Let us now, before attempting to discuss the possible advantages
to be set against all these objections to the religious ministry of
women, briefly run back over the heads we have passed, and see if
there be not some answer to each objection, or at least some hope
that its force might with time and care be neutralized.
First, there was noticed the ascetic feeling, inherited from the old
monks, of the essential unholiness of women, and their consequent
unworthiness to meddle with sacred things. This idea has probably
occurred for the first time to many an English lady when she has
penetrated by chance into some hallowed precinct, some tempting
and shadowy cloister, of a monastery in Italy or Syria, and has been
driven out tumultuously by a whole flock of cowled and sandalled
brethren, cackling like so many geese at the intrusion of a cat into a
hen-house. Perhaps, as at Vallombrosa among the Apennines, or St.
Saba in the desert, she has seen the gentlemen of her party
courteously received and comfortably lodged within the noble walls
of the convent, while she has been left to such nocturnal repose as
might be found in a flea-haunted pavilion outside, or in her tent
pitched in a valley of centipedes. She has been accustomed to think
of women generally as of the types common in decent English
society, a little strait-laced, or perhaps a little “gushing,” as the case
may be; and she has very honestly taken it for granted that, if there
be any serious harm in the world, it is the opposite sex who are
principally to blame. Suddenly, it is revealed to her that, by a large
number of her fellow-creatures, she herself and all her female
belongings,—her eminently respectable governesses, the Misses
Prunes and Prism; her dear old grandmother, Mrs. Goody-Good; and
her majestic aunt, Lady Bountiful,—all are looked upon as little better
than so many Succubi of Satan, sent to lure the souls of those
ridiculous old monks to destruction. The shock has not rarely
produced a peal of ungovernable laughter such as those hoary
cloisters had never echoed ere profane Saxon Balmorals trod their
pavement; but, when la pazza Signorina Inglese has retired to her
hotel or her tent, she finds that a new and very unpleasant light has
been thrown on matters whereon she had never reflected before.
Modern English Ritualism and Monasticism are doing their best, in
more ways than need now be specified, to introduce into English life
these Oriental and gross ideas about women, that pseudo-purity
which is most impure. In so far as they prevail, they will do us an
injury quite incalculable. Needless to say that, to people trained in
such a school, a female minister of religion would be a monstrous
thing. Almost as well might the creature trill out the melodies of La
Traviata or La Grande Duchesse, or perform her part in a ballet in
the costume of a sylph! The view of womanhood taken by these
ultra-sanctified persons and by the most cynical and profligate old
roués is practically the same. Surely, it is to be hoped that all this
worse than folly will be swept away in the blast of public impatience
and indignation which sooner or later must burst, like a breath of
wholesome autumn storm, through the incense-laden atmosphere of
Ritualism, and consign to the four winds all its trumpery of millinery,
chandlery, and upholstery, and the thoroughly base and materialistic
ideas which have come in along with them!
Secondly, among the bad reasons for the exclusion of women
from the pulpit, we have referred to St. Paul’s dictum, “I suffer not a
woman to speak in church.” Whatever high degree of human wisdom
we must all attribute to the greatest of the apostles, or even divine
authority, as the orthodox hypothesis of inspiration would give to his
words, there is absolutely no ground at all for the assumption that,
because he forbade women to affront public opprobrium by
preaching when women lived habitually shut up, each in her
gynaeceum, he would, likewise have forbidden them to offer
religious exhortations in a sacred place, when public sentiment has
become reconciled to their appearance in the streets, on the stage,
in the lecture-room, and even on the platform. The coolness, indeed,
wherewith the most orthodox persons always do practically take for
granted that Scriptural precepts, however rigid in form and seemingly
intended by their authors for perpetual observance, are to be set
aside without scruple, as applying to a bygone state of things, when
they do not chime in with their own inclinations and prejudices, is
only to be paralleled by the tenacity wherewith they maintain their
authority under every vicissitude, when they happen to coincide with
them. Let any one who quotes St. Paul’s incidental remark about
women speaking in church be called on to avow how far he has
taken to heart the solemn decree issued in the Encyclical Letter of
the one great Council of the assembled apostles, in the awfully
mysterious words, “It seemed good unto the Holy Ghost and to us”
(as if these were two separate opinions) “to lay upon you (the Gentile
world) no greater burden than these necessary things,—to abstain
from meats offered to idols, ... and from things strangled, and from
blood.” Lives there a modern Christian whose conscience would in
the smallest degree be troubled by taking the rice and ghee from a
Hindu temple, eating a rabbit strangled in a snare, or partaking of a
black-pudding or a Bologna sausage?
Passing now to the more reasonable reasons against admitting
women to the ministry,—the natural and incurable disabilities,
physical and mental, under which not a few of them labor,—the
answer comes at once to hand. Those among them who are unfitted
for the office must not undertake it, any more than dumb or stuttering
or imbecile men. There is no more difficulty in exclusion in one case
than in the other, though there may be a few more persons
necessarily excluded.
As to education, the case is much more serious. Certainly, unless
women can receive the same solid and extensive training as male
theological students (rather more strict and rigid than less so), to
make up for what may have been wanting of exactness in their
girlish school-room education, the appearance in our pulpits of a
number of female heads lightly stored with learning or logic would be
to the last degree ill-omened. But is there the smallest necessity why
this should be? If the desire of a woman to devote herself to religious
work were of any depth or worth consideration, she would not only
be willing, but crave, to pass through the severest studies, to fit
herself to the utmost of her abilities for so high and sacred a task;
and it is no longer an hypothesis, but a demonstrated fact, that if
women choose to study and have the fair opportunity of doing so,
there are not a few of them capable at all events of attaining to those
levels whereon men of the learned professions habitually take their
stand. If a few fickle or weak-minded women were to enter as
students such an institution, let us say, as Manchester New College,
they would be very speedily “choked off,” and no more harm would
be done than by the scores of youths “plucked” at Oxford and
Cambridge, and led to change their programme of life. Those
women, on the contrary, who should pass successfully through such
an intellectual and moral sieve, might thenceforth be very safely
trusted.
Again: the fear that Religion itself might come to be deconsidered,
as a result of the deconsideration of the sex of its ministers, must
prove groundless, if, instead of bringing a fresh element of weakness
into preaching and prayer, it should prove that (as I shall hope
presently to show) women are likely to pour a new stream of life into
what has so often become dry and unprofitable. After all, the inner
heart of humanity honors in its very core spiritual graces, over the
physical, the intellectual, and even the moral. Not the conquerors,
not the philosophers, not even those who have displayed most virtue
apart from religion, have been adored and deified among men, but
the prophets and saints who have ascended the mountain-peaks of
Prayer and thrown open the windows of Heaven.
Now, as we look back over the Christian centuries during which
the spiritual, God-loving, anti-carnal impulse sent forth from Judæa
has passed on, transmitted in waves of emotion from age to age and
land to land, does it not seem probable that among those who have
received it most fully, and might have helped its transmission most
effectually, there have been thousands of women? In effect, history
notoriously shows that, in the apostolic time and at the period of the
conversion of Europe, at least half the work achieved was due to the
ardor wherewith noble ladies not a few took up the task of
introducing and disseminating Christian ideas through courts and
camps. But, when the age for this kind of female patronage was
over, the powers of women to aid the cause which so many of them
have had next to their innermost hearts have been narrowed within
the walls of the home or even of the cloister. I do not doubt that this
home influence of women has indeed been incalculably great and
beneficent. It is hard to conceive what would be the sort of religion
remaining in an island colonized by men only, and with a population
recruited only by boys too young to remember a mother’s care. The
chances might lie between a society of Trappists, or a herd such as
the gold-diggers of a “Roaring Camp” in a Californian gulch. But,
because the religious influence of women in their homes has been
inestimably beneficial, is it, I ask, any reason for resting satisfied that
they should exercise no such influence outside their doors? Surely
there might have been prevision of just such a state of things as has
existed now for more than a thousand years in Christendom, in the
warning of the great Founder of Christianity that a light (when we are
so happy as to possess a light) should be set on a candlestick and
not under a bushel. If ever the time comes when the spiritual home
influence of women is allowed to radiate into the outer circle of public
life, there is every reason to believe that the inestimable element of
spirituality will make itself felt, touching the hearts of men with new
softness, awakening their consciences with the power of mother-like
gentleness, and inspiring quite a new reverence, alike for women
and for religion.
“Ah!” it will be said, “this is all very well, if women should, by some
happy chance, succeed well as preachers and ministers. If, on the
contrary, they fail, and make a miserable fiasco of their attempt, what
ridicule will they not draw on the most sacred things! Is it wise, is it
allowable, to incur such a risk?”
Feeling a good deal of sympathy with such an alarm as this,
having a terror (possibly exaggerated) of some day undergoing the
frightful experience of listening, in a place of worship from which I
could not decently escape, to the ignorant, shallow, dogmatic folly
which it has been my occasional penance to hear from women
elsewhere, and which has, undoubtedly, a character of its own still
more ignorant, more shallow, and more dogmatic than any folly
commonly to be heard from men, I here humbly confess that for
many years such a possibility has with me almost outweighed the
actual probability that women would in general fulfil the duties of the
ministry exceptionally well. But longer reflection has tended much to
remove my fears, while it has strengthened my hopes. In the first
place, I look with extreme confidence to such a sifting process as a
good theological college course would inevitably effect, to exclude
from concurrence all the frivolous, the half-hearted, the weak-
minded,—all those women, in short, who should not prove capable
of strong and steady mental labor, and willing to undergo it for
several consecutive years. From such as should pass triumphantly
through an ordeal of this kind, nothing very outrageous in the way of
folly or contemptible in the way of feminine “twaddle” would need to
be apprehended. And, again, there is a second and very satisfactory
ground for reassurance. Female ministers will certainly not (at all
events for a very long time to come) be appointed to lecture us by
any despotic authority. They cannot, indeed, be ministers at all,
unless some of us distinctly desire them to minister for our particular
benefit. By a happy decree of fate, it takes at least two or three
persons at any time to form a congregation. There must be the
hearers of the discourse as well as the speaker; and, as even the
sternest sticklers for the rights of women are not likely to proceed so
far as to demand compulsory attendance at female preachments,
there will always remain open a door of hope and refuge whereby
the oppressed may go free. The same argument applies in this case
as to the everlastingly reproduced fallacy about the franchise;
namely, that, if their political disabilities be removed, women will
invade the benches of St. Stephen’s. As nobody can ever be elected
an M.P., unless he or she find a majority of some constituency to
choose him or her as the best candidate, so neither can anybody
become a minister in one of the free churches, unless he or she find
a congregation ready to “sit under” him or her, as a tolerable
preacher. In either case, the woman who could so singularly impress
the majority of electors[33] or of parishioners with the conviction of
her supreme fitness as to induce them to choose her for the political
or religious office would be, undoubtedly, so very remarkable a
person that it would be ten thousand pities the world should be
deprived of her services.
Let us now turn to the other side of the shield. Having discussed
the validity of the arguments against the admission of women to the
ministry, let us see what is to be said directly in favor of such an
innovation.
In the first place, it is obvious that women have certain special
aptitudes and qualifications (as well as the above-named
inaptitudes) for such an office. We have been hitherto speaking as if
the work of a minister lay almost exclusively in the pulpit and
reading-desk; but we must remember that a very large and very
important part of it lies also in the homes of the members of the
congregation, in the hour of their sorrows and difficulties, their
sicknesses, doubts, repentances, death. Can any one doubt that the
tender and ready sympathies of women, and their superior tact and
discernment of character, their natural tendency to soothe and exhort
rather than to upbraid or threaten, are qualities more valuable for
such service than any which men, however pious, well-meaning, and
learned in casuistry, usually bring to such tasks? As a matter of fact,
women do, instinctively, perform the office of ministering angels on
these occasions all over the land, without waiting for any license or
consecration; while many of the best of the clergy either suffer all
their days from unconquerable shyness and the sense of their own
want of tact, or run speedily into the ruts of professional consolations
and exhortations in formal phraseology, meaning little or nothing to
speaker or hearer. Of all the irritating—I might say maddening—
things in human life, there is nothing worse than to be addressed in
the hour of mortal agony and despair, when our hearts, riven to the
core, could scarcely bear an angel’s touch, by a smug, self-satisfied
personage, who inflicts on us his cut-and-dried consolations and
exhortations to perfect quiescence and cheerful resignation; all the
time revealing, by every word and gesture, how utterly incapable he
is of comprehending even the shadow of our grief. It would be
difficult to estimate how many people (especially the intelligent men
of the humbler classes, who are the principal victims of these
tormentors),—men who would have suffered themselves to be led
with childlike submission by any wise and loving hand, even through
the wicket-gate of prayer and repentance, to the heavenly way,—
have been, on the contrary, goaded by tactless parsons into
hardness and rebellion. It is real, genuine, spontaneous sympathy
which alone can authorize any one to approach the sacred borders
of a great sorrow. Can any one doubt that women would, as a
general rule, feel this more tenderly, more genuinely than men? The
fear would be that the strain on the heart of a good woman, minister
of a large congregation, would be so great as very sensibly to tell
upon health and life.
Further, outside the region of sentiment, and even in the
intellectual way, so far as it concerns social influence, a woman has
special facilities. If she have extensive knowledge (and I am
presuming she will have acquired a good deal before entering the
ministry), it will generally be more ready to hand than that of a man.
Her humor, if she possesses a grain of that precious quality, will
have the great advantage, in all wordy skirmishing, of being playful,
quick as lightning, and always at command,—not like the ponderous

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7.1 The Power of Economic Growth

1) Real GDP refers to GDP adjusted for changes in ________.

3) Comparing GDPs over time requires the use of a ________.

Year GDP per capita

23) When current growth builds on past growth, growth is ________.

24) Which of the following statements is true?

50) Sustained growth refers to a growth process in which ________.

7.2 How Does a Nation's Economy Grow?

4) In a closed economy, ________ equal to zero.

8) In a closed economy without a government, ________.

10) Which of the following statements is true?

12) Explain how saving equals investment in a closed capitalist economy.

Country Country Country Country

18) The saving rate indicates ________.

21) Which of the following statements is true?

22) The saving rate in an economy equals ________.

40) Which of labor and capital experiences diminishing marginal product?

41) Sustained growth is best achieved through which of the following?

44) Which of the following statements is true?

45) Which of the following statements is true?

50) ________ experiences a growth pattern similar to that of an economy.

7.3 The History of Growth and Technology

7) Why was there essentially no sustained growth before modern times?

8) Fertility refers to ________.

12) Which of the following correctly identifies a Malthusian cycle?

16) Which of the following statements is true?

18) Describe the Malthusian Cycle.

21) Which statement about the Malthusian model is correct?

28) Which of the following statements is true of the Industrial Revolution?

32) Approximately when did the Industrial Revolution begin?

7.4 Growth, Inequality, and Poverty

1) Which of the following statements is true of inequality in the U.S. economy?

8) Which of the following is a problem associated with extreme levels of poverty?

12) On an average, growth in per capita income is associated with a ________.

13) Which of the following statements is true?

14) Which of the following statements is true?

Appendix: The Solow Growth Model

8) Which of the following statements is true?

14) What is the physical capital accumulation equation used by Solow?

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