Institutions, Policies, and Cross-Country Differences in Income and Growth

Institutions, policies, and cross-country differences in income and growth are complex and interrelated issues that have been the subject of much research and debate among economists.

Institutions, such as legal systems, property rights, and the rule of law, play a crucial role in promoting economic growth and development. Countries with strong institutions tend to have higher levels of economic growth and income per capita than those with weaker institutions. This is because institutions provide the framework for economic activity, and they shape the incentives for individuals and firms to invest and innovate.

Economic policies also play a key role in determining income and growth levels. For example, countries with low taxes and minimal regulation tend to have higher levels of economic growth than those with higher taxes and more regulation. Similarly, countries with open trade policies and flexible labor markets tend to have higher levels of income and growth than those with more protectionist policies.

Cross-country differences in income and growth can also be attributed to a variety of factors, including geography, culture, and history. For example, countries with abundant natural resources tend to have higher levels of income and growth than those without. Additionally, countries with long histories of political stability and economic freedom tend to have higher levels of income and growth than those without.

Overall, institutions, policies, and cross-country differences in income and growth are complex issues that are influenced by a variety of factors. To promote economic growth and development, it is important for countries to focus on building strong institutions and implementing policies that promote economic freedom and growth. Additionally, understanding the unique factors that contribute to cross-country differences in income and growth can help policymakers develop more effective strategies for promoting economic development.

1.As transportation and communication costs declined during the past half-century, international trade:
2.Which of the following is inconsistent with the theory of development of Thomas Malthus?
3.Which of the following is true of the most geographically disadvantaged countries?
4.Which of the following provides the best explanation for the low per capita income of today’s poorest countries?
5.During the past 1000 years, real income per person:
6.Compared to the least-free economies, the freest economies have:
7.Writing in 1798, Thomas Malthus argued that it would be impossible to sustain income much above the subsistence level because, if this occurred, it would trigger:
8.(I) Historically, countries with colonial settlers who planned on staying for long periods of time set up sound economic institutions. (II) Countries with harsh environments not suitable for permanent settlements resulted in colonial settlers favoring extractive institutions because they were often primarily interested in resource extraction.
9.According to the neoclassical theory of economic development, output is a function of
10.Which of the following has increased the incentive for countries to adopt sound institutions and policies in recent decades?
11.According to Thomas Malthus, economic growth cannot be sustained because:
12.(I) History, institutions, geography, demography, technology, and entrepreneurial discovery all exert an impact on economic development. (II) The huge reductions in the real cost of transportation and communication during the past half-century increased the incentive for developing countries, particularly those with the least geographic disadvantages, to adopt policies more consistent with human progress.
13.Research indicates that countries with colonial settlers who planned on staying were more likely to:
14.According to Acemoglu, Johnson, and Robinson, countries like the United States, Canada, Australia, and New Zealand were able to develop sound institutions and policies because:
15.What gives a country’s political decision-makers an incentive to adopt institutions and policies more consistent with economic freedom?
16.Which of the following about the growth rate of real per capita income since 1990 is true?
17.Which of the following is most likely to occur when the government becomes heavily involved in activities that provide favors to some individuals and businesses at the expense of others?
18.Identify the correct statement about the growth rates of per capita GDP during 1990-2018.
19.Which of the following occurred during the Transportation-Communication Revolution?
20.Which of the following is true?
21.Which one of the following factors is most important for the realization of gains from trade?
22.If a low-income country is going to derive substantial benefits by borrowing technologies from more advanced economies and by obtaining an influx of investment capital, it must have:
23.Data indicate that the Economic Freedom of the World (EFW) ratings of less-developed countries rose more rapidly than those of high-income countries during 1985-2015. Which of the following factors contributed to the increase in economic freedom of developing countries during these three decades?
24.Prior to 1800, most people:
25.Douglass North and Robert Thomas argue that “The factors we have listed (innovation, economies of scale, education, capital accumulation, etc.) are not causes of growth; they are growth.” This statement indicates that North and Thomas believe that:
26.The standardized steel shipping container resulted in a huge reduction in the cost of loading and unloading ocean shipments. Which of the following entrepreneurs played a central role in the development of the standardized steel shipping container?
27.Which of the following is true regarding the growth rate of per capita GDP during 1990-2018?
28.(I) Between 1974 and 2016, ocean shipping costs as a share of cargo value fell by approximately 50 percent. (II) Between 1970 and 2019, the price of air shipping as measured by the real revenue of air carriers per ton-kilometer increased by nearly 40 percent.
29.Which of the following is true of the 40 most geographically disadvantaged countries?
30.The World Bank defines the extreme and moderate poverty rates as the percent of the population living on less than $1.90 and $3.20 per day respectively (measured in 2011 PPP dollars). If the 1980 extreme and moderate poverty rates of the world were present today, there would be:
31.(I) Even though transportation and communication costs fell sharply during the decades following 1970, the volume of international trade declined. (II) As transportation and communication costs declined sharply in the half-century following 1970, people in poor countries became vastly more aware of what life was like in wealthier regions, and vice versa.
32.When less-developed countries began to grow during the 1970s and 1980s, how did the composition of their population change?
33.Researchers have found that when European colonists did not plan to settle permanently in a country because of the disease-prone climate or the high population density, they were:
34.The real per capita GDP of the developing countries outside of sub-Saharan Africa:
35.How did the Industrial Revolution influence the world’s per capita income and the degree of income inequality during 1800-1980?
36.Which of the following groups of countries is most geographically disadvantaged?
37.Which of the following is true of political institutions?
38.(I) Economics is unable to provide insight with regard to the types of institutions and policies that will lead to wealth creation, growth, and prosperity. (II) History, institutions, geography, demographics, technology, and entrepreneurial discovery all exert an impact on economic development.
39.As the cost of transportation and communication declined rapidly during recent decades, low-income developing economies were able to achieve impressive growth rates partially because they:
40.Identify the correct statement regarding the growth of per capita GDP during 1990-2018.
41.During the 150 years following the Industrial Revolution that started around 1800, real per capita income:
42.Which of the following is true of economic development during the past half-century?
43.The neoclassical theory of economic development stresses that:
44.Compared to the Industrial Revolution, how did worldwide per capita GDP and worldwide income inequality change during the Transportation-Communication Revolution?
45.The most geographically disadvantaged countries:
46.Which of the following factors are stressed by Jeffrey Sachs as sources of geographic disadvantage?
47.According to the economic freedom measure of the Canadian Fraser Institute, which of the following was true with regard to the level of economic freedom during 1985-2015?
48.According to the virtuous cycle of development, economic growth will increase the opportunity cost of children,
49.The Malthusian trap is the theory that:
50.The World Bank classifies persons with incomes of less than $1.90 per day (measured in 2011 international dollars) as living in extreme poverty. Between 1980 and 2017, the extreme poverty rate of the world:

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