Question

1. The country of Shellberry has an economy that will double in 4 years. According to what you’ve learned about compound growth, what type of economy does Shellberry have?

A. Shellberry has a thriving and rapidly growing economy growing under 18% per year.

B. Shellberry has a thriving and rapidly growing economy growing over 20% per year.

C. Shellberry has a thriving and rapidly growing economy growing over 18% per year.

2. Which of the following promotes economic growth?

A. A clean natural environment.

B. Geographic location.

C. Political stability and property rights protection.

3. There are certain types of unemployment that exist at all times and determine the natural rate of unemployment. Which of the following types fit this description?

A. structural unemployment and cyclical unemployment

B. cyclical and frictional unemployment

C. frictional unemployment and structural unemployment

Answer 1

1) option C is correct. Using the rule of 72 to the required growth rate is 72/4 or 18%. Therefore the doubling time is 4 years and the rate of interest is 18%. if it is growing under 18% then the doubling time will be greater than 4 years

2) option C is correct. clean environment is also necessary but it is not going to promote economic growth. The safeguard of the intellectual property rights is essential because otherwise there will be exploitation of resources which is inefficient

3) option C is correct