SFU Practice Final Exam 2 ECON102

SFU Practice Final Exam 2 ECON102 - SFU Practice Final Exam...

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SFU Practice Final Exam 2 ECON102 SECTION I: MULTIPLE CHOICE (1 point each) Instructions: For each question, circle one and only one answer that you think is correct. No explanation is necessary. 1. The main point of William Easterly’s argument regarding the foreign aid to Africa is that: a. The foreign aid to Africa should be significantly reduced or completely stopped. b. The opportunity cost of the foreign aid to Africa is too high; therefore, the funds that currently go to Africa could be put to a better economic use. c. The foreign aid to Africa should be in the form of goods and services rather than money. d. Better management of the funds provided as aid could result in larger improvements than a mere increase in the volume of the transferred funds. e. All of the above are correct. 2. The beneficial aspect of foreign direct investment (FDI) for a receiving country is that: a. FDI creates jobs. b. FDI helps poor countries share technologies that they would not have available otherwise. c. FDI can quickly be reversed in a panic. d. Only (a) and (b) are correct. 3. Approximately what percentage of countries in the world experience scarcity? a. 1% b. 50% c. 75% d. 100% 4. One of the most important determinants of economic growth is: a. the birth rate. b. the rate of infant mortality. c. the savings rate. d. the unemployment rate. 5. In a country that has an unstable government or judiciary, would you expect to see greater amounts of entrepreneurial activity or less? a. Less, because in an unstable economy there are fewer entrepreneurs. b. Less, because there would be an unreliable infrastructure for protecting property rights. c. More, because there would be fewer governmental restrictions. d. More, because in general there would be less taxation of commercial and research activities.2 6. The reasons that nations trade include the fact that: a. resources are distributed unequally across countries, and persons must trade to get more of what they want by specialization and trade.
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b. differences in climate lead to unequal abilities to grow certain types of food. c. no one country produces all of what citizens within the country want.
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SFU Practice Final Exam 2 ECON102 - SFU Practice Final Exam...

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