Exercises 2

A) Q1: Which data would you select if the task is to compare the relative income level of countries?

(a) GNI

(b) GNI per capita

(c) GDP growth

(d) Inflation

 

Q2: Why do we use GNI (or GDP) per capita numbers for comparing the development levels of countries?

(a) because it reflects how much the country as a whole produces.

(b) because it shows how much individuals live in the particular country

(c) because it reflects how much an individual earns

(d) because it shows how much wealth is possessed by individuals

 

Q3: What does the data “GNI, Atlas method” refer to (by clicking on the particular expression, you will see the definition)?

(a) GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

(b) GNI is the sum of the wealth possessed by all resident consumers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

(c) GNI is the sum of the wealth possessed by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

(d) GNI is the sum of value added by all foreign producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

 

Q4: How much was the GNI per capita in China in 2005?

(a) 1,740

(b) 930

(c) 1.2 trillion

(d) 2.3 trillion

 

Q5: In which currency are the data given?

(a) Chinese juan

(b) Japanese yen

(c) Euro

(d) US dollar

 

Q6: According to the data on GNI per capita, is China a relatively rich or poor country? In order to provide the proper answer, you should compare the country to the data on world average. Please use the World Bank’s webpage again and select the term “World”.

(a) China is a relatively poor country since the world average is much above the Chinese data.

(b) China is a relatively rich country since the world average is much below the Chinese data.

(c) China is neither too poor, nor too rich since the world average is just the same as the Chinese data.

(d) China is a relatively developed country since the world average is much below the Chinese data.

 

(Note: the world average GNI per capita was 7,011.1 US dollars in 2005.)

 

Q7: How much was the annual GDP growth rate in the world in 2005?

(a) 4.1%

(b) 0%

(c) 3.5%

(d) not available

 

Q8: As compared to the world average GDP growth rate, did Chine perform well or poorly in 2005?

(a) China provided an extremely disappointing performance since its annual growth rate was much below than that of the world.

(b) China provided a spectacular performance since its annual growth rate was much above than that of the world.

(c) China provided a spectacular performance since its annual growth rate peaked at 8.2%.

(d) China provided a disappointing performance since its annual growth rate stagnated.

 

(Note: the Chinese annual GDP growth rate was 10.2% in 2005.)

 

Q9: Now check the data on GDP/GNI per capita and annual growth rate in another country, namely, Hungary.

How much was the GNI per capita in Hungary in 2005?

(a)101.6 billion

(b) 4,600

(c) 10,070

(d) 17,430

 

Q10: How much was the annual GDP growth rate in Hungary in 2005?

(a) no growth in that year

(b) 6.6%

(c) 9.9%

(d) 4.1%

 

Q11: According to the data, which country is richer: Hungary or China?

(a) China

(b) Chinese and Hungarian data are not comparable since they are given in different currencies

(c) the data do not allow us to make such conclusions

(d) Hungary

 

Q12: Select also Niger, Korea and Switzerland and check their GNI per capita data (in 2005). What is the correct order of their development (starting with the poorest one)?

(a) Korea, Niger, China, Hungary, Switzerland, USA

(b) China, Hungary, Niger, USA, Korea, Switzerland

(c) China, Niger, Korea, Hungary, Switzerland, USA

(d) Niger, China, Hungary, Korea, USA, Switzerland

 

B

Q1: Can you recall what the first prediction of the neoclassical growth theory was?

(a) There is no convergence among nations.

(b) There is no convergence among nations since the relatively poor nations will grow at a slower pace than the rich nations.

(c) There is a convergence among nations since the relatively poor nations will grow at a faster pace than the rich nations.

(d) There is a divergence among nations since the relatively poor nations cannot grow fast enough due to their severe economic, political and geographic limitations.

 

Q2: Based on the data, can you see a real convergence among the nations?

(a) No, not really.

(b) Yes, it is rather obvious from the data.

(c) The data do not show any clear trend.

(d) It is not possible to make such a judgement since the data are provided in different currencies.