1. Directions

You will read passages on the topic and then answer questions about them. You may find vocabulary at the end of the test. Read the questions carefully before choosing the correct answers.

2. Questions of the test

Question 1. What is economic growth typically measured as?
A) The percentage increase in the number of people entering the labor force
B) The percentage increase in the capital stock
C) The percentage increase in the gross domestic product (GDP)
D) The percentage increase in the overall business environment

Question 2. Which of the following is NOT a factor that can contribute to economic growth?
A) An increase in the supply of labor
B) An increase in the capital stock
C) Improvements in the overall business environment
D) An increase in the overall level of happiness within a society

Question 3. Which of the following is NOT a potential negative consequence of economic growth?
A) Income inequality
B) Environmental degradation
C) Resource depletion
D) An increase in the overall level of happiness within a society

Question 4. Which of the following is a key factor in economic growth?
A) Population growth
B) An increase in the number of people entering the labor force
C) The development of new and more efficient production methods
D) All of the above

Question 5. Which of the following is NOT a theory about how economic growth occurs?
A) Government intervention is necessary to spur economic growth
B) A free market system is the most effective way to achieve economic growth
C) Economic growth is driven by a combination of both government intervention and a free market system
D) Economic growth is determined by astrological forces