When government inefficiencies exist and government officials can be bribed, then
A) dead capital will not exist.
B) the country will have positive economic growth.
C) a bribe will increase the cost of investing in capital.
D) property rights will be more secure since an official has been bribed to grant ownership to the business.
18) Which of the following is NOT true about dead capital?
A) Dead capital can lead to a situation where resources are not efficiently employed.
B) Dead capital can inhibit economic growth.
C) Companies will be less likely to want to invest when a country has a lot of dead capital.
D) Dead capital will lead to higher investment returns.
19) Dead capital is
A) unlikely to have any productive use.
B) unlikely to be applied to its most efficient use.
C) useful only if employed in a labor-intensive production process.
D) useful only if employed in a capital-intensive production process.
20) Which one of the following statements is true?
A) Dead capital is most frequently found in countries with well-defined property rights.
B) Dead capital is most frequently found in the most prosperous countries.
C) It is easy for dead capital resources to be allocated to their best possible use.
D) It is difficult for dead capital resources to be insured or traded.
21) Dead capital is most likely to exist when
A) there are restrictions on imports.
B) there are restrictions on exports.
C) property rights are well-defined.
D) residents of a country face barriers to establishing legal ownership of resources.
22) Extensive government restrictions on the use of capital are likely to
A) create dead capital.
B) enhance economic growth.
C) enhance economic freedom.
D) result in capital resources being devoted to their most efficient uses.
23) Economic growth is enhanced when
A) special interest groups acquire the political power to restrict competition.
B) capital resources are devoted to their most efficient use.
C) there are barriers to establishing legal ownership of capital resources.
D) scarce resources are made available for all citizens free of charge.
24) The problem of dead capital can be eliminated by
A) changing the structure of import tariffs.
B) increasing the labor force participation rate.
C) making it easier for people to establish legal ownership of productive capital.
D) restricting population growth.
25) Countries with the highest degrees of governmental bureaucratic inefficiency index
A) typically are nations with the highest real GDP per capita.
B) typically are nations with the lowest real GDP per capita.
C) normally have the lowest measured levels of dead capital.
D) normally have the highest measured levels of economic freedom.
26) Dead capital is
A) a capital resource that lacks a clear title of ownership.
B) a capital resource that is obsolete.
C) a capital resource that is used to produce non-competitive products.
D) a capital resource associated with the defense industry.
27) When there is a building that is used for production, but no one has clear property rights to it,
A) resources are guided to their best use by "the invisible hand."
B) this is known as "dead capital" and causes efficient production.
C) this is known as "dead capital" and causes no production.
D) this is known as "dead capital" and causes inefficient production.
28) All of the following are major factors limiting economic growth in developing countries EXCEPT
A) dead capital.
C) inefficient government regulation.
29) Countries with a high level of bureaucratic inefficiency tend to have low rates of real GDP growth because
A) of complications that keep capital goods from flowing to their most efficient use.
B) of poor accounting practices when determining real GDP.
C) of poor management skill development in companies.
D) they facilitate capital goods development.
30) The tolerance of bribe-taking by government officials
A) reduces economic uncertainty because all investors are aware of the practice.
B) reduces economic efficiency because rules governing property rights are not regularly enforced.
C) reduces government expenditures because public employees can be paid less.
D) reduces the need for government to impose taxes on poor people.
31) As productive capital goods are established in developing nations,
A) developed nations will become less prosperous.
B) they will be less likely to engage in international trade.
C) these countries will experience higher rates of economic growth.
D) portfolio investment will be replaced by loans from international aid agencies.
32) All of the following are examples of institutions that promote real economic growth EXCEPT
A) an efficient judicial system used to enforce contracts.
B) patent laws that protect innovation.
C) complex rules associated with business licensing used to promote careful business growth.
D) strong law enforcement used to protect business interests.
33) Explain the meaning of the term dead capital, and discuss why its existence retards economic growth.
34) Define what dead capital is and why economists are concerned with its existence.
35) How have government inefficiencies contributed to the creation of dead capital in the world's developing nations?
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