1. Which of the following factors contribute to
economic growth?
A. a decline in the stock of physical capital
B. the discovery of new oil reserves
C. a decrease in the productivity of labor
D. a decrease in the quantity of labor due to emigration
2. Which of the following is not considered a factor
contributing to economic growth?
A. Growth in the quality of labor resources used
B. Growth in physical capital inputs (machines, tools,
buildings, and inventories)
C. Growth in the money supply relative to the growth of final
goods and services
D. Government protection of property rights
Answer
1. The correct option is B. The discovery of new oil reserves.
New oil reserves can contribute immensely to economic growth of a
nation as they increase the resources of the nation. Oil has
multifold uses and being a scarce resource, it is highly demanded
all over the world. Discovery of such reserves can boost the
exports of the nation as well as internal production value. All
other options do not contribute to the economic growth of any
nation.
2. The correct option is D. Government protection of property
rights. Government protection of property rights is not considered
to be a direct factor of an increase in economic growth as such a
protection hinders the free flow of market forces and therefore act
as an obstacle to the free purchase and sale of the property.
Government protection is based more on the principles of equality
and peace than on the principle of survival of the fittest and
therefore may not ensure economic growth via this protection
function.