1. In 2017, real per capita gross domestic product (GDP) in country B was $50,000. In 2018, real per capita GDP in country B was $52,500. Therefore, between 2017 and 2018, the rate of economic growth in country B was

A. 2%

B. 4.8%

C. 5%

D. 8%

E. There is not enough information to determine the economic growth rate

2. Country C is an oil-rich country in the Middle East. The oil in country C is ________ for the country.

A. human capital

B. physical capital

C. technology

D. a private property right

E. a natural resource

3. Why private property rights can promote economic growth?

A. Private property rights will lead to fluctuations in price level, which encourages investment.

B. Private property rights will lead to a decrease in the amount of human capital.

C. Private property rights create incentive for people to work harder.

D. Private property rights are not related to institutions.

E. Private property rights will lead to a decrease in the amount of physical capital.

4. Explain why stable inflation rate is important for economic growth.

A. If inflation rate is stable, price level will fluctuate a lot.

B. If inflation rate is stable, the exchange rate will fluctuate a lot.

C. Inflation rate stability is not related to institutions.

D. If inflation rate is stable, firms are more willing to invest.

5. Explain why landlocked countries are usually less developed compared with coastal countries.

A. Landlocked countries have more physical capital.

B. It is more challenging for landlocked countries to participate in international trade.

C. Landlocked countries have more natural resources.

D. Landlocked countries can transport goods more easily compared with coastal countries.