Question 1

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

Accepted Answer

A)  cutting debt relief for DVCs.
B)  directing foreign aid to the more affluent DVCs.
C)  restricting immigration of low-skilled workers from DVCs.
D)  reducing tariffs and import quotas on labor-intensive products.E) None of the above
F) A) and B)

Question 2

Which of the given nations would be middle-income developing countries (DVCs) , according to the World Bank?

Accepted Answer

A)  country E only
B)  countries A, D, and E
C)  countries D and E
D)  country D onlyE) A) and D)
F) C) and D)

Question 3

Most economists agree that government efforts in economic development must be

Accepted Answer

A)  employed to substitute for private efforts.
B)  designed to support private efforts.
C)  the sole driver of economic development.
D)  kept at a minimum because we can always rely on markets.E) B) and C)
F) A) and C)

Question 4

Which of these sets of nations consists of high-income economies?

Accepted Answer

A)  Brazil, Thailand, and South Africa
B)  China, India, and Russia
C)  Canada, Switzerland, and France
D)  United States, South Korea, and MexicoE) A) and D)
F) A) and B)

Question 5

Infrastructure is best illustrated by

Accepted Answer

A)  farm equipment.
B)  school buildings and highways.
C)  machinery and equipment for the production of consumer goods.
D)  government tax revenues.E) A) and B)
F) A) and C)

Question 6

One recommended policy that IACs could adopt to help DVCs is to recruit and hire skilled workers from DVCs for businesses in IACs.

Accepted Answer

A) True 
 B)False

Question 7

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

A) True 
 B)False

Question 8

Most of the DVCs find it difficult to accumulate capital goods because

Accepted Answer

A)  the terms of trade prohibit the inflow of private capital from the advanced nations.
B)  it is very difficult to restrict consumption and thus to free resources for capital goods production.
C)  domestic monetary policies designed to achieve price stability result in low interest rates, thereby discouraging investment.
D)  investment is interest inelastic in DVCs.E) A) and B)
F) A) and C)

Question 9

Foreign aid to the DVCs has been criticized

Accepted Answer

A)  because it may generate economic dependence on the IACs.
B)  because it encourages the centralization of government power over the economy.
C)  because government corruption in the DVCs causes aid to be misused.
D)  for all of these reasons.E) A) and D)
F) A) and C)

Question 10

An advantage of direct foreign investment (compared to foreign loans)is that management skill and technological knowledge often accompany such capital flows.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is most characteristic of most developing nations?

Accepted Answer

A)  roughly equal distribution of income among the population
B)  high levels of labor productivity in agriculture
C)  low propensity to consume goods and services
D)  low levels of saving and investmentE) All of the above
F) A) and D)

Question 12

Population growth remains high in most DVCs

Accepted Answer

A)  because religious and sociocultural considerations favor large families.
B)  because children may provide economic security for aging parents.
C)  because children provide agricultural labor in rural areas.
D)  for all of these reasons.E) A) and B)
F) All of the above

Question 13

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since the Second World War because of U.S. aid programs.

Accepted Answer

A) True 
 B)False

Question 14

One common measure of the "standard of living" in a nation is

Accepted Answer

A)  real income per capita.
B)  unemployment rate.
C)  real GDP.
D)  population size.E) A) and D)
F) B) and D)

Question 15

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Accepted Answer

A)  owned and managed by the public sector.
B)  distributed more equitably across business sectors.
C)  reallocated to export industries.
D)  used more efficiently.E) A) and C)
F) A) and D)

Question 16

Most of the flow of foreign aid goes to

Accepted Answer

A)  the poorest of developing countries (DVCs) .
B)  the most affluent of the developing country populations.
C)  the smallest developing countries.
D)  about 70 percent of the world's poorest people.E) A) and B)
F) A) and C)

Question 17

Population expansion can impede economic development for the following reasons except

Accepted Answer

A)  reduced saving and investment rates.
B)  reduced productivity of labor.
C)  a larger supply of labor.
D)  its contribution to urban congestion and problems.E) C) and D)
F) All of the above

Question 18

Based on population and economic development trends, the world population is expected to ____ in the last part of this century.

Accepted Answer

A)  explode
B)  increase mildly
C)  become stable and constant
D)  declineE) None of the above
F) All of the above

Question 19

Which two of the following countries had the worst score in the Corruption Perceptions Index in 2015?

Accepted Answer

A)  Italy and Greece
B)  China and Singapore
C)  Mexico and Russia
D)  Somalia and AfghanistanE) A) and C)
F) A) and D)

Question 20

Assume the total real income of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per capita income has

Accepted Answer

A)  increased by $25 per person.
B)  decreased by $25 per person.
C)  increased by $533 per person.
D)  decreased by $533 per person.E) B) and D)
F) B) and C)

Exam 28: The Economics of Developing Countries

Foreign aid to the DVCs has been criticized

Correct AnswerverifiedShow Answer

Which of these sets of nations consists of high-income economies?

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Population expansion can impede economic development for the following reasons except

Correct AnswerverifiedShow Answer

Which of the following is most characteristic of most developing nations?

Correct AnswerverifiedShow Answer

An advantage of direct foreign investment (compared to foreign loans)is that management skill and technological knowledge often accompany such capital flows.

Correct AnswerverifiedShow Answer

One recommended policy that IACs could adopt to help DVCs is to recruit and hire skilled workers from DVCs for businesses in IACs.

Correct AnswerverifiedShow Answer

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Correct AnswerverifiedShow Answer

Most of the DVCs find it difficult to accumulate capital goods because

Correct AnswerverifiedShow Answer

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since the Second World War because of U.S. aid programs.

Correct AnswerverifiedShow Answer

Most of the flow of foreign aid goes to

Correct AnswerverifiedShow Answer

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

Correct AnswerverifiedShow Answer

Most economists agree that government efforts in economic development must be

Correct AnswerverifiedShow Answer

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Correct AnswerverifiedShow Answer

Which of the given nations would be middle-income developing countries (DVCs) , according to the World Bank?

Correct AnswerverifiedShow Answer

Infrastructure is best illustrated by

Correct AnswerverifiedShow Answer

Assume the total real income of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per capita income has

Correct AnswerverifiedShow Answer

Population growth remains high in most DVCs

Correct AnswerverifiedShow Answer

One common measure of the "standard of living" in a nation is

Correct AnswerverifiedShow Answer

Which two of the following countries had the worst score in the Corruption Perceptions Index in 2015?

Correct AnswerverifiedShow Answer

Based on population and economic development trends, the world population is expected to ____ in the last part of this century.

Correct AnswerverifiedShow Answer

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