Question 1

Which of the following does not correlate positively with economic growth?

Accepted Answer

A)  output per capita
B)  life expectancy
C)  the percentage of the population engaged in agriculture
D)  the literacy rateE) None of the above
F) A) and B)

Question 2

The international agency that lends money to DVCs for economic development projects is the

Accepted Answer

A)  World Bank.
B)  International Monetary Fund (IMF) .
C)  World Trade Organization (WTO) .
D)  World Credit Union.E) B) and D)
F) A) and D)

Question 3

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Accepted Answer

A)  all sponsored by local governments.
B)  done through the United Nations.
C)  launched by universities and colleges.
D)  focused on giving direct aid to poor individuals.E) C) and D)
F) All of the above

Question 4

Which of the following is not a DVC policy likely to increase DVC economic growth?

Accepted Answer

A)  encouraging direct foreign investment
B)  opening economics to world trade
C)  establishing independent central banks
D)  encouraging emigration of highly skilled workersE) B) and D)
F) A) and D)

Question 5

Successful foreign aid programs

Accepted Answer

A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left.
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right.
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve.
D)  cause a DVC's exchange rate to depreciate.E) C) and D)
F) None of the above

Question 6

Which of the following factors contributes most to the high per capita incomes in developed nations?

Accepted Answer

A)  high rates of population growth
B)  high rates of economic growth
C)  low rates of investment
D)  low rates of savingE) B) and C)
F) B) and D)

Question 7

Which of the following is a factor limiting saving in DVCs?

Accepted Answer

A)  the lack of foreign aid and loans from the World Bank
B)  Governments control the banking system and set low interest rates.
C)  the flight of private savings to investments in IACs, where there is less risk
D)  Those who do save make their savings available only to their families, who use it for consumption.E) B) and C)
F) B) and D)

Question 8

The demographic transition concept suggests that

Accepted Answer

A)  effective birth control is the primary prerequisite of DVC income growth.
B)  income growth must first occur before DVC birth rates will decline.
C)  children are economic assets in the IACs but economic liabilities in the DVCs.
D)  the IACs will have higher birth rates than the DVCs.E) A) and B)
F) B) and C)

Question 9

The poorest 20 percent of the world's population receive what percentage of world income?

Accepted Answer

A)  less than 2 percent
B)  about 4 percent
C)  around 8 percent
D)  close to 10 percentE) None of the above
F) A) and B)

Question 10

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

Accepted Answer

A)  are concentrated in the public, rather than the private, sector.
B)  are concentrated in the private, rather than the public, sector.
C)  are concentrated in urban, rather than rural, areas.
D)  have emigrated from the DVCs to the IACs.E) None of the above
F) C) and D)

Question 11

An IAC (industrially advanced country)  had a per capita income of $28,200, while a DVC (developing country)  had a per capita income of $1,200 in a given year.If both countries experience a per-capita-income growth of 2 percent, then their respective per-capita-income levels one year later will become

Accepted Answer

A)  $33,840 and $1,440.
B)  $28,764 and $1,224.
C)  $33,840 and $1,224.
D)  $28,764 and $1,440.E) All of the above
F) C) and D)

Question 12

An obstacle to economic growth in developing countries is

Accepted Answer

A)  the limited demand for natural resources.
B)  the limited supply of capital goods.
C)  a decline in population growth.
D)  the low productivity of capital.E) B) and D)
F) B) and C)

Question 13

Which of the following describes the vicious circle of poverty?

Accepted Answer

A)  Government spending for public goods is inflationary, and this undermines incentives to save and invest.
B)  Higher incomes increase consumption at the expense of capital accumulation, which causes income to fall.
C)  Low per capita incomes cause low levels of saving and investment, which mean low productivity and therefore low incomes.
D)  A growing national income increases the demand for money, which increases the interest rate and reduces investment.E) B) and C)
F) A) and B)

Question 14

Low-income developing countries generally have the following characteristics except

Accepted Answer

A)  low population growth rates.
B)  low levels of industrialization.
C)  dependency on exports of agricultural products or raw materials.
D)  minimal amounts of capital resources.E) A) and B)
F) A) and C)

Question 15

Which of the following factors contributes to the weak economic growth in DVCs?

Accepted Answer

A)  an increase in labor productivity in DVCs
B)  a decrease in international debts of DVCs
C)  an increase in the rate of saving in a DVC
D)  a decrease in the prices of DVC natural resourcesE) B) and C)
F) A) and B)

Question 16

Industrially advanced countries can best help developing countries by

Accepted Answer

A)  establishing price supports for the products produced by DVCs.
B)  increasing tariffs and quotas on products produced by DVCs.
C)  increasing the flows of private capital to DVCs.
D)  increasing control over DVCs' capital markets.E) A) and B)
F) C) and D)

Question 17

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Accepted Answer

A)  admitting more temporary workers from DVCs
B)  reducing the amount of debt relief for DVCs to make them less dependent
C)  eliminating loans from the World Bank because it encourages bureaucracy
D)  eliminating financial control of central banks where they have been establishedE) C) and D)
F) B) and C)

Question 18

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Accepted Answer

A)  diminishing returns may be encountered in increasing total output.
B)  population increases may dissipate the increase in real output.
C)  disguised unemployment in agriculture will persist.
D)  surplus farm labor may move from rural areas to industrial areas, causing unemployment.E) None of the above
F) B) and C)

Question 19

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Accepted Answer

A)  causing higher prices for imported food products.
B)  lowering saving rates in the DVCs.
C)  encouraging "brain drains" from the DVCs.
D)  reducing world agricultural prices and thus export income of the DVCs.E) A) and B)
F) A) and C)

Question 20

Infrastructure is best illustrated by

Accepted Answer

A)  business equipment and factories.
B)  agricultural machinery and tools.
C)  financial institutions.
D)  roads and bridges.E) A) and B)
F) All of the above

Exam 19: The Economics of Developing Countries

Successful foreign aid programs

Correct Answer
verified

Which of the following does not correlate positively with economic growth?

Correct Answer
verified

Which of the following describes the vicious circle of poverty?

Correct Answer
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Correct Answer
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Which of the following is a factor limiting saving in DVCs?

Correct Answer
verified

Which of the following factors contributes to the weak economic growth in DVCs?

Correct Answer
verified

The poorest 20 percent of the world's population receive what percentage of world income?

Correct Answer
verified

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Correct Answer
verified

The demographic transition concept suggests that

Correct Answer
verified

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Correct Answer
verified

Industrially advanced countries can best help developing countries by

Correct Answer
verified

Which of the following factors contributes most to the high per capita incomes in developed nations?

Correct Answer
verified

The international agency that lends money to DVCs for economic development projects is the

Correct Answer
verified

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Correct Answer
verified

Low-income developing countries generally have the following characteristics except

Correct Answer
verified

Which of the following is not a DVC policy likely to increase DVC economic growth?

Correct Answer
verified

An obstacle to economic growth in developing countries is

Correct Answer
verified

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

Correct Answer
verified

Infrastructure is best illustrated by

Correct Answer
verified

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Correct Answer
verified

Exam 19: The Economics of Developing Countries

Successful foreign aid programs

Correct AnswerverifiedShow Answer

Which of the following does not correlate positively with economic growth?

Correct AnswerverifiedShow Answer

Which of the following describes the vicious circle of poverty?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is a factor limiting saving in DVCs?

Correct AnswerverifiedShow Answer

Which of the following factors contributes to the weak economic growth in DVCs?

Correct AnswerverifiedShow Answer

The poorest 20 percent of the world's population receive what percentage of world income?

Correct AnswerverifiedShow Answer

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Correct AnswerverifiedShow Answer

The demographic transition concept suggests that

Correct AnswerverifiedShow Answer

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Correct AnswerverifiedShow Answer

Industrially advanced countries can best help developing countries by

Correct AnswerverifiedShow Answer

Which of the following factors contributes most to the high per capita incomes in developed nations?

Correct AnswerverifiedShow Answer

The international agency that lends money to DVCs for economic development projects is the

Correct AnswerverifiedShow Answer

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Correct AnswerverifiedShow Answer

Low-income developing countries generally have the following characteristics except

Correct AnswerverifiedShow Answer

Which of the following is not a DVC policy likely to increase DVC economic growth?

Correct AnswerverifiedShow Answer

An obstacle to economic growth in developing countries is

Correct AnswerverifiedShow Answer

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

Correct AnswerverifiedShow Answer

Infrastructure is best illustrated by

Correct AnswerverifiedShow Answer

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Correct AnswerverifiedShow Answer

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