Question 1

Making "soft loans"-loans that may not be self-liquidating-to the very poorest of the developing countries on relatively liberal terms is the primary function of the

Accepted Answer

A)   United Nations.
B)   International Finance Corporation.
C)   New Global Compact.
D)   International Development Association.E) None of the above
F) B) and C)

Question 2

A recommended policy for developing countries to stimulate economic growth would be

Accepted Answer

A)   abolishing central banks.
B)   more central planning by government.
C)   encouraging more direct foreign investment.
D)   expanding employment in state industries.E) C) and D)
F) B) and D)

Question 3

Which of the following is not a way for industrially advanced countries (IACs)  to help developing countries (DVCs)  achieve faster economic growth?

Accepted Answer

A)   expanding trade
B)   admitting more temporary workers
C)   subsidizing their own (i.e., the IACs')  agricultural sectors
D)   discouraging arms salesE) None of the above
F) B) and C)

Question 4

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) A) and B)
F) None of the above

Question 5

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

Accepted Answer

A) True 
 B)False

Question 6

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 B)
F) A) and C)

Question 7

A study concludes that in DVCs, rising incomes must first be achieved and only then will there be slower population growth. What view of DVC population growth would this study be supporting?

Accepted Answer

A)   traditional view
B)   peasant agriculture view
C)   the will-to-develop view
D)   demographic transition viewE) A) and B)
F) C) and D)

Question 8

Which of the following statements is correct?

Accepted Answer

A)   Saving is high in less-developed nations because the opportunities for consumption are limited.
B)   For developing nations, the annual rate of population increase is about 5 percent.
C)   Most of the labor forces of developing nations are engaged in light industrial production.
D)   Investment is low in developing nations, making it difficult to increase productivity and incomes.E) C) and D)
F) B) and C)

Question 9

Many economists believe that the key to breaking the vicious circle of poverty is to

Accepted Answer

A)   cut down the mortality rates in poor nations.
B)   reduce the birth rates in poor nations.
C)   increase the mobility of labor and migration.
D)   increase the rate of capital accumulation in poor nations.E) B) and D)
F) B) and C)

Question 10

In recent decades,

Accepted Answer

A)   all countries classified as DVCs have had little or no economic growth.
B)   some nations classified as DVCs have grown rapidly, while others have grown very slowly or not at all.
C)   all countries classified as DVCs have experienced rapid economic growth and rising living standards.
D)   all countries classified as low-income DVCs have had declining per capita GDPs.E) A) and D)
F) B) and C)

Question 11

The diversion of surplus labor in agriculture to the production of schools or roads in developing countries is described as

Accepted Answer

A)   land reform.
B)   the brain drain.
C)   in-kind investment.
D)   a capital-using technological advance.E) A) and B)
F) A) and C)

Question 12

The lack of an entrepreneurial class in developing nations tends to

Accepted Answer

A)   keep workers from migrating to cities from rural areas.
B)   reduce the level of capital investment.
C)   force the need for land reform.
D)   keep governments stable.E) C) and D)
F) None of the above

Question 13

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Accepted Answer

A)   capital using.
B)   capital saving.
C)   capital intensive.
D)   an in-kind investment.E) C) and D)
F) A) and B)

Question 14

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 D)
F) A) and C)

Question 15

The absolute income gap between the IACs and the DVCs has

Accepted Answer

A)   remained constant over time.
B)   increased over time.
C)   decreased over time.
D)   increased in nominal terms but decreased in real terms.E) B) and D)
F) C) and D)

Question 16

Approximately what percentage of the world's income is received by the poorest one-fifth of the world's population?

Accepted Answer

A)   2
B)   5
C)   7
D)   10E) All of the above
F) None of the above

Question 17

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

Accepted Answer

A)   declining death rates
B)   increasing birth rates
C)   reduced infant mortality
D)   decreasing life expectancyE) A) and B)
F) All of the above

Question 18

The World Bank operates primarily as a

Accepted Answer

A)   deposit institution for nations' gold supplies.
B)   coordinator for private banks in major nations.
C)   lender of last resort to less-developed nations.
D)   U.S. government agency that supervises banks worldwide.E) A) and C)
F) C) and D)

Question 19

The vicious circle of poverty is based on the connections between low income, low saving, low investment, and low productivity.

Accepted Answer

A) True 
 B)False

Question 20

Economic growth in the DVCs might increase if IACs

Accepted Answer

A)   reduce their tariffs and import quotas.
B)   encourage more immigration of highly skilled DVC workers.
C)   outlaw direct private investment abroad by IAC corporations.
D)   discourage capital flight to the DVCs.E) A) and D)
F) B) and C)

Exam 28: The Economics of Developing Countries

Economic growth in the DVCs might increase if IACs

Correct AnswerverifiedShow Answer

Which of the following is not a way for industrially advanced countries (IACs) to help developing countries (DVCs) achieve faster economic growth?

Correct AnswerverifiedShow Answer

Approximately what percentage of the world's income is received by the poorest one-fifth of the world's population?

Correct AnswerverifiedShow Answer

Many economists believe that the key to breaking the vicious circle of poverty is to

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The absolute income gap between the IACs and the DVCs has

Correct AnswerverifiedShow Answer

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

Correct AnswerverifiedShow Answer

The World Bank operates primarily as a

Correct AnswerverifiedShow Answer

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Correct AnswerverifiedShow Answer

In recent decades,

Correct AnswerverifiedShow Answer

Making "soft loans"-loans that may not be self-liquidating-to the very poorest of the developing countries on relatively liberal terms is the primary function of the

Correct AnswerverifiedShow Answer

A recommended policy for developing countries to stimulate economic growth would be

Correct AnswerverifiedShow Answer

The vicious circle of poverty is based on the connections between low income, low saving, low investment, and low productivity.

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

The diversion of surplus labor in agriculture to the production of schools or roads in developing countries is described as

Correct AnswerverifiedShow Answer

A study concludes that in DVCs, rising incomes must first be achieved and only then will there be slower population growth. What view of DVC population growth would this study be supporting?

Correct AnswerverifiedShow Answer

The lack of an entrepreneurial class in developing nations tends to

Correct AnswerverifiedShow Answer

Most of the flow of foreign aid goes to

Correct AnswerverifiedShow Answer

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

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

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