Question 1

The low per capita outputs of the DVCs are explained by:

Accepted Answer

A)   insufficient saving and investment.
B)   overinvestment in human capital.
C)   slow population growth.
D)   excessively rapid technological advance.E) All of the above
F) A) and B)

Question 2

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

A) True 
 B)False

Question 3

Which attitude or custom is the most conducive to long-term economic growth?

Accepted Answer

A)   Focus on group contentment rather than individual achievement.
B)   The belief there is little or no correlation between an individual's economic actions and her or his economic fortunes.
C)   Direct connections between individual efforts (including educational efforts) and economic rewards.
D)   Use of the majority of resources for religious structures and ceremonies.E) A) and B)
F) None of the above

Question 4

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) B) and C)
F) All of the above

Question 5

The exports of the DVCs consist largely of:

Accepted Answer

A)   high-technology goods.
B)   raw materials and farm products.
C)   manufactured goods.
D)   services and financial capital.E) All of the above
F) None of the above

Question 6

Which of these sets of countries has the greatest degree of internal corruption as of 2012,according to Transparency International?

Accepted Answer

A)   Somalia,Afghanistan,and Venezuela.
B)   Finland,Denmark,and New Zealand.
C)   United States,Greece,and Italy.
D)   Mexico,China,and India.E) All of the above
F) A) and B)

Question 7

Examples of low-income developing countries are:

Accepted Answer

A)   Switzerland,New Zealand,and Australia.
B)   Germany,Austria,and Italy.
C)   Sudan,Bangladesh,and Ethiopia.
D)   Mexico,South Korea,and Brazil.E) A) and C)
F) B) and D)

Question 8

State industries are notoriously poor "incubators" for the development of profit-focused,entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of:

Accepted Answer

A)   free immigration and emigration.
B)   privatizing state industries.
C)   central planning.
D)   free trade.E) B) and C)
F) A) and C)

Question 9

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 10

Many countries remain poor because they currently are poor.This statement summarizes the:

Accepted Answer

A)   infrastructure problem.
B)   vicious circle of poverty.
C)   demographic transition problem.
D)   problem of capital flight.E) A) and B)
F) A) and C)

Question 11

At the present time,the largest percentage of the national incomes of the low-income DVCs is used for:

Accepted Answer

A)   imports of the finished products of foreign industries.
B)   food.
C)   infrastructure.
D)   industrial development.E) A) and B)
F) A) and C)

Question 12

According to the United Nations,approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

Accepted Answer

A)   20 percent.
B)   30 percent.
C)   60 percent.
D)   80 percent.E) A) and B)
F) C) and D)

Question 13

Economic growth in the DVCs might increase if IACs:

Accepted Answer

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

Question 14

Suppose that Alpha's real output rose from $400 billion in year 1 to $428 billion in year 2.Its growth rate for this period was:

Accepted Answer

A)   14 percent.
B)   12 percent.
C)   9 percent.
D)   7 percent.E) A) and B)
F) A) and C)

Question 15

Capital flight refers to:

Accepted Answer

A)   the tendency of large corporations of IACs to build new plants in the DVCs because labor is cheaper.
B)   DVC citizens accumulating or investing their savings in the IACs.
C)   the high international mobility of speculative funds caused by variations in exchange rates.
D)   the tendency of DVCs to overinvest in commercial aircraft.E) A) and B)
F) A) and D)

Question 16

If a technological advance expands output and requires a smaller investment in capital goods,this technological advance:

Accepted Answer

A)   is capital-using.
B)   must involve nonfinancial investment.
C)   is capital-saving.
D)   must pertain to the infrastructure.E) A) and B)
F) C) and D)

Question 17

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Accepted Answer

A) True 
 B)False

Question 18

Per capita incomes must first grow for birth rates to decline.This statement describes the:

Accepted Answer

A)   human capital view of population growth.
B)   traditional view of population growth.
C)   capricious universe view.
D)   demographic transition view of population growth.E) A) and B)
F) All of the above

Question 19

The DVCs are:

Accepted Answer

A)   located primarily in Northern Europe.
B)   located primarily in Western Europe.
C)   located primarily in Africa,Asia,and Latin America.
D)   more or less evenly distributed over the various continents.E) A) and D)
F) A) and C)

Question 20

Investment in kind refers to the possibility that:

Accepted Answer

A)   DVCs will invest for the purpose of becoming less dependent on world markets.
B)   a DVC will overinvest in industries in which it has a comparative advantage,disrupting its development program.
C)   newly established manufacturing firms may expand by reinvesting their profits.
D)   surplus labor in,say,agriculture can be diverted to the production of simple capital goods such as earthen dams.E) B) and C)
F) All of the above

Exam 41: The Economics of Developing Countries

Many countries remain poor because they currently are poor.This statement summarizes the:

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Suppose that Alpha's real output rose from $400 billion in year 1 to $428 billion in year 2.Its growth rate for this period was:

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At the present time,the largest percentage of the national incomes of the low-income DVCs is used for:

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Which attitude or custom is the most conducive to long-term economic growth?

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Most of the DVCs of the world are located in Western Europe.

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Which of these sets of countries has the greatest degree of internal corruption as of 2012,according to Transparency International?

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Examples of low-income developing countries are:

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The low per capita outputs of the DVCs are explained by:

Correct AnswerverifiedShow Answer

State industries are notoriously poor "incubators" for the development of profit-focused,entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of:

Correct AnswerverifiedShow Answer

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Correct AnswerverifiedShow Answer

According to the United Nations,approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

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The DVCs are:

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Successful foreign aid programs:

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Economic growth in the DVCs might increase if IACs:

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Investment in kind refers to the possibility that:

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

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Capital flight refers to:

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Per capita incomes must first grow for birth rates to decline.This statement describes the:

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The exports of the DVCs consist largely of:

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If a technological advance expands output and requires a smaller investment in capital goods,this technological advance:

Correct AnswerverifiedShow Answer

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