Question 1

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Accepted Answer

A)  use existing resources more efficiently and expand the available resources.
B)  expand the government sector and preserve all available resources.
C)  enhance regulation and taxation, and redistribute income to reduce income disparity.
D)  expand the money supply and eliminate budget deficits.E) B) and C)
F) None of the above

Question 2

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 3

Which of the following is characteristic of DVCs?

Accepted Answer

A)  A large percentage of the labor force is in agriculture.
B)  There are high levels of saving and investment.
C)  They have high labor productivity.
D)  There are high levels of training.E) C) and D)
F) None of the above

Question 4

The industrially advanced countries (IACs)  had an average per capita income in 2014 of around

Accepted Answer

A)  $50,000 per person.
B)  $27,000 per person.
C)  $38,000 per person.
D)  $61,000 per person.E) All of the above
F) None of the above

Question 5

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

Accepted Answer

A) True 
 B)False

Question 6

To be classified as a low-income developing country, annual per capita income in 2014 needed to be

Accepted Answer

A)  $1,045 or less.
B)  $628 or less.
C)  $2,018 or less.
D)  $925 or less.E) A) and C)
F) B) and C)

Question 7

Which of the following would be an example of direct foreign investment in DVCs?

Accepted Answer

A)  a grant from the World Bank to build an irrigation project in Kenya
B)  the financing of a new chemical plant in Peru by a German company
C)  a low-interest loan from the U.S.government to Turkey to purchase military hardware
D)  a loan from the Japanese government to the Indonesian government to pay for electronic equipmentE) B) and D)
F) B) and C)

Question 8

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a characteristic of human resources in the poorest DVCs?

Accepted Answer

A)  Populations are large.
B)  Unemployment and underemployment are widespread.
C)  Population growth is low.
D)  Labor productivity is low.E) C) and D)
F) B) and C)

Question 10

One reason why foreign aid is viewed as harmful is that it promotes dependency.

Accepted Answer

A) True 
 B)False

Question 11

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC.If both nations realize a 4 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Accepted Answer

A)  remain unchanged at $19,000.
B)  increase by $760.
C)  decrease by $1,000.
D)  increase by $19,760.E) B) and C)
F) A) and B)

Question 12

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) A) and B)
F) A) and C)

Question 13

Surplus agricultural labor in a developing nation usually means that there is

Accepted Answer

A)  a caste system.
B)  widespread underemployment.
C)  immobility of labor resources.
D)  increased investment in agriculture.E) B) and D)
F) All of the above

Question 14

The primary function of the International Finance Corporation (IFC)  is to

Accepted Answer

A)  provide U.S.surplus food to low-income countries.
B)  provide short-term loans to poor countries to finance international trade deficits.
C)  make infrastructure loans, that is, loans for highways, schools, communication facilities, and so forth.
D)  make loans to private enterprises in the DVCs.E) B) and D)
F) A) and B)

Question 15

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 16

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

Accepted Answer

A)  country A only
B)  countries A, D, and E
C)  countries A and E
D)  countries A, B, D, and EE) A) and B)
F) None of the above

Question 17

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

Accepted Answer

A)  low trade barriers
B)  large international debts
C)  an increase in the rate of saving
D)  a slowing of population growthE) None of the above
F) All of the above

Question 18

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

Accepted Answer

A) True 
 B)False

Question 19

Most of the world's population lives in

Accepted Answer

A)  North America.
B)  the DVCs.
C)  Western Europe.
D)  the IACs.E) B) and D)
F) B) and C)

Question 20

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

Exam 22: The Economics of Developing Countries

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

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The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

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Which of the following is not a characteristic of human resources in the poorest DVCs?

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Which of the following is considered to be a severe obstacle to economic growth for DVCs?

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

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One reason why foreign aid is viewed as harmful is that it promotes dependency.

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The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

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To be classified as a low-income developing country, annual per capita income in 2014 needed to be

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Which of the following is characteristic of DVCs?

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Most of the world's population lives in

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Population expansion can impede economic development for the following reasons except

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The industrially advanced countries (IACs) had an average per capita income in 2014 of around

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

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Which of the following would be an example of direct foreign investment in DVCs?

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Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC.If both nations realize a 4 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Correct AnswerverifiedShow Answer

Surplus agricultural labor in a developing nation usually means that there is

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

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Correct AnswerverifiedShow Answer

The primary function of the International Finance Corporation (IFC) is 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

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