Question 1

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

Question 2

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

Question 3

For DVC per capita incomes to rise, birth rates must first be reduced.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 D)
F) A) and B)

Question 4

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 5

What is the immigration problem for DVCs?

Accepted Answer

A)  Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers.
B)  Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers.
C)  Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers.
D)  Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers.E) A) and C)
F) None of the above

Question 6

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015) ?

Accepted Answer

A)  the United States
B)  Norway
C)  Sweden
D)  NetherlandsE) B) and C)
F) None of the above

Question 7

An example of direct foreign investment is

Accepted Answer

A)  a U.S.bank granting a loan to a Guatemalan firm.
B)  General Motors building an auto production facility in China.
C)  a U.S.government foreign aid grant to Bangladesh.
D)  the purchase of debt issued by the Panamanian government.E) C) and D)
F) A) and D)

Question 8

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

Accepted Answer

A)  the infrastructure provided by government
B)  the abundance of entrepreneurs who need to be regulated
C)  the need to encourage saving and investment in the economy
D)  the provision of law and order so that commerce can flourishE) None of the above
F) B) and C)

Question 9

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

Accepted Answer

A) True 
 B)False

Question 10

Most developing countries (DVCs)  exhibit a low level of

Accepted Answer

A)  illiteracy.
B)  population growth.
C)  life expectancy.
D)  infant mortality.E) B) and D)
F) All of the above

Question 11

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 C)
F) A) and D)

Question 12

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Accepted Answer

A)  a lack of infrastructure.
B)  rigid law enforcement in the country.
C)  excessive local entrepreneurship.
D)  all these reasons.E) None of the above
F) All of the above

Question 13

The World Bank seeks to

Accepted Answer

A)  provide financial backing for the work of the International Monetary Fund.
B)  maintain stable exchange rates in the currencies of developing countries.
C)  assist developing countries in achieving economic growth.
D)  maximize its profits for its worldwide shareholders.E) B) and C)
F) A) and D)

Question 14

The "vicious circle of poverty" for developing nations can best be described by

Accepted Answer

A)  low levels of international trade that reduce exports and increase the dependence on imports.
B)  low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income.
C)  a large government sector, which reduces the availability of private investment spending but increases macroeconomic stability.
D)  a lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses.E) All of the above
F) C) and D)

Question 15

One of the essential paths to economic growth is

Accepted Answer

A)  increasing population growth.
B)  expanding the role of government.
C)  using existing resources more efficiently.
D)  expanding tax credits for business investment.E) A) and B)
F) A) and C)

Question 16

Developing countries (DVCs)  can be subdivided into the following groups except

Accepted Answer

A)  low-income economies.
B)  high-income economies.
C)  lower-middle-income economies.
D)  upper-middle-income economies.E) A) and D)
F) A) and C)

Question 17

In 2014, Wal-Mart's annual revenues were greater than the national incomes of

Accepted Answer

A)  the United States.
B)  Germany.
C)  all but 26 nations.
D)  all nations except for the 5 largest ones.E) None of the above
F) B) and C)

Question 18

One of the major objectives of the World Bank is to

Accepted Answer

A)  provide financial backing for the United Nations.
B)  maximize its profits for its worldwide shareholders.
C)  provide technical assistance to DVCs.
D)  maintain stable exchange rates in IACs and DVCs.E) A) and B)
F) All of the above

Question 19

The idea that a person's productive efforts and his or her economic rewards are unrelated

Accepted Answer

A)  is the neocolonialism view of economic development.
B)  describes the vicious circle of poverty.
C)  is the surplus labor theory of economic development.
D)  is the capricious universe view.E) None of the above
F) All of the above

Question 20

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

Exam 42: The Economics of Developing Countries

The World Bank seeks to

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One of the major objectives of the World Bank is to

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Most developing countries (DVCs) exhibit a low level of

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For DVC per capita incomes to rise, birth rates must first be reduced.This statement describes the

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Developing countries (DVCs) can be subdivided into the following groups except

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

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

The lack of an entrepreneurial class in developing nations tends to

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An example of direct foreign investment is

Correct AnswerverifiedShow Answer

One of the essential paths to economic growth is

Correct AnswerverifiedShow Answer

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

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Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

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Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015) ?

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The idea that a person's productive efforts and his or her economic rewards are unrelated

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The "vicious circle of poverty" for developing nations can best be described by

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A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Correct AnswerverifiedShow Answer

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

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What is the immigration problem for DVCs?

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An obstacle to economic growth in developing countries is

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In 2014, Wal-Mart's annual revenues were greater than the national incomes of

Correct AnswerverifiedShow Answer

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