Question 1

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

Accepted Answer

A)  the technologies of the IACs are frequently based on relatively expensive labor and relatively abundant capital.
B)  the resource endowments of the IACs and the DVCs are highly similar.
C)  international patent laws prohibit such transfers.
D)  the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital.E) B) and C)
F) A) and D)

Question 2

The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

Accepted Answer

A) True 
 B)False

Question 3

In recent years, many DVCs have come to realize that

Accepted Answer

A)  expanded international trade is harmful to DVCs.
B)  private capital investment is essential for economic growth in DVCs.
C)  the International Monetary Fund is the major institutional barrier to economic growth.
D)  government involvement in economic development is the only avenue for economic growth.E) B) and C)
F) A) and C)

Question 4

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 the per-capita-income gap one year later will be

Accepted Answer

A)  $27,540.
B)  $540.
C)  $27,000.
D)  $32,400.E) All of the above
F) A) and B)

Question 5

Which of the following is not part of a nation's infrastructure?

Accepted Answer

A)  communications facilities
B)  roads, highways, and bridges
C)  the electrical power system
D)  industrial plants and equipmentE) B) and C)
F) C) and D)

Question 6

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

Question 7

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

Accepted Answer

A) True 
 B)False

Question 8

If IACs admit more temporary workers from DVCs, will it help DVCs? Explain.

Accepted Answer

Some economists recommend that the IACs ...

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

Question 10

The United States in 2017 had about

Accepted Answer

A)  1.8 percent of the world's population and generated about 10 percent of the world's output.
B)  2.4 percent of the world's population and generated about 20 percent of the world's output.
C)  4.4 percent of the world's population and generated about 24 percent of the world's output.
D)  10 percent of the world's population and generated about 30 percent of the world's output.E) None of the above
F) A) and C)

Question 11

The demographic transition view of population and growth in DVCs is that

Accepted Answer

A)  the most important factor affecting population growth in DVCs is demographic changes among the elderly.
B)  slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations.
C)  reduced birth rates must come first in DVCs, and then higher per capita incomes will follow.
D)  higher per capita incomes must come first in DVCs, and then reduced birth rates will follow.E) B) and C)
F) A) and D)

Question 12

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 13

Assume that the real output of a developing nation increases from $120 billion to $140 billion, while its population expands from 100 to 110 million. As a result, real income per capita has increased by about

Accepted Answer

A)  $56 per person.
B)  $64 per person.
C)  $72 per person.
D)  $88 per person.E) C) and D)
F) B) and C)

Question 14

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

Question 15

The basic role of the International Finance Corporation is to

Accepted Answer

A)  make loans to governments in developing nations.
B)  invest in private enterprises in developing nations.
C)  finance exports from the United States to developing nations.
D)  make loans to the World Bank, which in turn makes loans to governments in developing nations.E) A) and C)
F) None of the above

Question 16

Many of the major projects of the World Bank have been for

Accepted Answer

A)  making loans to private citizens.
B)  building infrastructure in a nation.
C)  supervising the banking system in DVCs.
D)  establishing new tax systems for governments in DVCs.E) A) and D)
F) B) and C)

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

Question 18

Define "developing countries."

Accepted Answer

Developing countries are the many countr...

Question 19

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 B)

Question 20

The populations of the developing nations are growing

Accepted Answer

A)  at about 5 percent per year.
B)  at about the same rate as those of the industrially advanced nations.
C)  slower than those of the industrially advanced nations.
D)  faster than those of the industrially advanced nations.E) A) and C)
F) A) and B)

Exam 28: The Economics of Developing Countries

The basic role of the International Finance Corporation is to

Correct AnswerverifiedShow Answer

If IACs admit more temporary workers from DVCs, will it help DVCs? Explain.

Correct AnswerverifiedSome economists recommend that the IACs ...View AnswerShow Answer

In recent years, many DVCs have come to realize that

Correct AnswerverifiedShow Answer

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

Correct AnswerverifiedShow Answer

Investment in-kind refers to the possibility that

Correct AnswerverifiedShow Answer

Assume that the real output of a developing nation increases from $120 billion to $140 billion, while its population expands from 100 to 110 million. As a result, real income per capita has increased by about

Correct AnswerverifiedShow Answer

The demographic transition view of population and growth in DVCs is that

Correct AnswerverifiedShow Answer

Define "developing countries."

Correct AnswerverifiedDeveloping countries are the many countr...View AnswerShow Answer

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

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

Which of the following is not part of a nation's infrastructure?

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The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

Correct AnswerverifiedShow Answer

The United States in 2017 had about

Correct AnswerverifiedShow Answer

Many of the major projects of the World Bank have been for

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

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

Correct AnswerverifiedShow Answer

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 the per-capita-income gap one year later will be

Correct AnswerverifiedShow Answer

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

Correct AnswerverifiedShow Answer

The populations of the developing nations are growing

Correct AnswerverifiedShow Answer

An obstacle to economic growth in developing countries is

Correct AnswerverifiedShow Answer

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Some economists recommend that the IACs ...
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Developing countries are the many countr...
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