Question 1

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

Question 2

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Accepted Answer

A) True 
 B)False

Question 3

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

Accepted Answer

A)  population growth for a greater labor supply.
B)  output and slow down their population growth.
C)  birth rates to expand their available resources.
D)  mortality rates to slow down their population growth.E) B) and C)
F) None of the above

Question 4

Microcredit refers to

Accepted Answer

A)  small-size stock markets with very limited capitalization.
B)  a system of providing credit to small-business owners.
C)  bond markets for governments of small nations.
D)  deposits in small banks in developing nations.E) None of the above
F) A) and B)

Question 5

One of the major investment obstacles in less-developed nations is

Accepted Answer

A)  an accumulation of savings with no place to invest the funds.
B)  a poor public infrastructure that hurts returns on private investment.
C)  a progressive tax system that is efficient in collecting taxes on investment.
D)  a low unemployment rate that makes it difficult to find the needed workers for businesses.E) A) and B)
F) B) and C)

Question 6

One way through which industrially advanced economies can help DVCs is known as "official development assistance (ODA) ," or more simply,

Accepted Answer

A)  foreign investment.
B)  international capital.
C)  foreign aid.
D)  international trade.E) None of the above
F) All of the above

Question 7

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

Question 8

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) None of the above

Question 9

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

Question 10

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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

Question 13

Which of the following is most characteristic of most developing nations?

Accepted Answer

A)  roughly equal distribution of income among the population
B)  high levels of labor productivity in agriculture
C)  low propensity to consume goods and services
D)  low levels of saving and investmentE) A) and B)
F) B) and C)

Question 14

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

Question 15

Japan is a nation that achieved a high standard of living despite having a very limited supply of natural resources.

Accepted Answer

A) True 
 B)False

Question 16

Government-provided foreign aid to developing countries

Accepted Answer

A)  has averaged about 1 percent of the IACs' GDP each year.
B)  has increased sharply and steadily since 1995.
C)  has dwarfed the size of foreign direct investment to the DVCs in recent years.
D)  declined in the late 1990s but increased from 2000 to 2008.E) B) and C)
F) None of the above

Question 17

Over the next 15 years, out of every 10 people added to the world's population will be born in developing countries.

Accepted Answer

A)  6
B)  7
C)  8
D)  9E) C) and D)
F) B) and D)

Question 18

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

Question 19

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

Accepted Answer

A) True 
 B)False

Question 20

Studies generally show that if there is more investment in capital goods in DVCs, there will be greater

Accepted Answer

A)  capital flight.
B)  economic growth.
C)  underemployment.
D)  unemployment.E) All of the above
F) B) and D)

Exam 19: The Economics of Developing Countries

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

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Correct AnswerverifiedShow Answer

Japan is a nation that achieved a high standard of living despite having a very limited supply of natural resources.

Correct AnswerverifiedShow Answer

An example of direct foreign investment is

Correct AnswerverifiedShow Answer

Studies generally show that if there is more investment in capital goods in DVCs, there will be greater

Correct AnswerverifiedShow Answer

One way through which industrially advanced economies can help DVCs is known as "official development assistance (ODA) ," or more simply,

Correct AnswerverifiedShow Answer

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Correct AnswerverifiedShow Answer

Which of the following is most characteristic of most developing nations?

Correct AnswerverifiedShow Answer

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

Correct AnswerverifiedShow Answer

One of the major investment obstacles in less-developed nations is

Correct AnswerverifiedShow Answer

Microcredit refers to

Correct AnswerverifiedShow Answer

Over the next 15 years, out of every 10 people added to the world's population will be born in developing countries.

Correct AnswerverifiedShow Answer

In recent years, many DVCs have come to realize that

Correct AnswerverifiedShow Answer

Government-provided foreign aid to developing countries

Correct AnswerverifiedShow Answer

Which of the following is characteristic of DVCs?

Correct AnswerverifiedShow Answer

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

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

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

Correct AnswerverifiedShow Answer

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