Question 1

A firm should be transparent, meaning

Accepted Answer

A) the windows at headquarters should be cleaned regularly 
B) if executives lie during a stockholder meeting, people should be able to see right through them 
C) someone should be able to look at the books and the balance sheet and tell exactly what's going on 
D) None of the answers is correct 
E) All of the answers are correct 
A) the windows at headquarters should be cleaned regularly 
B) if executives lie during a stockholder meeting, people should be able to see right through them 
C) someone should be able to look at the books and the balance sheet and tell exactly what's going on 
D) None of the answers is correct 
E) All of the answers are correct

Question 2

If the country of Deficitland is experiencing trade deficits, they are more likely to cut imports of

Accepted Answer

A) beef 
B) cocoa 
C) coffee 
D) capital goods 
E) soybeans 
A) beef 
B) cocoa 
C) coffee 
D) capital goods 
E) soybeans

Question 3

The average value added per U.S.farm worker is about __________ times that of farm workers in low- and middle-income countries.

Accepted Answer

A) one half 
B) one 
C) ten 
D) seventy-five 
E) five hundred 
A) one half 
B) one 
C) ten 
D) seventy-five 
E) five hundred

Question 4

The yardstick most often used to compare living standards across nations is

Accepted Answer

A) average production cost per unit 
B) sales revenue per month 
C) utility per capita 
D) GDP per person 
E) imports per year 
A) average production cost per unit 
B) sales revenue per month 
C) utility per capita 
D) GDP per person 
E) imports per year

Question 5

The country of Bananaland has an abundant supply of banana trees and therefore must be a modern industrial economy.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is true?

Accepted Answer

A) In low-income countries, less than 5 percent of those 15 and older were illiterate in 2007 
B) In middle-income countries, 17 percent of those 15 and older were illiterate in 2007 
C) In high-income countries, 38 percent of those 15 and older were illiterate in 2007 
D) Education bears little relationship to economic development in high income countries 
E) Education is more important to the economic development of low income countries than it is to high income countries 
A) In low-income countries, less than 5 percent of those 15 and older were illiterate in 2007 
B) In middle-income countries, 17 percent of those 15 and older were illiterate in 2007 
C) In high-income countries, 38 percent of those 15 and older were illiterate in 2007 
D) Education bears little relationship to economic development in high income countries 
E) Education is more important to the economic development of low income countries than it is to high income countries

Question 7

When foreign aid is tied to purchases of low-priced food from the donor country, farm prices can drop in the developing countries, hurting poor farmers.

Accepted Answer

A) True 
 B)False

Question 8

A requirement for development is

Accepted Answer

A) an unreliable system of financial institutions 
B) a lack of saving by households and firms 
C) low confidence in domestic currency 
D) low and predictable inflation that encourages saving 
E) None of the answers is correct 
A) an unreliable system of financial institutions 
B) a lack of saving by households and firms 
C) low confidence in domestic currency 
D) low and predictable inflation that encourages saving 
E) None of the answers is correct

Question 9

Which of the following is a cause of higher birth rates in developing countries?

Accepted Answer

A) Children are viewed as a source of farm labor 
B) Children are viewed as economic and social security as the parents age 
C) Higher child mortality rates engender higher birth rates 
D) All the answers are correct 
E) None of the answers is correct 
A) Children are viewed as a source of farm labor 
B) Children are viewed as economic and social security as the parents age 
C) Higher child mortality rates engender higher birth rates 
D) All the answers are correct 
E) None of the answers is correct

Question 10

There is a tremendous range in productive performance around the world.

Accepted Answer

A) True 
 B)False

Question 11

In developing countries, it is not true that

Accepted Answer

A) banks are often viewed with suspicion 
B) at the first sign of economic problems, many bank depositors withdraw their funds 
C) because banks cannot rely on a continuous supply of deposits, banks cannot make loans for extended periods 
D) if financial institutions fail to serve as intermediaries between savers and borrowers, the lack of funds for investment will make growth rates double 
E) the credit provided by banks as a percent of total output is one fifth that in high-income countries 
A) banks are often viewed with suspicion 
B) at the first sign of economic problems, many bank depositors withdraw their funds 
C) because banks cannot rely on a continuous supply of deposits, banks cannot make loans for extended periods 
D) if financial institutions fail to serve as intermediaries between savers and borrowers, the lack of funds for investment will make growth rates double 
E) the credit provided by banks as a percent of total output is one fifth that in high-income countries

Question 12

Which of the following is true about GNP?

Accepted Answer

A) includes profits earned by a Mercedes factory in Alabama 
B) excludes profits earned by General Electric in India 
C) measures the market value of all goods and services produced by resources supplied the home country's residents and firms, regardless of the location of the resource 
D) stands for Generally Nice Products 
E) used by countries to classify the World Bank 
A) includes profits earned by a Mercedes factory in Alabama 
B) excludes profits earned by General Electric in India 
C) measures the market value of all goods and services produced by resources supplied the home country's residents and firms, regardless of the location of the resource 
D) stands for Generally Nice Products 
E) used by countries to classify the World Bank

Question 13

Privatizationis the process of turning government enterprises into private enterprises in transitional economies.

Accepted Answer

A) True 
 B)False

Question 14

Successful management of resource wealth is a poverty trap

Accepted Answer

A) True 
 B)False

Question 15

Imagine that the best and the brightest professionals of the planet Venus migrate to Earth to work.The upside of this brain drain is

Accepted Answer

A) the remittances sent home to Venus 
B) getting rid of snooty Venetians 
C) not being able to afford the modern machinery that will help the Venetians become more productive 
D) decreased labor supply on Venus 
E) increased income inequality on Venus 
A) the remittances sent home to Venus 
B) getting rid of snooty Venetians 
C) not being able to afford the modern machinery that will help the Venetians become more productive 
D) decreased labor supply on Venus 
E) increased income inequality on Venus

Question 16

A World Bank study suggest a strong link in Africa between governments that __________ special-interest groups and __________ rates of economic growth.

Accepted Answer

A) cater to, high 
B) cater to, moderate 
C) cater to, low 
D) ignore, low 
E) ignore, moderate 
A) cater to, high 
B) cater to, moderate 
C) cater to, low 
D) ignore, low 
E) ignore, moderate

Question 17

When a developing country relies on export promotion,

Accepted Answer

A) it concentrates on producing for its domestic market 
B) it builds its technological and educational base and then can make more complex products for export 
C) domestic producers have sufficient protection that they can afford to become inefficient 
D) its government must intervene more in markets 
E) None of the answers is correct 
A) it concentrates on producing for its domestic market 
B) it builds its technological and educational base and then can make more complex products for export 
C) domestic producers have sufficient protection that they can afford to become inefficient 
D) its government must intervene more in markets 
E) None of the answers is correct

Question 18

One of the reasons that import substitution is popular is that

Accepted Answer

A) there was never any demand for the products in question 
B) infant industries would have to compete against global rivals 
C) it benefits suppliers to the favored domestic industries 
D) it slows down the progression through the production chain 
E) the emphasis is on comparative advantage and trade expansion 
A) there was never any demand for the products in question 
B) infant industries would have to compete against global rivals 
C) it benefits suppliers to the favored domestic industries 
D) it slows down the progression through the production chain 
E) the emphasis is on comparative advantage and trade expansion

Question 19

Which of the following resources is necessary in order to combine efficiently the other resources to produce goods and services?

Accepted Answer

A) natural resources 
B) capital 
C) labor 
D) entrepreneurial ability 
E) financial institutions 
A) natural resources 
B) capital 
C) labor 
D) entrepreneurial ability 
E) financial institutions

Question 20

Which of the following is not an example of foreign aid?

Accepted Answer

A) U.S.discount department stores purchasing toys from Chinese manufacturers 
B) The International Monetary Fund extending loans to countries that have trouble with their balance of payments 
C) The World Bank providing loans and grants to support health and education programs 
D) The U.S.government paying to build an electricity plant in Albania 
E) The Australian government paying to repair highways in Tonga 
A) U.S.discount department stores purchasing toys from Chinese manufacturers 
B) The International Monetary Fund extending loans to countries that have trouble with their balance of payments 
C) The World Bank providing loans and grants to support health and education programs 
D) The U.S.government paying to build an electricity plant in Albania 
E) The Australian government paying to repair highways in Tonga

Exam 21: Economic Development

A firm should be transparent, meaning

If the country of Deficitland is experiencing trade deficits, they are more likely to cut imports of

The average value added per U.S.farm worker is about __________ times that of farm workers in low- and middle-income countries.

The yardstick most often used to compare living standards across nations is

The country of Bananaland has an abundant supply of banana trees and therefore must be a modern industrial economy.

Which of the following is true?

When foreign aid is tied to purchases of low-priced food from the donor country, farm prices can drop in the developing countries, hurting poor farmers.

A requirement for development is

Which of the following is a cause of higher birth rates in developing countries?

There is a tremendous range in productive performance around the world.

In developing countries, it is not true that

Which of the following is true about GNP?

Privatizationis the process of turning government enterprises into private enterprises in transitional economies.

Successful management of resource wealth is a poverty trap

Imagine that the best and the brightest professionals of the planet Venus migrate to Earth to work.The upside of this brain drain is

A World Bank study suggest a strong link in Africa between governments that __________ special-interest groups and __________ rates of economic growth.

When a developing country relies on export promotion,

One of the reasons that import substitution is popular is that

Which of the following resources is necessary in order to combine efficiently the other resources to produce goods and services?

Which of the following is not an example of foreign aid?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

A--Monopoly

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Filters

A World Bank study suggest a strong link in Africa between governments that special-interest groups and rates of economic growth.