Question 1

The government of a DVC may force the economy to save by deliberately causing inflation.This policy is undesirable because inflation may

Accepted Answer

A) distort investment away from productive facilities and toward luxury housing and precious metals. 
B) increase voluntary saving because the value of money is depreciating. 
C) contribute to a balance of trade surplus. 
D) entail all of these problems. 
A) distort investment away from productive facilities and toward luxury housing and precious metals. 
B) increase voluntary saving because the value of money is depreciating. 
C) contribute to a balance of trade surplus. 
D) entail all of these problems. A

Question 2

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. 
A) land reform. 
B) the brain drain. 
C) in-kind investment. 
D) a capital-using technological advance. C

Question 3

At the beginning of the year, one developing country (DVC) has a real income per capita of $800.In a developed country (IAC), the real income per capita is $30,000.Both countries experience a 4 percent growth rate for the year.At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

Accepted Answer

A) $30,368. 
B) $31,200. 
C) $30,120. 
D) $32,032. 
A) $30,368. 
B) $31,200. 
C) $30,120. 
D) $32,032. A

Question 4

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. 
A) foreign investment. 
B) international capital. 
C) foreign aid. 
D) international trade.

Question 5

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

A) True 
 B)False

Question 6

Which organization primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools?

Accepted Answer

A) the World Bank 
B) the New Economic Order 
C) the Federal Reserve System 
D) the Committee on Economic Development 
A) the World Bank 
B) the New Economic Order 
C) the Federal Reserve System 
D) the Committee on Economic Development

Question 7

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things.This statement refers to

Accepted Answer

A) in-kind investment. 
B) the capricious universe view. 
C) human capital investment. 
D) the will to develop. 
A) in-kind investment. 
B) the capricious universe view. 
C) human capital investment. 
D) the will to develop.

Question 8

The demographic transition concept suggests that

Accepted Answer

A) effective birth control is the primary prerequisite of DVC income growth. 
B) income growth must first occur before DVC birth rates will decline. 
C) children are economic assets in the IACs but economic liabilities in the DVCs. 
D) the IACs will have higher birth rates than the DVCs. 
A) effective birth control is the primary prerequisite of DVC income growth. 
B) income growth must first occur before DVC birth rates will decline. 
C) children are economic assets in the IACs but economic liabilities in the DVCs. 
D) the IACs will have higher birth rates than the DVCs.

Question 9

Population growth remains high in most DVCs

Accepted Answer

A) because religious and sociocultural considerations favor large families. 
B) because children may provide economic security for aging parents. 
C) because children provide agricultural labor in rural areas. 
D) for all of these reasons. 
A) because religious and sociocultural considerations favor large families. 
B) because children may provide economic security for aging parents. 
C) because children provide agricultural labor in rural areas. 
D) for all of these reasons.

Question 10

Which of the following DVC policies is not likely to increase DVC economic growth?

Accepted Answer

A) privatizing state industries 
B) controlling population growth 
C) restricting direct foreign investment from abroad 
D) building human capital 
A) privatizing state industries 
B) controlling population growth 
C) restricting direct foreign investment from abroad 
D) building human capital

Question 11

The exports of the DVCs consist largely of

Accepted Answer

A) high-technology goods. 
B) raw materials and farm products. 
C) manufactured goods. 
D) services and financial capital. 
A) high-technology goods. 
B) raw materials and farm products. 
C) manufactured goods. 
D) services and financial capital.

Question 12

(Last Word) Providing poor families with grants if they send their children to school and get proper medical care is known as

Accepted Answer

A) microcredit. 
B) in-kind transfers. 
C) unconditional cash transfers. 
D) conditional cash transfers. 
A) microcredit. 
B) in-kind transfers. 
C) unconditional cash transfers. 
D) conditional cash transfers.

Question 13

A major criticism of foreign aid to developing nations is that it

Accepted Answer

A) is capital saving rather than capital intensive. 
B) provides incentives for a brain drain. 
C) encourages corruption and misuse of funds. 
D) gives too much power and control to the International Monetary Fund. 
A) is capital saving rather than capital intensive. 
B) provides incentives for a brain drain. 
C) encourages corruption and misuse of funds. 
D) gives too much power and control to the International Monetary Fund.

Question 14

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is generally not an effective strategy to promote DVC growth?

Accepted Answer

A) microlending 
B) human capital development 
C) fighting wars against neighbors to obtain resources and stimulate aggregate demand through arms spending 
D) controlling inflation 
A) microlending 
B) human capital development 
C) fighting wars against neighbors to obtain resources and stimulate aggregate demand through arms spending 
D) controlling inflation

Question 16

Which of these sets of countries has the greatest degree of internal corruption as of 2015, according to Transparency International?

Accepted Answer

A) Somalia, Afghanistan, and North Korea 
B) Finland, Denmark, and New Zealand 
C) Spain, Greece, and Italy 
D) Mexico, China, and Russia 
A) Somalia, Afghanistan, and North Korea 
B) Finland, Denmark, and New Zealand 
C) Spain, Greece, and Italy 
D) Mexico, China, and Russia

Question 17

All developing countries suffer from a critical shortage of

Accepted Answer

A) land. 
B) population. 
C) capital goods. 
D) government regulation. 
A) land. 
B) population. 
C) capital goods. 
D) government regulation.

Question 18

The traditional view regarding population and growth in DVCs is that

Accepted Answer

A) the most important factor affecting population growth in DVCs is per capita consumption of energy. 
B) unemployment and underemployment are the major sources of population growth in DVCs. 
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. 
A) the most important factor affecting population growth in DVCs is per capita consumption of energy. 
B) unemployment and underemployment are the major sources of population growth in DVCs. 
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.

Question 19

A major complaint of DVCs about foreign aid from IACs is that it

Accepted Answer

A) is allocated just to the poorest nations. 
B) is equally borne by the donor nations. 
C) needs to be quantitatively larger for DVCs. 
D) takes too long a time to reach DVCs. 
A) is allocated just to the poorest nations. 
B) is equally borne by the donor nations. 
C) needs to be quantitatively larger for DVCs. 
D) takes too long a time to reach DVCs.

Question 20

The very poorest low-income DVCs typically have relatively

Accepted Answer

A) low rates of economic growth and relatively high rates of population growth. 
B) high rates of economic growth and relatively low rates of population growth. 
C) low rates of both population growth and economic growth. 
D) high rates of both population growth and economic growth. 
A) low rates of economic growth and relatively high rates of population growth. 
B) high rates of economic growth and relatively low rates of population growth. 
C) low rates of both population growth and economic growth. 
D) high rates of both population growth and economic growth.

Exam 22: The Economics of Developing Countries

The government of a DVC may force the economy to save by deliberately causing inflation.This policy is undesirable because inflation may

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

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

Most of the DVCs of the world are located in Western Europe.

Which organization primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools?

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things.This statement refers to

The demographic transition concept suggests that

Population growth remains high in most DVCs

Which of the following DVC policies is not likely to increase DVC economic growth?

The exports of the DVCs consist largely of

(Last Word) Providing poor families with grants if they send their children to school and get proper medical care is known as

A major criticism of foreign aid to developing nations is that it

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

Which of the following is generally not an effective strategy to promote DVC growth?

Which of these sets of countries has the greatest degree of internal corruption as of 2015, according to Transparency International?

All developing countries suffer from a critical shortage of

The traditional view regarding population and growth in DVCs is that

A major complaint of DVCs about foreign aid from IACs is that it

The very poorest low-income DVCs typically have relatively

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

B: Measuring the Economys Output

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

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