Question 1

Which of the following can be a barrier to an LDC's economic growth and development?

Accepted Answer

A)  Low population growth. 
B)  A low level of human capital. 
C)  Faster capital accumulation. 
D)  More infrastructure. 
A)  Low population growth. 
B)  A low level of human capital. 
C)  Faster capital accumulation. 
D)  More infrastructure.

Question 2

The economies of most less-developed countries (LDCs) are based on:

Accepted Answer

A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil. 
A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil.

Question 3

Total GDP is the best way to identify a less-developed country

Accepted Answer

A) True 
 B)False

Question 4

Economic development encompasses which of the following measures?

Accepted Answer

A)  Distribution of income. 
B)  Legal system. 
C)  Transportation structures. 
D)  All of these. 
A)  Distribution of income. 
B)  Legal system. 
C)  Transportation structures. 
D)  All of these.

Question 5

Compared to IACs, LDCs are often characterized by:

Accepted Answer

A)  higher life expectancy. 
B)  higher adult literacy rates. 
C)  higher daily calorie supply. 
D)  lower per capita energy consumption. 
A)  higher life expectancy. 
B)  higher adult literacy rates. 
C)  higher daily calorie supply. 
D)  lower per capita energy consumption.

Question 6

Which of the following statements draws a false conclusion?

Accepted Answer

A)  Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. 
B)  Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. 
C)  Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. 
D)  Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP. 
E)  The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty. 
A)  Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. 
B)  Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. 
C)  Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. 
D)  Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP. 
E)  The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty.

Question 7

When a nation's political environment is more favorable, it will:

Accepted Answer

A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of these. 
A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of these.

Question 8

If a country's population grows at the same rate as its real GDP, then real per capita GDP:

Accepted Answer

A)  grows at an increasing rate. 
B)  grows at a constant rate. 
C)  doesn't change. 
D)  decreases at a decreasing rate. 
E)  decreases at a constant rate. 
A)  grows at an increasing rate. 
B)  grows at a constant rate. 
C)  doesn't change. 
D)  decreases at a decreasing rate. 
E)  decreases at a constant rate.

Question 9

In order for Ethiopia to increase its future economic growth, it must choose a point that is:

Accepted Answer

A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve. 
A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve.

Question 10

Which of the following would be most likely to improve the standard of living of a less-developed country?

Accepted Answer

A)  Development of strong labor unions. 
B)  More foreign investment, attracted by the expectation of economic and political stability. 
C)  Adoption of trade barriers (higher tariffs and quotas). 
D)  Widespread use of price controls to allocate goods and resources. 
A)  Development of strong labor unions. 
B)  More foreign investment, attracted by the expectation of economic and political stability. 
C)  Adoption of trade barriers (higher tariffs and quotas). 
D)  Widespread use of price controls to allocate goods and resources.

Question 11

Which of the following is not generally considered to be an ingredient for economic growth?

Accepted Answer

A)  Investment in human capital. 
B)  Political instability. 
C)  High savings rate and investment in capital. 
D)  Growth in technology. 
E)  Investment in infrastructure. 
A)  Investment in human capital. 
B)  Political instability. 
C)  High savings rate and investment in capital. 
D)  Growth in technology. 
E)  Investment in infrastructure.

Question 12

Which of the following is infrastructure?

Accepted Answer

A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of these. 
A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of these.

Question 13

According to the text, Ireland and Israel are classified as less developed countries (LDCs).

Accepted Answer

A) True 
 B)False

Question 14

Less-developed countries are poor for all of the following reasons except one. Which one?

Accepted Answer

A)  They do not produce many goods and services. 
B)  Labor productivity is low. 
C)  Investment funds tend to flow abroad 
D)  Investment in human capital is very low. 
E)  The labor force is too small. 
A)  They do not produce many goods and services. 
B)  Labor productivity is low. 
C)  Investment funds tend to flow abroad 
D)  Investment in human capital is very low. 
E)  The labor force is too small.

Question 15

Which of the following makes long-term low-interest loans to LDCs?

Accepted Answer

A)  Agency for International Development (AI
D) . 
B)  World Bank. 
C)  International Monetary Fund (IMF). 
D)  New International Economic Order (NIEO). 
A)  Agency for International Development (AI
D) . 
B)  World Bank. 
C)  International Monetary Fund (IMF). 
D)  New International Economic Order (NIEO).

Question 16

"Countries are poor because they cannot afford to save and invest" is called the:

Accepted Answer

A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit. 
A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit.

Question 17

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Accepted Answer

A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland. 
A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland.

Question 18

Which of the following does not hinder economic development?

Accepted Answer

A)  Lack of education 
B)  Poor agricultural productivity 
C)  Low investment in human capital 
D)  Lack of technology 
E)  Good nutrition 
A)  Lack of education 
B)  Poor agricultural productivity 
C)  Low investment in human capital 
D)  Lack of technology 
E)  Good nutrition

Question 19

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.

Accepted Answer

A) True 
 B)False

Question 20

The nation of Exland is considered a less-developed country and has the following characteristics. Which one is not typical of a less-developed country?

Accepted Answer

A)  High illiteracy. 
B)  High unemployment. 
C)  Rapid growth of technology. 
D)  Low growth in technology. 
E)  Rapid population growth. 
A)  High illiteracy. 
B)  High unemployment. 
C)  Rapid growth of technology. 
D)  Low growth in technology. 
E)  Rapid population growth.

Which of the following can be a barrier to an LDC's economic growth and development?

The economies of most less-developed countries (LDCs) are based on:

Total GDP is the best way to identify a less-developed country

Economic development encompasses which of the following measures?

Compared to IACs, LDCs are often characterized by:

Which of the following statements draws a false conclusion?

When a nation's political environment is more favorable, it will:

If a country's population grows at the same rate as its real GDP, then real per capita GDP:

In order for Ethiopia to increase its future economic growth, it must choose a point that is:

Which of the following would be most likely to improve the standard of living of a less-developed country?

Which of the following is not generally considered to be an ingredient for economic growth?

Which of the following is infrastructure?

According to the text, Ireland and Israel are classified as less developed countries (LDCs).

Less-developed countries are poor for all of the following reasons except one. Which one?

Which of the following makes long-term low-interest loans to LDCs?

"Countries are poor because they cannot afford to save and invest" is called the:

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Which of the following does not hinder economic development?

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.

The nation of Exland is considered a less-developed country and has the following characteristics. Which one is not typical of a less-developed country?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Filters

Exam 17: Growth and the

Which of the following can be a barrier to an LDC's economic growth and development?

The economies of most less-developed countries (LDCs) are based on:

Total GDP is the best way to identify a less-developed country

Economic development encompasses which of the following measures?

Compared to IACs, LDCs are often characterized by:

Which of the following statements draws a false conclusion?

When a nation's political environment is more favorable, it will:

If a country's population grows at the same rate as its real GDP, then real per capita GDP:

In order for Ethiopia to increase its future economic growth, it must choose a point that is:

Which of the following would be most likely to improve the standard of living of a less-developed country?

Which of the following is not generally considered to be an ingredient for economic growth?

Which of the following is infrastructure?

According to the text, Ireland and Israel are classified as less developed countries (LDCs).

Less-developed countries are poor for all of the following reasons except one. Which one?

Which of the following makes long-term low-interest loans to LDCs?

"Countries are poor because they cannot afford to save and invest" is called the:

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Which of the following does not hinder economic development?

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.

The nation of Exland is considered a less-developed country and has the following characteristics. Which one is not typical of a less-developed country?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Filters