Question 1

A developing nation may not experience an increase in the average standard of living even if it increases its output of goods and services because of

Accepted Answer

A) land reform. 
B) population growth. 
C) underemployment and disguised unemployment. 
D) capital-saving technology. 
A) land reform. 
B) population growth. 
C) underemployment and disguised unemployment. 
D) capital-saving technology. B

Question 2

The role of government in fostering economic growth in DVCs has been criticized because

Accepted Answer

A) most governments operate as dictatorships. 
B) there is often poor administration and corruption in government. 
C) government is generally supportive of business at the expense of labor. 
D) governments have adopted the unpopular method of forced savings to stimulate investment. 
A) most governments operate as dictatorships. 
B) there is often poor administration and corruption in government. 
C) government is generally supportive of business at the expense of labor. 
D) governments have adopted the unpopular method of forced savings to stimulate investment. B

Question 3

Which of the following does not correlate positively with economic growth?

Accepted Answer

A) output per capita 
B) life expectancy 
C) the percentage of the population engaged in agriculture 
D) the literacy rate 
A) output per capita 
B) life expectancy 
C) the percentage of the population engaged in agriculture 
D) the literacy rate C

Question 4

Successful foreign aid programs

Accepted Answer

A) enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B) enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C) move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D) cause a DVC's exchange rate to depreciate. 
A) enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B) enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C) move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D) cause a DVC's exchange rate to depreciate.

Question 5

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

Accepted Answer

A) Cash transfers never worked, because the recipients just wasted the money on unproductive spending. 
B) These transfers have shown positive early results; the majority of the recipients spent the money as intended. 
C) Only conditional cash transfers worked.Unconditional cash transfers never worked. 
D) These cash transfers worked only if the aid providers frequently followed up on the recipients. 
A) Cash transfers never worked, because the recipients just wasted the money on unproductive spending. 
B) These transfers have shown positive early results; the majority of the recipients spent the money as intended. 
C) Only conditional cash transfers worked.Unconditional cash transfers never worked. 
D) These cash transfers worked only if the aid providers frequently followed up on the recipients.

Question 6

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

A) True 
 B)False

Question 7

Surplus agricultural labor in a developing nation usually means that there is

Accepted Answer

A) a caste system. 
B) widespread underemployment. 
C) immobility of labor resources. 
D) increased investment in agriculture. 
A) a caste system. 
B) widespread underemployment. 
C) immobility of labor resources. 
D) increased investment in agriculture.

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

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. 
A) Populations are large. 
B) Unemployment and underemployment are widespread. 
C) Population growth is low. 
D) Labor productivity is low.

Question 11

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 12

The vicious circle of poverty in the poorest DVCs can also be expressed as,

Accepted Answer

A) "The rich get richer, while the poor get poorer." 
B) "Fate dealt the poor nations a bad hand." 
C) "The poor nations stay poor because they are poor." 
D) "Historical developments have oppressed the poor nations' incomes." 
A) "The rich get richer, while the poor get poorer." 
B) "Fate dealt the poor nations a bad hand." 
C) "The poor nations stay poor because they are poor." 
D) "Historical developments have oppressed the poor nations' incomes."

Question 13

Saving is low in many DVCs primarily because income is very equally distributed.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

Accepted Answer

A) low trade barriers 
B) large international debts 
C) an increase in the rate of saving 
D) a slowing of population growth 
A) low trade barriers 
B) large international debts 
C) an increase in the rate of saving 
D) a slowing of population growth

Question 15

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. 
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.

Question 16

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Accepted Answer

A) 25 percent 
B) 50 percent 
C) 70 percent 
D) 90 percent 
A) 25 percent 
B) 50 percent 
C) 70 percent 
D) 90 percent

Question 17

When economists refer to capital flight, they are speaking of an

Accepted Answer

A) outflow of financial capital from a certain country. 
B) outflow of real capital from a certain country. 
C) outflow of financial and real capital from a certain country. 
D) outflow of human capital from a certain country. 
A) outflow of financial capital from a certain country. 
B) outflow of real capital from a certain country. 
C) outflow of financial and real capital from a certain country. 
D) outflow of human capital from a certain country.

Question 18

China is close to catching up with the United States in its standard of living as measured by per capita income.

Accepted Answer

A) True 
 B)False

Question 19

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 established 
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 established

Question 20

Most of the world's population lives in

Accepted Answer

A) North America. 
B) the DVCs. 
C) Western Europe. 
D) the IACs. 
A) North America. 
B) the DVCs. 
C) Western Europe. 
D) the IACs.

Exam 42: The Economics of Developing Countries

A developing nation may not experience an increase in the average standard of living even if it increases its output of goods and services because of

The role of government in fostering economic growth in DVCs has been criticized because

Which of the following does not correlate positively with economic growth?

Successful foreign aid programs

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Surplus agricultural labor in a developing nation usually means that there is

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

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

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

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.

The vicious circle of poverty in the poorest DVCs can also be expressed as,

Saving is low in many DVCs primarily because income is very equally distributed.

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

When economists refer to capital flight, they are speaking of an

China is close to catching up with the United States in its standard of living as measured by per capita income.

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Most of the world's population lives in

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

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