Question 1

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Accepted Answer

A) True 
 B)False

Question 2

Many of the major projects of the World Bank have been for

Accepted Answer

A) making loans to private citizens. 
B) building infrastructure in a nation. 
C) supervising the banking system in DVCs. 
D) establishing new tax systems for governments in DVCs. 
A) making loans to private citizens. 
B) building infrastructure in a nation. 
C) supervising the banking system in DVCs. 
D) establishing new tax systems for governments in DVCs.

Question 3

Approximately what percentage of the world's income is received by the poorest one-fifth of the world's population?

Accepted Answer

A) 2 
B) 5 
C) 7 
D) 10 
A) 2 
B) 5 
C) 7 
D) 10

Question 4

Which of the following countries had the highest population growth rate in 2013-2014?

Accepted Answer

A) United States 
B) Pakistan 
C) China 
D) Venezuela 
A) United States 
B) Pakistan 
C) China 
D) Venezuela

Question 5

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. 
A) capital flight. 
B) economic growth. 
C) underemployment. 
D) unemployment.

Question 6

What measure of economic development is used most often to classify nations as industrially advanced or as developing?

Accepted Answer

A) per capita income 
B) life expectancy at birth 
C) per capita energy consumption 
D) daily per capita calorie supply 
A) per capita income 
B) life expectancy at birth 
C) per capita energy consumption 
D) daily per capita calorie supply

Question 7

Economic growth in the DVCs might increase if IACs

Accepted Answer

A) reduce their tariffs and import quotas. 
B) encourage more immigration of highly skilled DVC workers. 
C) outlaw direct private investment abroad by IAC corporations. 
D) discourage capital flight to the DVCs. 
A) reduce their tariffs and import quotas. 
B) encourage more immigration of highly skilled DVC workers. 
C) outlaw direct private investment abroad by IAC corporations. 
D) discourage capital flight to the DVCs.

Question 8

Most of the DVCs find it difficult to accumulate capital goods because

Accepted Answer

A) the terms of trade prohibit the inflow of private capital from the advanced nations. 
B) it is very difficult to restrict consumption and thus to free resources for capital goods production. 
C) domestic monetary policies designed to achieve price stability result in low interest rates, thereby discouraging investment. 
D) investment is interest inelastic in DVCs. 
A) the terms of trade prohibit the inflow of private capital from the advanced nations. 
B) it is very difficult to restrict consumption and thus to free resources for capital goods production. 
C) domestic monetary policies designed to achieve price stability result in low interest rates, thereby discouraging investment. 
D) investment is interest inelastic in DVCs.

Question 9

In recent years, U.S.foreign aid has been

Accepted Answer

A) less than one-quarter of 1 percent of its output. 
B) about 1 percent of its output. 
C) about 3 percent of its output. 
D) about 5 percent of its output. 
A) less than one-quarter of 1 percent of its output. 
B) about 1 percent of its output. 
C) about 3 percent of its output. 
D) about 5 percent of its output.

Question 10

The DVCs are

Accepted Answer

A) located primarily in Northern Europe. 
B) located primarily in Western Europe. 
C) located primarily in Africa, Asia, and Latin America. 
D) more or less evenly distributed over the various continents. 
A) located primarily in Northern Europe. 
B) located primarily in Western Europe. 
C) located primarily in Africa, Asia, and Latin America. 
D) more or less evenly distributed over the various continents.

Question 11

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. 
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.

Question 12

Per capita incomes must first grow for birth rates to decline.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. 
A) human capital view of population growth. 
B) traditional view of population growth. 
C) capricious universe view. 
D) demographic transition view of population growth.

Question 13

Infrastructure is best illustrated by

Accepted Answer

A) business equipment and factories. 
B) agricultural machinery and tools. 
C) financial institutions. 
D) roads and bridges. 
A) business equipment and factories. 
B) agricultural machinery and tools. 
C) financial institutions. 
D) roads and bridges.

Question 14

Most economists agree that government efforts in economic development must be

Accepted Answer

A) employed to substitute for private efforts. 
B) designed to support private efforts. 
C) the sole driver of economic development. 
D) kept at a minimum because we can always rely on markets. 
A) employed to substitute for private efforts. 
B) designed to support private efforts. 
C) the sole driver of economic development. 
D) kept at a minimum because we can always rely on markets.

Question 15

Trade barriers that restrict imports from developing countries tend to be

Accepted Answer

A) highest in the capital goods and technology sectors of those economies. 
B) lowest in the labor-intensive manufacturing sectors of those economies. 
C) lowest for those products in which DVCs have a comparative advantage. 
D) highest for those products in which DVCs have a comparative advantage. 
A) highest in the capital goods and technology sectors of those economies. 
B) lowest in the labor-intensive manufacturing sectors of those economies. 
C) lowest for those products in which DVCs have a comparative advantage. 
D) highest for those products in which DVCs have a comparative advantage.

Question 16

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Accepted Answer

A) owned and managed by the public sector. 
B) distributed more equitably across business sectors. 
C) reallocated to export industries. 
D) used more efficiently. 
A) owned and managed by the public sector. 
B) distributed more equitably across business sectors. 
C) reallocated to export industries. 
D) used more efficiently.

Question 17

Which characteristic is most typical of human resources in developing nations?

Accepted Answer

A) a small population base 
B) low unemployment in urban areas 
C) low unemployment in rural areas 
D) high unemployment in urban areas 
A) a small population base 
B) low unemployment in urban areas 
C) low unemployment in rural areas 
D) high unemployment in urban areas

Question 18

The corruption and poor administration that are common to the public sectors of many DVCs suggest that government may not be very effective in promoting economic growth.

Accepted Answer

A) True 
 B)False

Question 19

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 20

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

Accepted Answer

A) the technologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital. 
B) the resource endowments of the IACs and the DVCs are highly similar. 
C) international patent laws prohibit such transfers. 
D) the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital. 
A) the technologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital. 
B) the resource endowments of the IACs and the DVCs are highly similar. 
C) international patent laws prohibit such transfers. 
D) the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital.

Exam 42: The Economics of Developing Countries

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Many of the major projects of the World Bank have been for

Approximately what percentage of the world's income is received by the poorest one-fifth of the world's population?

Which of the following countries had the highest population growth rate in 2013-2014?

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

What measure of economic development is used most often to classify nations as industrially advanced or as developing?

Economic growth in the DVCs might increase if IACs

Most of the DVCs find it difficult to accumulate capital goods because

In recent years, U.S.foreign aid has been

The DVCs are

Microcredit refers to

Per capita incomes must first grow for birth rates to decline.This statement describes the

Infrastructure is best illustrated by

Most economists agree that government efforts in economic development must be

Trade barriers that restrict imports from developing countries tend to be

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Which characteristic is most typical of human resources in developing nations?

The corruption and poor administration that are common to the public sectors of many DVCs suggest that government may not be very effective in promoting economic growth.

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

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

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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