Question 1

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.

Question 2

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

Accepted Answer

A) are concentrated in the public, rather than the private, sector. 
B) are concentrated in the private, rather than the public, sector. 
C) are concentrated in urban, rather than rural, areas. 
D) have emigrated from the DVCs to the IACs. 
A) are concentrated in the public, rather than the private, sector. 
B) are concentrated in the private, rather than the public, sector. 
C) are concentrated in urban, rather than rural, areas. 
D) have emigrated from the DVCs to the IACs.

Question 3

What is the immigration problem for DVCs?

Accepted Answer

A) Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers. 
B) Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers. 
C) Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers. 
D) Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers. 
A) Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers. 
B) Too many people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers. 
C) Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers. 
D) Too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the least productive DVC workers.

Question 4

The idea that a person's productive efforts and his or her economic rewards are unrelated

Accepted Answer

A) is the neocolonialism view of economic development. 
B) describes the vicious circle of poverty. 
C) is the surplus labor theory of economic development. 
D) is the capricious universe view. 
A) is the neocolonialism view of economic development. 
B) describes the vicious circle of poverty. 
C) is the surplus labor theory of economic development. 
D) is the capricious universe view.

Question 5

The World Bank seeks to

Accepted Answer

A) provide financial backing for the work of the International Monetary Fund. 
B) maintain stable exchange rates in the currencies of developing countries. 
C) assist developing countries in achieving economic growth. 
D) maximize its profits for its worldwide shareholders. 
A) provide financial backing for the work of the International Monetary Fund. 
B) maintain stable exchange rates in the currencies of developing countries. 
C) assist developing countries in achieving economic growth. 
D) maximize its profits for its worldwide shareholders.

Question 6

Most developing countries (DVCs) exhibit a low level of

Accepted Answer

A) illiteracy. 
B) population growth. 
C) life expectancy. 
D) infant mortality. 
A) illiteracy. 
B) population growth. 
C) life expectancy. 
D) infant mortality.

Question 7

One recommended policy that IACs could adopt to help DVCs is to recruit and hire skilled workers from DVCs for businesses in IACs.

Accepted Answer

A) True 
 B)False

Question 8

The "vicious circle of poverty" for developing nations can best be described by

Accepted Answer

A) low levels of international trade that reduce exports and increase the dependence on imports. 
B) low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income. 
C) a large government sector, which reduces the availability of private investment spending but increases macroeconomic stability. 
D) a lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses. 
A) low levels of international trade that reduce exports and increase the dependence on imports. 
B) low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income. 
C) a large government sector, which reduces the availability of private investment spending but increases macroeconomic stability. 
D) a lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses.

Question 9

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

Accepted Answer

A) the infrastructure provided by government 
B) the abundance of entrepreneurs who need to be regulated 
C) the need to encourage saving and investment in the economy 
D) the provision of law and order so that commerce can flourish 
A) the infrastructure provided by government 
B) the abundance of entrepreneurs who need to be regulated 
C) the need to encourage saving and investment in the economy 
D) the provision of law and order so that commerce can flourish

Question 10

In 2014, Wal-Mart's annual revenues were greater than the national incomes of

Accepted Answer

A) the United States. 
B) Germany. 
C) all but 26 nations. 
D) all nations except for the 5 largest ones. 
A) the United States. 
B) Germany. 
C) all but 26 nations. 
D) all nations except for the 5 largest ones.

Question 11

An example of direct foreign investment is

Accepted Answer

A) a U.S.bank granting a loan to a Guatemalan firm. 
B) General Motors building an auto production facility in China. 
C) a U.S.government foreign aid grant to Bangladesh. 
D) the purchase of debt issued by the Panamanian government. 
A) a U.S.bank granting a loan to a Guatemalan firm. 
B) General Motors building an auto production facility in China. 
C) a U.S.government foreign aid grant to Bangladesh. 
D) the purchase of debt issued by the Panamanian government.

Question 12

An obstacle to economic growth in developing countries is

Accepted Answer

A) the limited demand for natural resources. 
B) the limited supply of capital goods. 
C) a decline in population growth. 
D) the low productivity of capital. 
A) the limited demand for natural resources. 
B) the limited supply of capital goods. 
C) a decline in population growth. 
D) the low productivity of capital.

Question 13

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Accepted Answer

A) a lack of infrastructure. 
B) rigid law enforcement in the country. 
C) excessive local entrepreneurship. 
D) all these reasons. 
A) a lack of infrastructure. 
B) rigid law enforcement in the country. 
C) excessive local entrepreneurship. 
D) all these reasons.

Question 14

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015)?

Accepted Answer

A) the United States 
B) Norway 
C) Sweden 
D) Netherlands 
A) the United States 
B) Norway 
C) Sweden 
D) Netherlands

Question 15

One of the essential paths to economic growth is

Accepted Answer

A) increasing population growth. 
B) expanding the role of government. 
C) using existing resources more efficiently. 
D) expanding tax credits for business investment. 
A) increasing population growth. 
B) expanding the role of government. 
C) using existing resources more efficiently. 
D) expanding tax credits for business investment.

Question 16

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

Accepted Answer

A) True 
 B)False

Question 17

For DVC per capita incomes to rise, birth rates must first be reduced.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 18

Developing countries (DVCs) can be subdivided into the following groups except

Accepted Answer

A) low-income economies. 
B) high-income economies. 
C) lower-middle-income economies. 
D) upper-middle-income economies. 
A) low-income economies. 
B) high-income economies. 
C) lower-middle-income economies. 
D) upper-middle-income economies.

Question 19

The lack of an entrepreneurial class in developing nations tends to

Accepted Answer

A) keep workers from migrating to cities from rural areas. 
B) reduce the level of capital investment. 
C) force the need for land reform. 
D) keep governments stable. 
A) keep workers from migrating to cities from rural areas. 
B) reduce the level of capital investment. 
C) force the need for land reform. 
D) keep governments stable.

Question 20

One of the major objectives of the World Bank is to

Accepted Answer

A) provide financial backing for the United Nations. 
B) maximize its profits for its worldwide shareholders. 
C) provide technical assistance to DVCs. 
D) maintain stable exchange rates in IACs and DVCs. 
A) provide financial backing for the United Nations. 
B) maximize its profits for its worldwide shareholders. 
C) provide technical assistance to DVCs. 
D) maintain stable exchange rates in IACs and DVCs.

Exam 42: The Economics of Developing Countries

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

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

What is the immigration problem for DVCs?

The idea that a person's productive efforts and his or her economic rewards are unrelated

The World Bank seeks to

Most developing countries (DVCs) exhibit a low level of

One recommended policy that IACs could adopt to help DVCs is to recruit and hire skilled workers from DVCs for businesses in IACs.

The "vicious circle of poverty" for developing nations can best be described by

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

In 2014, Wal-Mart's annual revenues were greater than the national incomes of

An example of direct foreign investment is

An obstacle to economic growth in developing countries is

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015)?

One of the essential paths to economic growth is

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

For DVC per capita incomes to rise, birth rates must first be reduced.This statement describes the

Developing countries (DVCs) can be subdivided into the following groups except

The lack of an entrepreneurial class in developing nations tends to

One of the major objectives of the World Bank is to

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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