Question 1

The capricious universe view indicates that

Accepted Answer

A) in the long run, "acts of God" have contained population growth and thus contributed to economic development. 
B) DVCs will obtain biological and chemical weapons and force the redistribution of world wealth. 
C) there is little or no correlation between one's efforts and the rewards he or she receives. 
D) international and civil wars have been the primary impediment to growth. 
A) in the long run, "acts of God" have contained population growth and thus contributed to economic development. 
B) DVCs will obtain biological and chemical weapons and force the redistribution of world wealth. 
C) there is little or no correlation between one's efforts and the rewards he or she receives. 
D) international and civil wars have been the primary impediment to growth.

Question 2

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Accepted Answer

A) diminishing returns may be encountered in increasing total output. 
B) population increases may dissipate the increase in real output. 
C) disguised unemployment in agriculture will persist. 
D) surplus farm labor may move from rural areas to industrial areas, causing unemployment. 
A) diminishing returns may be encountered in increasing total output. 
B) population increases may dissipate the increase in real output. 
C) disguised unemployment in agriculture will persist. 
D) surplus farm labor may move from rural areas to industrial areas, causing unemployment.

Question 3

Most nations of the world are now IACs, not middle- and low-income DVCs.

Accepted Answer

A) True 
 B)False

Question 4

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Accepted Answer

A) all sponsored by local governments. 
B) done through the United Nations. 
C) launched by universities and colleges. 
D) focused on giving direct aid to poor individuals. 
A) all sponsored by local governments. 
B) done through the United Nations. 
C) launched by universities and colleges. 
D) focused on giving direct aid to poor individuals.

Question 5

Which of the following is a true statement?

Accepted Answer

A) Direct foreign investment to DVCs is increasingly provided by commercial banks. 
B) Direct foreign investment to DVCs has dwindled to near zero in recent years. 
C) Approximately 5 percent of the GDP of IACs goes to foreign aid. 
D) Foreign aid from the IACs to the DVCs has greatly expanded in the past several years. 
A) Direct foreign investment to DVCs is increasingly provided by commercial banks. 
B) Direct foreign investment to DVCs has dwindled to near zero in recent years. 
C) Approximately 5 percent of the GDP of IACs goes to foreign aid. 
D) Foreign aid from the IACs to the DVCs has greatly expanded in the past several years.

Question 6

If a technological advance expands output and requires a smaller investment in capital goods, this technological advance

Accepted Answer

A) is capital-using. 
B) must involve nonfinancial investment. 
C) is capital-saving. 
D) must pertain to the infrastructure. 
A) is capital-using. 
B) must involve nonfinancial investment. 
C) is capital-saving. 
D) must pertain to the infrastructure.

Question 7

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells.This is an illustration of

Accepted Answer

A) foreign aid. 
B) capital-saving investment. 
C) in-kind investment. 
D) technological advance. 
A) foreign aid. 
B) capital-saving investment. 
C) in-kind investment. 
D) technological advance.

Question 8

The World Bank

Accepted Answer

A) is also known as the International Monetary Fund (IMF). 
B) lends money to developing nations for basic infrastructure projects such as dams, irrigation, health and sanitation, communications, and transportation. 
C) is an affiliate of the World Trade Organization (WTO). 
D) provides subsidies to private firms so they can improve their wages and working conditions. 
A) is also known as the International Monetary Fund (IMF). 
B) lends money to developing nations for basic infrastructure projects such as dams, irrigation, health and sanitation, communications, and transportation. 
C) is an affiliate of the World Trade Organization (WTO). 
D) provides subsidies to private firms so they can improve their wages and working conditions.

Question 9

All of the following contribute to low investment spending in DVCs except

Accepted Answer

A) low rates of saving. 
B) inadequacy of public capital goods (infrastructure). 
C) political instability. 
D) expensive labor. 
A) low rates of saving. 
B) inadequacy of public capital goods (infrastructure). 
C) political instability. 
D) expensive labor.

Question 10

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

A) shift outward the production possibilities curve for a nation. 
B) increase the demand for and decrease the supply of productive resources. 
C) make a nation less productive because of the need to coordinate the increased quantity of resources. 
D) lead to increased population growth that will decrease the per capita growth in a nation. 
A) shift outward the production possibilities curve for a nation. 
B) increase the demand for and decrease the supply of productive resources. 
C) make a nation less productive because of the need to coordinate the increased quantity of resources. 
D) lead to increased population growth that will decrease the per capita growth in a nation.

Question 11

The presence of large and fast-growing populations in developing countries contributes to lower per capita incomes.

Accepted Answer

A) True 
 B)False

Question 12

One common measure of the "standard of living" in a nation is

Accepted Answer

A) per capita real income. 
B) unemployment rate. 
C) real GDP. 
D) population size. 
A) per capita real income. 
B) unemployment rate. 
C) real GDP. 
D) population size.

Question 13

The demographic transition view of population growth argues that, on average (and as perceived by parents), the marginal

Accepted Answer

A) benefits of extra children are larger in IACs than in DVCs. 
B) costs of extra children are lower in IACs than in DVCs. 
C) costs of extra children are larger in IACs than in DVCs. 
D) benefits of extra children are the same in DVCs and IACs. 
A) benefits of extra children are larger in IACs than in DVCs. 
B) costs of extra children are lower in IACs than in DVCs. 
C) costs of extra children are larger in IACs than in DVCs. 
D) benefits of extra children are the same in DVCs and IACs.

Question 14

Capital flight from the DVCs may be caused by

Accepted Answer

A) a fear of government privatization efforts. 
B) slow domestic inflation. 
C) low rates of domestic taxation. 
D) risks of severe fluctuations in exchange rates. 
A) a fear of government privatization efforts. 
B) slow domestic inflation. 
C) low rates of domestic taxation. 
D) risks of severe fluctuations in exchange rates.

Question 15

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

Accepted Answer

A) True 
 B)False

Question 16

The poorest 20 percent of the world's population receive what percentage of world income?

Accepted Answer

A) less than 2 percent 
B) about 4 percent 
C) around 8 percent 
D) close to 10 percent 
A) less than 2 percent 
B) about 4 percent 
C) around 8 percent 
D) close to 10 percent

Question 17

Examples of low-income developing countries are

Accepted Answer

A) Switzerland, New Zealand, and Australia. 
B) Germany, Austria, and Italy. 
C) Chad, Bangladesh, and Ethiopia. 
D) Mexico, South Korea, and Brazil. 
A) Switzerland, New Zealand, and Australia. 
B) Germany, Austria, and Italy. 
C) Chad, Bangladesh, and Ethiopia. 
D) Mexico, South Korea, and Brazil.

Question 18

Many economists believe that the key to breaking the vicious circle of poverty is to

Accepted Answer

A) cut down the mortality rates in poor nations. 
B) reduce the birth rates in poor nations. 
C) increase the mobility of labor and migration. 
D) increase the rate of capital accumulation in poor nations. 
A) cut down the mortality rates in poor nations. 
B) reduce the birth rates in poor nations. 
C) increase the mobility of labor and migration. 
D) increase the rate of capital accumulation in poor nations.

Question 19

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

Accepted Answer

A) True 
 B)False

Question 20

An institutional change that is needed in most developing nations is

Accepted Answer

A) the will to develop. 
B) reduced foreign aid. 
C) birth control. 
D) land reform. 
A) the will to develop. 
B) reduced foreign aid. 
C) birth control. 
D) land reform.

Exam 42: The Economics of Developing Countries

The capricious universe view indicates that

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Most nations of the world are now IACs, not middle- and low-income DVCs.

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Which of the following is a true statement?

If a technological advance expands output and requires a smaller investment in capital goods, this technological advance

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells.This is an illustration of

The World Bank

All of the following contribute to low investment spending in DVCs except

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

The presence of large and fast-growing populations in developing countries contributes to lower per capita incomes.

One common measure of the "standard of living" in a nation is

The demographic transition view of population growth argues that, on average (and as perceived by parents), the marginal

Capital flight from the DVCs may be caused by

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

The poorest 20 percent of the world's population receive what percentage of world income?

Examples of low-income developing countries are

Many economists believe that the key to breaking the vicious circle of poverty is to

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

An institutional change that is needed in most developing nations is

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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