Question 1

To follow an outward-oriented strategy, a country that has scarce natural resources and abundant labor supplies should _____.

Accepted Answer

A)  export primary goods and import manufactured products 
B)  export manufactured goods and impose import restrictions on primary goods 
C)  export both primary and manufactured products 
D)  export primary goods and impose trade restrictions on manufactured goods 
E)  export manufactured products and import primary goods 
A)  export primary goods and import manufactured products 
B)  export manufactured goods and impose import restrictions on primary goods 
C)  export both primary and manufactured products 
D)  export primary goods and impose trade restrictions on manufactured goods 
E)  export manufactured products and import primary goods

Question 2

Corruption reduces growth most directly because governments invest in projects with low productivity.

Accepted Answer

A) True 
 B)False

Question 3

To have significant foreign direct investment, a developing country ought to have a stable system of property rights.

Accepted Answer

A) True 
 B)False

Question 4

International trade financing is dominated by:

Accepted Answer

A)  the U.S. Agency for International Development. 
B)  private export-import agencies. 
C)  the World Bank. 
D)  the IMF. 
E)  commercial bank syndicates. 
A)  the U.S. Agency for International Development. 
B)  private export-import agencies. 
C)  the World Bank. 
D)  the IMF. 
E)  commercial bank syndicates.

Question 5

Entrepreneurs are more likely to develop among minority groups that have been blocked from traditional high-paying jobs.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?

Accepted Answer

A)  The country can produce more wheat than any other nation. 
B)  The opportunity cost of producing wheat is lowest in the country. 
C)  The price of wheat is lowest in that country. 
D)  Domestic wheat is of the best quality in the world. 
E)  The country can produce only wheat. 
A)  The country can produce more wheat than any other nation. 
B)  The opportunity cost of producing wheat is lowest in the country. 
C)  The price of wheat is lowest in that country. 
D)  Domestic wheat is of the best quality in the world. 
E)  The country can produce only wheat.

Question 7

A country is strongly inward-oriented if exports are clearly discouraged by controls to isolate and protect the domestic market.

Accepted Answer

A) True 
 B)False

Question 8

For most Third World countries, the key source of capital accumulation is _____.

Accepted Answer

A)  internal debt 
B)  foreign direct investment 
C)  domestic business spending 
D)  domestic saving 
E)  foreign aid 
A)  internal debt 
B)  foreign direct investment 
C)  domestic business spending 
D)  domestic saving 
E)  foreign aid

Question 9

Which of the following is the most likely reason why immigrants in developing countries become entrepreneurs?

Accepted Answer

A)  They usually hold government positions. 
B)  They are more intelligent than the domestic population. 
C)  They are risk-averse. 
D)  They have skills and experience that are lacking in poor nations. 
E)  They quickly assimilate to their new environment. 
A)  They usually hold government positions. 
B)  They are more intelligent than the domestic population. 
C)  They are risk-averse. 
D)  They have skills and experience that are lacking in poor nations. 
E)  They quickly assimilate to their new environment.

Question 10

Which of the following is a primary product?

Accepted Answer

A)  Tomato sauce 
B)  Chocolate bars 
C)  Salt 
D)  Breakfast cereal 
E)  A desk 
A)  Tomato sauce 
B)  Chocolate bars 
C)  Salt 
D)  Breakfast cereal 
E)  A desk

Question 11

A country is strongly outward-oriented if there is less or no control on international trade.

Accepted Answer

A) True 
 B)False

Question 12

The predominant source of multilateral aid is:

Accepted Answer

A)  the European Community 
B)  the United Nations 
C)  the Agency for International Development 
D)  the World Bank 
E)  the British government 
A)  the European Community 
B)  the United Nations 
C)  the Agency for International Development 
D)  the World Bank 
E)  the British government

Question 13

As an effect of population growth, age dependency is:

Accepted Answer

A)  reduction in the amount of capital per worker, which lowers the productivity of labor. 
B)  shifts in government expenditures from the country's infrastructure to education and health care. 
C)  a large number of dependent children, whose consumption requirements lower the ability of the economy to save. 
D)  high mortality rates of middle-aged workers that reduces the average amount of investment spending. 
E)  survival of the elderly who are dependent on government welfare support. 
A)  reduction in the amount of capital per worker, which lowers the productivity of labor. 
B)  shifts in government expenditures from the country's infrastructure to education and health care. 
C)  a large number of dependent children, whose consumption requirements lower the ability of the economy to save. 
D)  high mortality rates of middle-aged workers that reduces the average amount of investment spending. 
E)  survival of the elderly who are dependent on government welfare support.

Question 14

Which of the following coordinates and plans foreign aid programs and expenditures in the United Sates?

Accepted Answer

A)  The Federal Reserve Board 
B)  The Federal Open Market Committee 
C)  The Agency for International Development 
D)  The Bureau of Economic Analysis 
E)  The U.S.Department of the Treasury 
A)  The Federal Reserve Board 
B)  The Federal Open Market Committee 
C)  The Agency for International Development 
D)  The Bureau of Economic Analysis 
E)  The U.S.Department of the Treasury

Question 15

Foreign aid that flows from one country to another is called multilateral aid.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following groups would be most adversely affected by food aid?

Accepted Answer

A)  Manufacturers in the country providing aid 
B)  Citizens in the country receiving aid 
C)  Government in the country receiving aid 
D)  Farmers in the country providing aid 
E)  Farmers in the country receiving aid 
A)  Manufacturers in the country providing aid 
B)  Citizens in the country receiving aid 
C)  Government in the country receiving aid 
D)  Farmers in the country providing aid 
E)  Farmers in the country receiving aid

Question 17

Societies in which _____ produce more entrepreneurs.

Accepted Answer

A)  the ratio of immigrants to the local population is high 
B)  culture supports individual achievement 
C)  individuals are self-interested 
D)  immigrants are allowed to hold government positions 
E)  immigrants are more intelligent than the local population 
A)  the ratio of immigrants to the local population is high 
B)  culture supports individual achievement 
C)  individuals are self-interested 
D)  immigrants are allowed to hold government positions 
E)  immigrants are more intelligent than the local population

Question 18

Less-developed countries are experiencing rapid population growth because _____.

Accepted Answer

A)  birthrates are rising at a slower rate than mortality rates 
B)  birthrates are falling while mortality rates are rising 
C)  both birthrates and mortality rates are falling 
D)  birthrates are rising while mortality rates are falling 
E)  birthrates are constant and mortality rates are rising 
A)  birthrates are rising at a slower rate than mortality rates 
B)  birthrates are falling while mortality rates are rising 
C)  both birthrates and mortality rates are falling 
D)  birthrates are rising while mortality rates are falling 
E)  birthrates are constant and mortality rates are rising

Question 19

Which of the following is considered a political obstacle to economic growth?

Accepted Answer

A)  Few government subsidies 
B)  Low foreign investment 
C)  Lack of entrepreneurial talent 
D)  Explosive population growth 
E)  Insecure property rights 
A)  Few government subsidies 
B)  Low foreign investment 
C)  Lack of entrepreneurial talent 
D)  Explosive population growth 
E)  Insecure property rights

Question 20

As of 2008, which of the following countries had a female literacy rate of less than 50%?

Accepted Answer

A)  India 
B)  Greece 
C)  Finland 
D)  Ethiopia 
E)  Namibia 
A)  India 
B)  Greece 
C)  Finland 
D)  Ethiopia 
E)  Namibia

Exam 17: Development Economics

To follow an outward-oriented strategy, a country that has scarce natural resources and abundant labor supplies should _____.

Corruption reduces growth most directly because governments invest in projects with low productivity.

To have significant foreign direct investment, a developing country ought to have a stable system of property rights.

International trade financing is dominated by:

Entrepreneurs are more likely to develop among minority groups that have been blocked from traditional high-paying jobs.

Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?

A country is strongly inward-oriented if exports are clearly discouraged by controls to isolate and protect the domestic market.

For most Third World countries, the key source of capital accumulation is _____.

Which of the following is the most likely reason why immigrants in developing countries become entrepreneurs?

Which of the following is a primary product?

A country is strongly outward-oriented if there is less or no control on international trade.

The predominant source of multilateral aid is:

As an effect of population growth, age dependency is:

Which of the following coordinates and plans foreign aid programs and expenditures in the United Sates?

Foreign aid that flows from one country to another is called multilateral aid.

Which of the following groups would be most adversely affected by food aid?

Societies in which _____ produce more entrepreneurs.

Less-developed countries are experiencing rapid population growth because _____.

Which of the following is considered a political obstacle to economic growth?

As of 2008, which of the following countries had a female literacy rate of less than 50%?

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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