Question 1

The economic development strategy aimed at exporting domestically manufactured goods is called:

Accepted Answer

A)  replacement strategy. 
B)  market-oriented strategy. 
C)  inward-oriented strategy. 
D)  outward-oriented strategy. 
E)  future-oriented strategy. 
A)  replacement strategy. 
B)  market-oriented strategy. 
C)  inward-oriented strategy. 
D)  outward-oriented strategy. 
E)  future-oriented strategy.

Question 2

Because of the absolutism concept of poverty, a poor family in the United States will fall within the same category as a poor family in Cuba.

Accepted Answer

A) True 
 B)False

Question 3

An inefficient manufacturing base is likely to result when:

Accepted Answer

A)  only those goods are produced in which the domestic economy has a comparative advantage. 
B)  a newly developing economy has no international trade controls. 
C)  competitive foreign imports are restricted. 
D)  the economy produces only those goods in which it has technical expertise. 
E)  producers compete solely on the basis of low cost. 
A)  only those goods are produced in which the domestic economy has a comparative advantage. 
B)  a newly developing economy has no international trade controls. 
C)  competitive foreign imports are restricted. 
D)  the economy produces only those goods in which it has technical expertise. 
E)  producers compete solely on the basis of low cost.

Question 4

While using an outward-oriented development strategy, the government in Taiwan did not make any attempt to stimulate exports.

Accepted Answer

A) True 
 B)False

Question 5

The primary objective of inward-oriented strategies is:

Accepted Answer

A)  to raise government revenue through tariffs and other import taxes. 
B)  to lower the domestic price of imports. 
C)  to replace imported manufactured goods with domestic goods. 
D)  to encourage imports through reduction of tariff and non-tariff barriers. 
E)  to encourage the production of those goods in which the country has a comparative advantage. 
A)  to raise government revenue through tariffs and other import taxes. 
B)  to lower the domestic price of imports. 
C)  to replace imported manufactured goods with domestic goods. 
D)  to encourage imports through reduction of tariff and non-tariff barriers. 
E)  to encourage the production of those goods in which the country has a comparative advantage.

Question 6

Foreign aid usually consists of funds loaned at high interest rates.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following sentences about the benefits of foreign investment is true?

Accepted Answer

A)  Foreign investment is invited only in labor-intensive industries. 
B)  The emphasis on capital-intensive industries is that foreign investment has more effect on employment in developing countries. 
C)  Most expenditures on research and development are made by the major developing countries. 
D)  The ability of foreign firms to utilize modern technology in a developing country depends on having a supply of engineers and technical personnel in the host country. 
E)  Foreign investment will improve balance of payments if the foreign investment is used to produce goods primarily for domestic consumption. 
A)  Foreign investment is invited only in labor-intensive industries. 
B)  The emphasis on capital-intensive industries is that foreign investment has more effect on employment in developing countries. 
C)  Most expenditures on research and development are made by the major developing countries. 
D)  The ability of foreign firms to utilize modern technology in a developing country depends on having a supply of engineers and technical personnel in the host country. 
E)  Foreign investment will improve balance of payments if the foreign investment is used to produce goods primarily for domestic consumption.

Question 8

Import substitution is the only strategy used by developing countries to develop their manufacturing industries.

Accepted Answer

A) True 
 B)False

Question 9

_____ is the purchase of securities, like stocks and bonds of foreign firms.

Accepted Answer

A)  Short selling 
B)  Foreign direct investment 
C)  Future contracts 
D)  Portfolio investment 
E)  Reverse trading 
A)  Short selling 
B)  Foreign direct investment 
C)  Future contracts 
D)  Portfolio investment 
E)  Reverse trading

Question 10

Which of the following is a common argument against allowing a foreign firm to operate a business in a developing country?

Accepted Answer

A)  The foreign firm may gain control over national resources. 
B)  Foreign productive expertise may outdistance domestic labor skills. 
C)  The foreign firm may increase domestic competition. 
D)  Technology may be transferred from industrial countries. 
E)  The foreign firm may reduce dependency on domestic imports. 
A)  The foreign firm may gain control over national resources. 
B)  Foreign productive expertise may outdistance domestic labor skills. 
C)  The foreign firm may increase domestic competition. 
D)  Technology may be transferred from industrial countries. 
E)  The foreign firm may reduce dependency on domestic imports.

Question 11

Which of the following is the least likely reason for the difficulty in measuring poverty across countries?

Accepted Answer

A)  Different currencies 
B)  Different customs 
C)  Different living arrangements 
D)  Different trade balances 
E)  Limited data 
A)  Different currencies 
B)  Different customs 
C)  Different living arrangements 
D)  Different trade balances 
E)  Limited data

Question 12

The deteriorating-terms-of-trade-argument is based on an assumption that the value of ____ will fall over time.

Accepted Answer

A)  labor inputs 
B)  capital inputs 
C)  technology 
D)  manufactured goods 
E)  primary products 
A)  labor inputs 
B)  capital inputs 
C)  technology 
D)  manufactured goods 
E)  primary products

Question 13

Inward-oriented development strategies focus on exports of goods and services.

Accepted Answer

A) True 
 B)False

Question 14

The host country's balance-of-payments problem tends to worsen when foreign firms:

Accepted Answer

A)  invest solely in capital-intensive industries. 
B)  repatriate their profits to the headquarters from the host country. 
C)  acquire the foreign operations in order to diversify corporate investment holdings. 
D)  refuse to share technological expertise with the host country. 
E)  export all products to other countries. 
A)  invest solely in capital-intensive industries. 
B)  repatriate their profits to the headquarters from the host country. 
C)  acquire the foreign operations in order to diversify corporate investment holdings. 
D)  refuse to share technological expertise with the host country. 
E)  export all products to other countries.

Question 15

Higher per capita GNP always means higher quality of life.

Accepted Answer

A) True 
 B)False

Question 16

Poverty is usually defined by economists in relative terms.

Accepted Answer

A) True 
 B)False

Question 17

What is a recommended strategy to increase productivity of the private sector?

Accepted Answer

A)  A reduction in government subsidies to producers 
B)  An increase in business taxes 
C)  An increase in government investment in risky projects 
D)  An increase in the money supply 
E)  An increase in subsidy on goods and services 
A)  A reduction in government subsidies to producers 
B)  An increase in business taxes 
C)  An increase in government investment in risky projects 
D)  An increase in the money supply 
E)  An increase in subsidy on goods and services

Question 18

Which of the following is least likely to be included in a definition of basic human needs?

Accepted Answer

A)  A minimal level of clothing 
B)  A minimal level of health care 
C)  A minimal level of savings 
D)  A minimal level of shelter 
E)  A minimal level of calorie intake 
A)  A minimal level of clothing 
B)  A minimal level of health care 
C)  A minimal level of savings 
D)  A minimal level of shelter 
E)  A minimal level of calorie intake

Question 19

When a country follows an inward-oriented strategy, it tends to produce:

Accepted Answer

A)  only tertiary goods. 
B)  goods in which it has a comparative advantage. 
C)  only labor-intensive goods. 
D)  goods for which no export barriers exist. 
E)  goods that replace foreign manufactured products. 
A)  only tertiary goods. 
B)  goods in which it has a comparative advantage. 
C)  only labor-intensive goods. 
D)  goods for which no export barriers exist. 
E)  goods that replace foreign manufactured products.

Question 20

Proponents of inward-oriented policies ignore the fact that natural resources are exhaustible, so their long-run market value will fall.

Accepted Answer

A) True 
 B)False

Exam 17: Development Economics

The economic development strategy aimed at exporting domestically manufactured goods is called:

Because of the absolutism concept of poverty, a poor family in the United States will fall within the same category as a poor family in Cuba.

An inefficient manufacturing base is likely to result when:

While using an outward-oriented development strategy, the government in Taiwan did not make any attempt to stimulate exports.

The primary objective of inward-oriented strategies is:

Foreign aid usually consists of funds loaned at high interest rates.

Which of the following sentences about the benefits of foreign investment is true?

Import substitution is the only strategy used by developing countries to develop their manufacturing industries.

_____ is the purchase of securities, like stocks and bonds of foreign firms.

Which of the following is a common argument against allowing a foreign firm to operate a business in a developing country?

Which of the following is the least likely reason for the difficulty in measuring poverty across countries?

The deteriorating-terms-of-trade-argument is based on an assumption that the value of ____ will fall over time.

Inward-oriented development strategies focus on exports of goods and services.

The host country's balance-of-payments problem tends to worsen when foreign firms:

Higher per capita GNP always means higher quality of life.

Poverty is usually defined by economists in relative terms.

What is a recommended strategy to increase productivity of the private sector?

Which of the following is least likely to be included in a definition of basic human needs?

When a country follows an inward-oriented strategy, it tends to produce:

Proponents of inward-oriented policies ignore the fact that natural resources are exhaustible, so their long-run market value will fall.

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

Filters