Question 1

Which of the following is not a characteristic of human resources in the poorest DVCs?

Accepted Answer

A) Populations are large. 
B) Unemployment and underemployment are widespread. 
C) Population growth is low. 
D) Labor productivity is low. 
A) Populations are large. 
B) Unemployment and underemployment are widespread. 
C) Population growth is low. 
D) Labor productivity is low.

Question 2

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

Accepted Answer

A) True 
 B)False

Question 3

The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

Accepted Answer

A) True 
 B)False

Question 4

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 5

An IAC (industrially advanced country)had a per capita income of $28,200, while a DVC (developing country)had a per capita income of $1,200 in a given year. If both countries experience a per-capita-income growth of 2 percent, then the per-capita-income gap one year later will be

Accepted Answer

A) $27,540. 
B) $540. 
C) $27,000. 
D) $32,400. 
A) $27,540. 
B) $540. 
C) $27,000. 
D) $32,400.

Question 6

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 abundant 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 abundant 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.

Question 7

Define "developing countries."

Accepted Answer

Developing countries are the many countr

Question 8

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Accepted Answer

A) admitting more temporary workers from DVCs 
B) reducing the amount of debt relief for DVCs to make them less dependent 
C) eliminating loans from the World Bank because it encourages bureaucracy 
D) eliminating financial control of central banks where they have been established 
A) admitting more temporary workers from DVCs 
B) reducing the amount of debt relief for DVCs to make them less dependent 
C) eliminating loans from the World Bank because it encourages bureaucracy 
D) eliminating financial control of central banks where they have been established

Question 9

Investment in-kind refers to the possibility that

Accepted Answer

A) DVCs will invest for the purpose of becoming less dependent on world markets. 
B) a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program. 
C) newly established manufacturing firms may expand by reinvesting their profits. 
D) surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams. 
A) DVCs will invest for the purpose of becoming less dependent on world markets. 
B) a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program. 
C) newly established manufacturing firms may expand by reinvesting their profits. 
D) surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams.

Question 10

The United States in 2017 had about

Accepted Answer

A) 1.8 percent of the world's population and generated about 10 percent of the world's output. 
B) 2.4 percent of the world's population and generated about 20 percent of the world's output. 
C) 4.4 percent of the world's population and generated about 24 percent of the world's output. 
D) 10 percent of the world's population and generated about 30 percent of the world's output. 
A) 1.8 percent of the world's population and generated about 10 percent of the world's output. 
B) 2.4 percent of the world's population and generated about 20 percent of the world's output. 
C) 4.4 percent of the world's population and generated about 24 percent of the world's output. 
D) 10 percent of the world's population and generated about 30 percent of the world's output.

Question 11

If IACs admit more temporary workers from DVCs, will it help DVCs? Explain.

Accepted Answer

Some economists recommend that the IACs

Question 12

Which of the following is not part of a nation's infrastructure?

Accepted Answer

A) communications facilities 
B) roads, highways, and bridges 
C) the electrical power system 
D) industrial plants and equipment 
A) communications facilities 
B) roads, highways, and bridges 
C) the electrical power system 
D) industrial plants and equipment

Question 13

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 14

The international agency that lends money to DVCs for economic development projects is the

Accepted Answer

A) World Bank. 
B) International Monetary Fund (IMF). 
C) World Trade Organization (WTO). 
D) World Credit Union. 
A) World Bank. 
B) International Monetary Fund (IMF). 
C) World Trade Organization (WTO). 
D) World Credit Union.

Question 15

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 16

In recent years, many DVCs have come to realize that

Accepted Answer

A) expanded international trade is harmful to DVCs. 
B) private capital investment is essential for economic growth in DVCs. 
C) the International Monetary Fund is the major institutional barrier to economic growth. 
D) government involvement in economic development is the only avenue for economic growth. 
A) expanded international trade is harmful to DVCs. 
B) private capital investment is essential for economic growth in DVCs. 
C) the International Monetary Fund is the major institutional barrier to economic growth. 
D) government involvement in economic development is the only avenue for economic growth.

Question 17

The populations of the developing nations are growing

Accepted Answer

A) at about 5 percent per year. 
B) at about the same rate as those of the industrially advanced nations. 
C) slower than those of the industrially advanced nations. 
D) faster than those of the industrially advanced nations. 
A) at about 5 percent per year. 
B) at about the same rate as those of the industrially advanced nations. 
C) slower than those of the industrially advanced nations. 
D) faster than those of the industrially advanced nations.

Question 18

The demographic transition view of population and growth in DVCs is that

Accepted Answer

A) the most important factor affecting population growth in DVCs is demographic changes among the elderly. 
B) slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations. 
C) reduced birth rates must come first in DVCs, and then higher per capita incomes will follow. 
D) higher per capita incomes must come first in DVCs, and then reduced birth rates will follow. 
A) the most important factor affecting population growth in DVCs is demographic changes among the elderly. 
B) slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations. 
C) reduced birth rates must come first in DVCs, and then higher per capita incomes will follow. 
D) higher per capita incomes must come first in DVCs, and then reduced birth rates will follow.

Question 19

The basic role of the International Finance Corporation is to

Accepted Answer

A) make loans to governments in developing nations. 
B) invest in private enterprises in developing nations. 
C) finance exports from the United States to developing nations. 
D) make loans to the World Bank, which in turn makes loans to governments in developing nations. 
A) make loans to governments in developing nations. 
B) invest in private enterprises in developing nations. 
C) finance exports from the United States to developing nations. 
D) make loans to the World Bank, which in turn makes loans to governments in developing nations.

Question 20

Assume that the real output of a developing nation increases from $120 billion to $140 billion, while its population expands from 100 to 110 million. As a result, real income per capita has increased by about

Accepted Answer

A) $56 per person. 
B) $64 per person. 
C) $72 per person. 
D) $88 per person. 
A) $56 per person. 
B) $64 per person. 
C) $72 per person. 
D) $88 per person.

Exam 28: The Economics of Developing Countries

Which of the following is not a characteristic of human resources in the poorest DVCs?

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

An obstacle to economic growth in developing countries is

An IAC (industrially advanced country)had a per capita income of $28,200, while a DVC (developing country)had a per capita income of $1,200 in a given year. If both countries experience a per-capita-income growth of 2 percent, then the per-capita-income gap one year later will be

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

Define "developing countries."

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Investment in-kind refers to the possibility that

The United States in 2017 had about

If IACs admit more temporary workers from DVCs, will it help DVCs? Explain.

Which of the following is not part of a nation's infrastructure?

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

The international agency that lends money to DVCs for economic development projects is the

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

In recent years, many DVCs have come to realize that

The populations of the developing nations are growing

The demographic transition view of population and growth in DVCs is that

The basic role of the International Finance Corporation is to

Assume that the real output of a developing nation increases from $120 billion to $140 billion, while its population expands from 100 to 110 million. As a result, real income per capita has increased by about

Limits, Alternatives, and Choices

The Market System and the Circular Flow

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Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

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Pure Competition in the Short Run

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The Demand for Resources

Wage Determination

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Income Inequality, Poverty, and Discrimination

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