Question 1

Microcredit refers to

Accepted Answer

A) small-size stock markets with very limited capitalization. 
B) a system of providing credit to small-business owners. 
C) bond markets for governments of small nations. 
D) deposits in small banks in developing nations. 
A) small-size stock markets with very limited capitalization. 
B) a system of providing credit to small-business owners. 
C) bond markets for governments of small nations. 
D) deposits in small banks in developing nations.

Question 2

Early experiments with unconditional cash transfers have revealed that

Accepted Answer

A) most of these cash transfers are repaid within a very short time. 
B) although the money is usually spent on education and capital, cultural obstacles generally prevent this spending from translating into long-term earnings gains. 
C) a majority of recipients use the money for training and equipment that results in a higher long-term income. 
D) most recipients spend the money on current consumption and realize no long-term gain in earning power. 
A) most of these cash transfers are repaid within a very short time. 
B) although the money is usually spent on education and capital, cultural obstacles generally prevent this spending from translating into long-term earnings gains. 
C) a majority of recipients use the money for training and equipment that results in a higher long-term income. 
D) most recipients spend the money on current consumption and realize no long-term gain in earning power.

Question 3

Describe the vicious circle of poverty.

Accepted Answer

The vicious circle of poverty is a probl

Question 4

Refer to the table. If per capita income increases by 10 percent over five years in each of the nations shown, the per capita income gap between country C and country A

Accepted Answer

A) will remain the same. 
B) will rise from $30,934 to $34,027. 
C) may rise or fall depending on the rate of population growth. 
D) will rise from $31,555 to $34,710. 
A) will remain the same. 
B) will rise from $30,934 to $34,027. 
C) may rise or fall depending on the rate of population growth. 
D) will rise from $31,555 to $34,710.

Question 5

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 6

Economists would most likely suggest that advanced nations can best assist in the economic development of developing nations by

Accepted Answer

A) increasing the amount of military aid to strengthen the government's role in providing law and order. 
B) increasing trade barriers so that less-developed nations will become more self-sufficient. 
C) reducing trade barriers and increasing the amount of private and public capital. 
D) decreasing the amounts of private capital or foreign aid to reduce the level of neocolonialism. 
A) increasing the amount of military aid to strengthen the government's role in providing law and order. 
B) increasing trade barriers so that less-developed nations will become more self-sufficient. 
C) reducing trade barriers and increasing the amount of private and public capital. 
D) decreasing the amounts of private capital or foreign aid to reduce the level of neocolonialism.

Question 7

The World Bank defines extreme poverty as

Accepted Answer

A) living on $1.90 per day or less. 
B) living on less than $19 a day. 
C) living without health care and safe water but with adequate food and education. 
D) living on less than $0.19 per day. 
A) living on $1.90 per day or less. 
B) living on less than $19 a day. 
C) living without health care and safe water but with adequate food and education. 
D) living on less than $0.19 per day.

Question 8

Which of the following is typically not a problem for low-income DVCs?

Accepted Answer

A) capital flight 
B) "brain drain" 
C) high saving rates that slow aggregate demand growth 
D) poor infrastructure 
A) capital flight 
B) "brain drain" 
C) high saving rates that slow aggregate demand growth 
D) poor infrastructure

Question 9

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 10

In recent years, a greater proportion of private capital flows to DVCs has been direct foreign investment rather than loans to DVC governments.

Accepted Answer

A) True 
 B)False

Question 11

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

Accepted Answer

A) in-kind investment. 
B) the capricious universe view. 
C) human capital investment. 
D) the will to develop. 
A) in-kind investment. 
B) the capricious universe view. 
C) human capital investment. 
D) the will to develop.

Question 12

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

Accepted Answer

A) True 
 B)False

Question 13

Which attitude or custom is the most conducive to long-term economic growth?

Accepted Answer

A) a focus on group contentment rather than individual achievement 
B) the belief that there is little or no correlation between an individual's economic actions and her or his economic fortunes 
C) the belief that there is a direct connection between individual efforts (including educational efforts)and economic rewards 
D) the use of the majority of resources for religious structures and ceremonies 
A) a focus on group contentment rather than individual achievement 
B) the belief that there is little or no correlation between an individual's economic actions and her or his economic fortunes 
C) the belief that there is a direct connection between individual efforts (including educational efforts)and economic rewards 
D) the use of the majority of resources for religious structures and ceremonies

Question 14

More than 75 percent of the world's income is earned by what percentage of the world's population?

Accepted Answer

A) 5 percent 
B) 10 percent 
C) 20 percent 
D) 40 percent 
A) 5 percent 
B) 10 percent 
C) 20 percent 
D) 40 percent

Question 15

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 16

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Accepted Answer

A) True 
 B)False

Question 17

Without an abundant endowment of natural resources, a nation cannot achieve rapid economic growth.

Accepted Answer

A) True 
 B)False

Question 18

Per capita income in the United States in 2017 was about

Accepted Answer

A) $25,300 per person. 
B) $36,300 per person. 
C) $60,200 per person. 
D) $78,800 per person. 
A) $25,300 per person. 
B) $36,300 per person. 
C) $60,200 per person. 
D) $78,800 per person.

Question 19

The international organization, with 189 member nations, whose major objective is to help DVCs achieve economic growth is the

Accepted Answer

A) World Trade Organization. 
B) World Bank. 
C) G8 Nations. 
D) United Nations. 
A) World Trade Organization. 
B) World Bank. 
C) G8 Nations. 
D) United Nations.

Question 20

Over the next 15 years, ___ out of every 10 people added to the world's population will be born in developing countries.

Accepted Answer

A) 6 
B) 7 
C) 8 
D) 9 
A) 6 
B) 7 
C) 8 
D) 9

Exam 28: The Economics of Developing Countries

Microcredit refers to

Early experiments with unconditional cash transfers have revealed that

Describe the vicious circle of poverty.

Refer to the table. If per capita income increases by 10 percent over five years in each of the nations shown, the per capita income gap between country C and country A

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

Economists would most likely suggest that advanced nations can best assist in the economic development of developing nations by

The World Bank defines extreme poverty as

Which of the following is typically not a problem for low-income DVCs?

Which of the following is a true statement?

In recent years, a greater proportion of private capital flows to DVCs has been direct foreign investment rather than loans to DVC governments.

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

Which attitude or custom is the most conducive to long-term economic growth?

More than 75 percent of the world's income is earned by what percentage of the world's population?

An example of direct foreign investment is

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Without an abundant endowment of natural resources, a nation cannot achieve rapid economic growth.

Per capita income in the United States in 2017 was about

The international organization, with 189 member nations, whose major objective is to help DVCs achieve economic growth is the

Over the next 15 years, ___ out of every 10 people added to the world's population will be born in developing countries.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

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