Question 1

Which of the following countries had the highest population growth rate in 2016-2017?

Accepted Answer

A) United States 
B) Kenya 
C) China 
D) Venezuela 
A) United States 
B) Kenya 
C) China 
D) Venezuela

Question 2

All developing countries suffer from a critical shortage of

Accepted Answer

A) land. 
B) population. 
C) capital goods. 
D) government regulation. 
A) land. 
B) population. 
C) capital goods. 
D) government regulation.

Question 3

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 4 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Accepted Answer

A) remain unchanged at $19,000. 
B) increase by $760. 
C) decrease by $1,000. 
D) increase by $19,760. 
A) remain unchanged at $19,000. 
B) increase by $760. 
C) decrease by $1,000. 
D) increase by $19,760.

Question 4

Refer to the table. Which of the following might reduce the per capita income gap between countries A and E?

Accepted Answer

A) faster population growth in country A than in country E 
B) greater investment relative to GDP in country E than in country A 
C) more rapid improvement in literacy and education in country A than in country E 
D) increased capital flight from country A relative to that from country E 
A) faster population growth in country A than in country E 
B) greater investment relative to GDP in country E than in country A 
C) more rapid improvement in literacy and education in country A than in country E 
D) increased capital flight from country A relative to that from country E

Question 5

At the present time, the largest percentage of the national incomes of the low-income DVCs is used for

Accepted Answer

A) imports of the finished products of foreign industries. 
B) food. 
C) infrastructure. 
D) industrial development. 
A) imports of the finished products of foreign industries. 
B) food. 
C) infrastructure. 
D) industrial development.

Question 6

What is capital flight?

Accepted Answer

Capital flight is the transfer of saving

Question 7

Development experts are less enthusiastic than they used to be about three decades ago about the positive role of DVC governments in promoting economic growth in their less-developed nations because of the

Accepted Answer

A) corruption in government. 
B) availability of foreign aid. 
C) need for a greater tax collection. 
D) need for more public capital goods. 
A) corruption in government. 
B) availability of foreign aid. 
C) need for a greater tax collection. 
D) need for more public capital goods.

Question 8

Suppose that the average annual rate of population increase in Econland in recent years was about 2 percent. Based on this rate of growth, the population of Econland will double in about

Accepted Answer

A) 7 years. 
B) 11 years. 
C) 35 years. 
D) 46 years. 
A) 7 years. 
B) 11 years. 
C) 35 years. 
D) 46 years.

Question 9

Underemployment occurs

Accepted Answer

A) when workers do not have jobs. 
B) when farm workers become more productive. 
C) when workers are working fewer hours than they desire or when they are working less productively than they are capable of. 
D) in IACs but not in the DVCs. 
A) when workers do not have jobs. 
B) when farm workers become more productive. 
C) when workers are working fewer hours than they desire or when they are working less productively than they are capable of. 
D) in IACs but not in the DVCs.

Question 10

A recommended policy for developing countries to stimulate economic growth would be

Accepted Answer

A) abolishing central banks. 
B) more central planning by government. 
C) encouraging more direct foreign investment. 
D) expanding employment in state industries. 
A) abolishing central banks. 
B) more central planning by government. 
C) encouraging more direct foreign investment. 
D) expanding employment in state industries.

Question 11

The World Bank has found that even households living in extreme poverty can provide for basic human needs like safe water and sturdy shelter.

Accepted Answer

A) True 
 B)False

Question 12

The exports of the DVCs consist largely of

Accepted Answer

A) high-technology goods. 
B) raw materials and farm products. 
C) manufactured goods. 
D) services and financial capital. 
A) high-technology goods. 
B) raw materials and farm products. 
C) manufactured goods. 
D) services and financial capital.

Question 13

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following countries had the highest population density (population per square km)in 2017?

Accepted Answer

A) United States 
B) India 
C) China 
D) Venezuela 
A) United States 
B) India 
C) China 
D) Venezuela

Question 15

A recommended policy for DVCs to implement that promotes economic growth is

Accepted Answer

A) establishing realistic policies for exchange rates. 
B) obtaining more low-interest loans from the U.S. government. 
C) encouraging more tariffs and quotas to protect DVC businesses. 
D) discouraging direct foreign investment to make DVCs more self-sufficient. 
A) establishing realistic policies for exchange rates. 
B) obtaining more low-interest loans from the U.S. government. 
C) encouraging more tariffs and quotas to protect DVC businesses. 
D) discouraging direct foreign investment to make DVCs more self-sufficient.

Question 16

Which of the following countries had the highest per capita income (on a purchasing power parity basis)in 2017?

Accepted Answer

A) China 
B) United States 
C) Japan 
D) Brazil 
A) China 
B) United States 
C) Japan 
D) Brazil

Question 17

At the beginning of the year, one developing country (DVC)has a real income per capita of $800. In a developed country (IAC), the real income per capita is $30,000. Both countries experience a 4 percent growth rate for the year. At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

Accepted Answer

A) $30,368. 
B) $31,200. 
C) $30,120. 
D) $32,032. 
A) $30,368. 
B) $31,200. 
C) $30,120. 
D) $32,032.

Question 18

A major criticism of foreign aid to developing nations is that it

Accepted Answer

A) is capital saving rather than capital intensive. 
B) provides incentives for a brain drain. 
C) encourages corruption and misuse of funds. 
D) gives too much power and control to the International Monetary Fund. 
A) is capital saving rather than capital intensive. 
B) provides incentives for a brain drain. 
C) encourages corruption and misuse of funds. 
D) gives too much power and control to the International Monetary Fund.

Question 19

Assume the total real income of a developing country increases from $8.5 billion to $8.5 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per capita income has

Accepted Answer

A) decreased by about $5 per person. 
B) increased by about $1 per person. 
C) decreased by about $46 per person. 
D) increased by about $500 per person. 
A) decreased by about $5 per person. 
B) increased by about $1 per person. 
C) decreased by about $46 per person. 
D) increased by about $500 per person.

Question 20

Which of the following is generally not an effective strategy to promote DVC growth?

Accepted Answer

A) microlending 
B) human capital development 
C) fighting wars against neighbors to obtain resources and stimulate aggregate demand through arms spending 
D) controlling inflation 
A) microlending 
B) human capital development 
C) fighting wars against neighbors to obtain resources and stimulate aggregate demand through arms spending 
D) controlling inflation

Exam 28: The Economics of Developing Countries

Which of the following countries had the highest population growth rate in 2016-2017?

All developing countries suffer from a critical shortage of

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 4 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Refer to the table. Which of the following might reduce the per capita income gap between countries A and E?

At the present time, the largest percentage of the national incomes of the low-income DVCs is used for

What is capital flight?

Development experts are less enthusiastic than they used to be about three decades ago about the positive role of DVC governments in promoting economic growth in their less-developed nations because of the

Suppose that the average annual rate of population increase in Econland in recent years was about 2 percent. Based on this rate of growth, the population of Econland will double in about

Underemployment occurs

A recommended policy for developing countries to stimulate economic growth would be

The World Bank has found that even households living in extreme poverty can provide for basic human needs like safe water and sturdy shelter.

The exports of the DVCs consist largely of

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

Which of the following countries had the highest population density (population per square km)in 2017?

A recommended policy for DVCs to implement that promotes economic growth is

Which of the following countries had the highest per capita income (on a purchasing power parity basis)in 2017?

A major criticism of foreign aid to developing nations is that it

Assume the total real income of a developing country increases from $8.5 billion to $8.5 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per capita income has

Which of the following is generally not an effective strategy to promote DVC growth?

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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