Question 1

In 2017, the GDP of the United States was approximately

Accepted Answer

A) $9 trillion less than the GDP of the 135 DVCs in that year. 
B) $9 trillion more than the GDP of the 135 DVCs in that year. 
C) twice the GDP of the 135 DVCs in that year. 
D) the same as the GDP of 135 DVCs in that year. 
A) $9 trillion less than the GDP of the 135 DVCs in that year. 
B) $9 trillion more than the GDP of the 135 DVCs in that year. 
C) twice the GDP of the 135 DVCs in that year. 
D) the same as the GDP of 135 DVCs in that year.

Question 2

The World Bank

Accepted Answer

A) provides military assistance to those nations interested in improving national defense. 
B) makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools. 
C) provides gold for DVCs that want to go on the gold standard. 
D) provides short-term loans to DVCs that are incurring balance of payments deficits. 
A) provides military assistance to those nations interested in improving national defense. 
B) makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools. 
C) provides gold for DVCs that want to go on the gold standard. 
D) provides short-term loans to DVCs that are incurring balance of payments deficits.

Question 3

Avenues for the government to foster economic growth and development include the following, except

Accepted Answer

A) nationalization and protection of domestic industries. 
B) establishing the rule of law and protection of property rights. 
C) building infrastructure and technological support. 
D) building human capital and promoting entrepreneurship. 
A) nationalization and protection of domestic industries. 
B) establishing the rule of law and protection of property rights. 
C) building infrastructure and technological support. 
D) building human capital and promoting entrepreneurship.

Question 4

Which of the following seems to be the most acute institutional problem that needs to be resolved by many DVCs?

Accepted Answer

A) the use of capital-saving technology 
B) development of natural resources 
C) widespread political corruption 
D) an increase in foreign aid 
A) the use of capital-saving technology 
B) development of natural resources 
C) widespread political corruption 
D) an increase in foreign aid

Question 5

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

Accepted Answer

A) The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B) Capital flight reduces investment opportunities and the need for saving in DVCs. 
C) There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D) The domestic output of DVCs is so low that the absolute volume of saving is small. 
A) The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B) Capital flight reduces investment opportunities and the need for saving in DVCs. 
C) There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D) The domestic output of DVCs is so low that the absolute volume of saving is small.

Question 6

The building of a new factory by a corporation would be an example of increasing the infrastructure in a developing nation.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following factors contributes most to the high per capita incomes in developed nations?

Accepted Answer

A) high rates of population growth 
B) high rates of economic growth 
C) low rates of investment 
D) low rates of saving 
A) high rates of population growth 
B) high rates of economic growth 
C) low rates of investment 
D) low rates of saving

Question 8

Developing countries (DVCs)can be subdivided into the following groups except

Accepted Answer

A) low-income economies. 
B) high-income economies. 
C) lower-middle-income economies. 
D) upper-middle-income economies. 
A) low-income economies. 
B) high-income economies. 
C) lower-middle-income economies. 
D) upper-middle-income economies.

Question 9

Japan is a nation that achieved a high standard of living despite having a very limited supply of natural resources.

Accepted Answer

A) True 
 B)False

Question 10

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan)and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Accepted Answer

A) True 
 B)False

Question 11

In recent years, the industrially advanced nations as a group have provided foreign aid amounting to about what percentage of their aggregate outputs?

Accepted Answer

A) 0.25 percent 
B) 0.7 percent 
C) 1 percent 
D) 2 percent 
A) 0.25 percent 
B) 0.7 percent 
C) 1 percent 
D) 2 percent

Question 12

The fertility rates-the number of children per woman's lifetime-in most DVCs (developing countries)are

Accepted Answer

A) rising slowly. 
B) rising quickly. 
C) staying constant. 
D) declining. 
A) rising slowly. 
B) rising quickly. 
C) staying constant. 
D) declining.

Question 13

A large portion of government-provided foreign aid to developing countries

Accepted Answer

A) has averaged about 1 percent of the IACs' GDP each year. 
B) has increased sharply and steadily since 1995. 
C) has dwarfed the size of foreign direct investment to the DVCs in recent years. 
D) is distributed on the basis of political and military considerations. 
A) has averaged about 1 percent of the IACs' GDP each year. 
B) has increased sharply and steadily since 1995. 
C) has dwarfed the size of foreign direct investment to the DVCs in recent years. 
D) is distributed on the basis of political and military considerations.

Question 14

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Accepted Answer

A) 25 percent 
B) 50 percent 
C) 70 percent 
D) 90 percent 
A) 25 percent 
B) 50 percent 
C) 70 percent 
D) 90 percent

Question 15

Which of the following would most help a developing country (DVC)break out of the vicious circle of poverty?

Accepted Answer

A) more consumption 
B) more food production 
C) an increase in the birth rate 
D) an increase in labor productivity 
A) more consumption 
B) more food production 
C) an increase in the birth rate 
D) an increase in labor productivity

Question 16

Industrially advanced countries can best help DVCs by

Accepted Answer

A) directing requests from DVCs for aid to the World Bank. 
B) using the International Monetary Fund to determine exchange rates in DVCs. 
C) increasing management control over development projects. 
D) adopting policies that expand trade with DVCs. 
A) directing requests from DVCs for aid to the World Bank. 
B) using the International Monetary Fund to determine exchange rates in DVCs. 
C) increasing management control over development projects. 
D) adopting policies that expand trade with DVCs.

Question 17

At the beginning of the year, one developing country (DVC)has a real income per capita of $1,500. In a developed country (IAC), the real income per capita is $30,000. Both countries experience a 6 percent growth rate for the year. At the end of the year, the absolute income gap between these two countries will have increased from $28,500 to

Accepted Answer

A) $30,210. 
B) $31,800. 
C) $30,180. 
D) $33,390. 
A) $30,210. 
B) $31,800. 
C) $30,180. 
D) $33,390.

Question 18

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Accepted Answer

A) a lack of infrastructure. 
B) rigid law enforcement in the country. 
C) excessive local entrepreneurship. 
D) all these reasons. 
A) a lack of infrastructure. 
B) rigid law enforcement in the country. 
C) excessive local entrepreneurship. 
D) all these reasons.

Question 19

Which of the following is a major obstacle to economic growth in DVCs?

Accepted Answer

A) a fall in population growth 
B) a decline in demographic transition 
C) the low demand for natural resources 
D) the low supply of saving 
A) a fall in population growth 
B) a decline in demographic transition 
C) the low demand for natural resources 
D) the low supply of saving

Question 20

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

Accepted Answer

A) True 
 B)False

Exam 28: The Economics of Developing Countries

In 2017, the GDP of the United States was approximately

The World Bank

Avenues for the government to foster economic growth and development include the following, except

Which of the following seems to be the most acute institutional problem that needs to be resolved by many DVCs?

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

The building of a new factory by a corporation would be an example of increasing the infrastructure in a developing nation.

Which of the following factors contributes most to the high per capita incomes in developed nations?

Developing countries (DVCs)can be subdivided into the following groups except

Japan is a nation that achieved a high standard of living despite having a very limited supply of natural resources.

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan)and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

In recent years, the industrially advanced nations as a group have provided foreign aid amounting to about what percentage of their aggregate outputs?

The fertility rates-the number of children per woman's lifetime-in most DVCs (developing countries)are

A large portion of government-provided foreign aid to developing countries

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Which of the following would most help a developing country (DVC)break out of the vicious circle of poverty?

Industrially advanced countries can best help DVCs by

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Which of the following is a major obstacle to economic growth in DVCs?

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

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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