Question 1

Which of the following characterizes the IACs?

Accepted Answer

A) High per capita GDP growth and high population growth. 
B) Low per capita GDP growth and low population growth. 
C) Low per capital GDP growth and high savings rate. 
D) Low human capital investment. 
A) High per capita GDP growth and high population growth. 
B) Low per capita GDP growth and low population growth. 
C) Low per capital GDP growth and high savings rate. 
D) Low human capital investment.

Question 2

Less-developed countries are poor for all of the following reasons except one. Which one?

Accepted Answer

A) They do not produce many goods and services. 
B) Labor productivity is low. 
C) Investment funds tend to flow abroad 
D) Investment in human capital is very low. 
E) The labor force is too small. 
A) They do not produce many goods and services. 
B) Labor productivity is low. 
C) Investment funds tend to flow abroad 
D) Investment in human capital is very low. 
E) The labor force is too small.

Question 3

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

Accepted Answer

A) The development of strong labor unions. 
B) A sharp increase in the legal minimum wage. 
C) An increase in expenditures on education and capital investment. 
D) Rapid growth rate of the money supply. 
A) The development of strong labor unions. 
B) A sharp increase in the legal minimum wage. 
C) An increase in expenditures on education and capital investment. 
D) Rapid growth rate of the money supply.

Question 4

Compared to IACs, LDCs are often characterized by:

Accepted Answer

A) higher life expectancy. 
B) higher adult literacy rates. 
C) higher daily calorie supply. 
D) lower per capita energy consumption. 
A) higher life expectancy. 
B) higher adult literacy rates. 
C) higher daily calorie supply. 
D) lower per capita energy consumption.

Question 5

Which of the following would be most likely to encourage capital formation in a less-developed country?

Accepted Answer

A) The expectation of sustained high inflation. 
B) The expectation that property rights will be highly secure in the years ahead. 
C) The imposition of high tariffs and other restraints limiting imports. 
D) Higher personal and corporate tax rates. 
A) The expectation of sustained high inflation. 
B) The expectation that property rights will be highly secure in the years ahead. 
C) The imposition of high tariffs and other restraints limiting imports. 
D) Higher personal and corporate tax rates.

Question 6

There is a direct link between a nation's per capita real GDP and its:

Accepted Answer

A) c and e. 
B) c, d, and e. 
C) human capital investment. 
D) population. 
E) life expectancy. 
A) c and e. 
B) c, d, and e. 
C) human capital investment. 
D) population. 
E) life expectancy.

Question 7

Which of the following is infrastructure?

Accepted Answer

A) IBM computer plant. 
B) Training and education. 
C) Services of doctors. 
D) None of these. 
A) IBM computer plant. 
B) Training and education. 
C) Services of doctors. 
D) None of these.

Question 8

The main purpose of the International Monetary Fund is to manage and distribute U.S. foreign aid.

Accepted Answer

A) True 
 B)False

Question 9

When per capita real GDP is increasing, real output is growing:

Accepted Answer

A) more rapidly than prices. 
B) more rapidly than population. 
C) less rapidly than prices. 
D) less rapidly than population. 
A) more rapidly than prices. 
B) more rapidly than population. 
C) less rapidly than prices. 
D) less rapidly than population.

Question 10

Which of the following would be most likely to improve the standard of living of a less-developed country?

Accepted Answer

A) Development of strong labor unions. 
B) More foreign investment, attracted by the expectation of economic and political stability. 
C) Adoption of trade barriers (higher tariffs and quotas). 
D) Widespread use of price controls to allocate goods and resources. 
A) Development of strong labor unions. 
B) More foreign investment, attracted by the expectation of economic and political stability. 
C) Adoption of trade barriers (higher tariffs and quotas). 
D) Widespread use of price controls to allocate goods and resources.

Question 11

Describe in general terms four or five characteristics of less-developed countries.

Accepted Answer

Less-developed countries have high popul

Question 12

The vicious circle of poverty refers to a condition where:

Accepted Answer

A) c and d. 
B) c and e. 
C) people are poor because they cannot invest in capital goods and they cannot invest in capital goods because they are poor. 
D) people cannot invest in capital goods because they are poor and they are poor because they cannot invest in capital goods. 
E) poverty is relative and poor people remain poor because the wealthy grow wealthier. 
A) c and d. 
B) c and e. 
C) people are poor because they cannot invest in capital goods and they cannot invest in capital goods because they are poor. 
D) people cannot invest in capital goods because they are poor and they are poor because they cannot invest in capital goods. 
E) poverty is relative and poor people remain poor because the wealthy grow wealthier.

Question 13

The economies of most less-developed countries (LDCs)are based on:

Accepted Answer

A) agriculture. 
B) manufacturing. 
C) services. 
D) oil. 
A) agriculture. 
B) manufacturing. 
C) services. 
D) oil.

Question 14

Describe the vicious cycle of poverty . What are the consequences of this cycle?

Accepted Answer

The vicious cycle of poverty explains th

Question 15

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

Accepted Answer

A) The development of strong labor unions. 
B) An increase in foreign investment. 
C) An increase in the share of the population under 15 years of age. 
D) Higher tariffs and the imposition of other restraints designed to restrict international trade. 
A) The development of strong labor unions. 
B) An increase in foreign investment. 
C) An increase in the share of the population under 15 years of age. 
D) Higher tariffs and the imposition of other restraints designed to restrict international trade.

Question 16

There is a significant positive relationship between ________ and __________.

Accepted Answer

A) natural resource commodity exports, high levels of per capita GDP 
B) investment in capital, high levels of per capita GDP 
C) high levels of illiteracy, high levels of per capita GDP 
D) limited government recognition of land tenure and property ownership, high levels of per capita GDP 
A) natural resource commodity exports, high levels of per capita GDP 
B) investment in capital, high levels of per capita GDP 
C) high levels of illiteracy, high levels of per capita GDP 
D) limited government recognition of land tenure and property ownership, high levels of per capita GDP

Question 17

The vicious circle of poverty refers to the fact that in LDCs,

Accepted Answer

A) low living standards lead to declines in population growth. 
B) too much spending leads to periods of recession. 
C) people are poor because too much is spent on capital goods. 
D) there are not enough people in the under-15 age groups. 
E) poverty leads to low investment in capital goods. 
A) low living standards lead to declines in population growth. 
B) too much spending leads to periods of recession. 
C) people are poor because too much is spent on capital goods. 
D) there are not enough people in the under-15 age groups. 
E) poverty leads to low investment in capital goods.

Question 18

In general, GDP per capita is highly correlated with alternative measures of quality of life.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Accepted Answer

A) Development of strong labor unions. 
B) More rapid population growth. 
C) Investment expenditures that enhance the human capital of labor force participants. 
D) An international minimum wage law. 
A) Development of strong labor unions. 
B) More rapid population growth. 
C) Investment expenditures that enhance the human capital of labor force participants. 
D) An international minimum wage law.

Question 20

If real GDP is increasing more rapidly than population:

Accepted Answer

A) population must be declining. 
B) the country will have to export more than it imports. 
C) the general level of prices must be increasing. 
D) per capita real GDP will be increasing. 
A) population must be declining. 
B) the country will have to export more than it imports. 
C) the general level of prices must be increasing. 
D) per capita real GDP will be increasing.

Exam 20: Growth and the Less-Developed Countries

Which of the following characterizes the IACs?

Less-developed countries are poor for all of the following reasons except one. Which one?

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

Compared to IACs, LDCs are often characterized by:

Which of the following would be most likely to encourage capital formation in a less-developed country?

There is a direct link between a nation's per capita real GDP and its:

Which of the following is infrastructure?

The main purpose of the International Monetary Fund is to manage and distribute U.S. foreign aid.

When per capita real GDP is increasing, real output is growing:

Which of the following would be most likely to improve the standard of living of a less-developed country?

Describe in general terms four or five characteristics of less-developed countries.

The vicious circle of poverty refers to a condition where:

The economies of most less-developed countries (LDCs)are based on:

Describe the vicious cycle of poverty . What are the consequences of this cycle?

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

There is a significant positive relationship between ________ and __________.

The vicious circle of poverty refers to the fact that in LDCs,

In general, GDP per capita is highly correlated with alternative measures of quality of life.

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

If real GDP is increasing more rapidly than population:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters

There is a significant positive relationship between and __.