Question 1

The vicious circle of poverty refers to the fact that LDCs are poor because other countries do not want to buy their goods and services.

Accepted Answer

A) True 
 B)False

Question 2

If population grows faster than GDP, then per capita GDP must fall.

Accepted Answer

A) True 
 B)False

Question 3

A country with a high GDP per capita is classified as an industrially advanced country (IAC).

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a problem for less-developed countries?

Accepted Answer

A) Poor health and nutrition. 
B) Shortages of labor. 
C) High unemployment rates. 
D) Low labor productivity. 
E) low life expectancy 
A) Poor health and nutrition. 
B) Shortages of labor. 
C) High unemployment rates. 
D) Low labor productivity. 
E) low life expectancy

Question 5

Economists believe that political instability can facilitate economic development in an LDC by making its citizens more open to change and new technology.

Accepted Answer

A) True 
 B)False

Question 6

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Accepted Answer

A) True 
 B)False

Question 7

Investment in both physical and human capital enhances economic growth because it:

Accepted Answer

A) increases consumption during the current period. 
B) makes it possible for individuals to produce more goods and services per hour worked. 
C) encourages firms to expand output by employing more low-productivity workers. 
D) encourages workers to unionize and, thereby, fight for higher wages. 
A) increases consumption during the current period. 
B) makes it possible for individuals to produce more goods and services per hour worked. 
C) encourages firms to expand output by employing more low-productivity workers. 
D) encourages workers to unionize and, thereby, fight for higher wages.

Question 8

Which of the following is infrastructure?

Accepted Answer

A) Schools. 
B) Roads. 
C) Public health and sanitation services. 
D) All of these. 
A) Schools. 
B) Roads. 
C) Public health and sanitation services. 
D) All of these.

Question 9

Which of the following is in charge of U.S. aid to foreign countries?

Accepted Answer

A) Agency for International Development (AI
D) . 
B) World Bank. 
C) International Monetary Fund (IMF). 
D) New International Economic Order (NIEO). 
A) Agency for International Development (AI
D) . 
B) World Bank. 
C) International Monetary Fund (IMF). 
D) New International Economic Order (NIEO).

Question 10

If an economy's population grows at 3 percent and real GDP grows at 2 percent, then:

Accepted Answer

A) per capita real GDP is declining. 
B) the economy's standard of living is increasing. 
C) per capita real GDP is negative. 
D) per capita real GDP is growing. 
E) the economy is experiencing unemployment. 
A) per capita real GDP is declining. 
B) the economy's standard of living is increasing. 
C) per capita real GDP is negative. 
D) per capita real GDP is growing. 
E) the economy is experiencing unemployment.

Question 11

GDP per capita provides a reasonably accurate measurement of a country's income distribution.

Accepted Answer

A) True 
 B)False

Question 12

A country cannot develop without a large natural resource base.

Accepted Answer

A) True 
 B)False

Question 13

The vicious circle of poverty is the trap in which the LDC is too poor to save and therefore it cannot invest and remains poor.

Accepted Answer

A) True 
 B)False

Question 14

Total GDP is the best way to identify a less-developed country

Accepted Answer

A) True 
 B)False

Question 15

A nation's infrastructure includes all of the following except its:

Accepted Answer

A) market system. 
B) educational system. 
C) energy system. 
D) railroad system. 
E) religious system. 
A) market system. 
B) educational system. 
C) energy system. 
D) railroad system. 
E) religious system.

Question 16

Which of the following is not generally considered to be an ingredient for economic growth?

Accepted Answer

A) Investment in human capital. 
B) Political instability. 
C) High savings rate and investment in capital. 
D) Growth in technology. 
E) Investment in infrastructure. 
A) Investment in human capital. 
B) Political instability. 
C) High savings rate and investment in capital. 
D) Growth in technology. 
E) Investment in infrastructure.

Question 17

Which of the following is a true statement?

Accepted Answer

A) The LDC classification is of the questionable accuracy. 
B) GDP per capita ignores the degree of income distribution. 
C) GDP per capita is affected by exchange rate changes. 
D) GDP per capita does not account for the difference in the cost of living among nations. 
E) All of these are true. 
A) The LDC classification is of the questionable accuracy. 
B) GDP per capita ignores the degree of income distribution. 
C) GDP per capita is affected by exchange rate changes. 
D) GDP per capita does not account for the difference in the cost of living among nations. 
E) All of these are true.

Exam 20: Growth and the Less-Developed Countries

The vicious circle of poverty refers to the fact that LDCs are poor because other countries do not want to buy their goods and services.

If population grows faster than GDP, then per capita GDP must fall.

A country with a high GDP per capita is classified as an industrially advanced country (IAC).

Which of the following is not a problem for less-developed countries?

Economists believe that political instability can facilitate economic development in an LDC by making its citizens more open to change and new technology.

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Investment in both physical and human capital enhances economic growth because it:

Which of the following is infrastructure?

Which of the following is in charge of U.S. aid to foreign countries?

If an economy's population grows at 3 percent and real GDP grows at 2 percent, then:

GDP per capita provides a reasonably accurate measurement of a country's income distribution.

A country cannot develop without a large natural resource base.

The vicious circle of poverty is the trap in which the LDC is too poor to save and therefore it cannot invest and remains poor.

Total GDP is the best way to identify a less-developed country

A nation's infrastructure includes all of the following except its:

Which of the following is not generally considered to be an ingredient for economic growth?

Which of the following is a true statement?

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