Question 1

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

Accepted Answer

The vicious cycle of poverty explains th

Question 2

What role does population growth play in economic development?

Accepted Answer

Rapid population growth creates a high d

Question 3

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 4

Which of the following makes short-term conditional low-interest loans to LDCs?

Accepted Answer

A)  World Bank. 
B)  Agency for International Development (AI
D) . 
C)  Agency for International Finance (AIF). 
D)  International Monetary Fund (IMF). 
A)  World Bank. 
B)  Agency for International Development (AI
D) . 
C)  Agency for International Finance (AIF). 
D)  International Monetary Fund (IMF).

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is infrastructure?

Accepted Answer

A)  Police. 
B)  Training and education. 
C)  Highways. 
D)  All of the above. 
E)  None of the above. 
A)  Police. 
B)  Training and education. 
C)  Highways. 
D)  All of the above. 
E)  None of the above.

Question 7

An outward shift of an economy's production possibilities curve is caused by:

Accepted Answer

A)  an increase in capital. 
B)  an increase in labor. 
C)  an advance in technology. 
D)  all of the above. 
A)  an increase in capital. 
B)  an increase in labor. 
C)  an advance in technology. 
D)  all of the above.

Question 8

International comparisons of per capita GDP may not reflect the standard of living because __________. ​

Accepted Answer

A)  ​ currency exchange rates may not fully account for differences in purchasing power, and thus people in a country with high per capita GDP may have a lower standard of living because of high local prices for food, housing, or other necessities. 
B)  ​ people in some countries enjoy poverty and do not mind a lack of access to medicine, education, nutritious food, and safe drinking water. 
C)  ​ markets do not exist in less-developed countries. 
D)  ​ None of the answers above are correct. 
A)  ​ currency exchange rates may not fully account for differences in purchasing power, and thus people in a country with high per capita GDP may have a lower standard of living because of high local prices for food, housing, or other necessities. 
B)  ​ people in some countries enjoy poverty and do not mind a lack of access to medicine, education, nutritious food, and safe drinking water. 
C)  ​ markets do not exist in less-developed countries. 
D)  ​ None of the answers above are correct.

Question 9

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 10

The vicious circle of poverty makes it difficult for an LDC to:

Accepted Answer

A)  establish political institutions. 
B)  control inflation. 
C)  save and invest. 
D)  fix its exchange rate. 
A)  establish political institutions. 
B)  control inflation. 
C)  save and invest. 
D)  fix its exchange rate.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 13

How much of the U. S. federal budget is spent on foreign aid?

Accepted Answer

A)  About 1 percent. 
B)  About 5 percent. 
C)  About 25 percent. 
D)  About 50 percent. 
A)  About 1 percent. 
B)  About 5 percent. 
C)  About 25 percent. 
D)  About 50 percent.

Question 14

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

Accepted Answer

A)  Higher tax rates. 
B)  A higher rate of investment. 
C)  A smaller trade sector. 
D)  Greater use of taxation to transfer income from the rich to the poor. 
A)  Higher tax rates. 
B)  A higher rate of investment. 
C)  A smaller trade sector. 
D)  Greater use of taxation to transfer income from the rich to the poor.

Question 15

If an economy's population grows at 3 percent and real GDP grows at 3 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 constant. 
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 constant. 
E)  the economy is experiencing unemployment.

Question 16

Which of the following statements is true ?

Accepted Answer

A)  There is no single correct strategy for economic growth and development. 
B)  In general, GDP per capita is highly correlated with alternative quality of life measures. 
C)  The World Bank is affiliated with the United Nations and makes long-term low-interest loans to LDCs. 
D)  All of the above. 
A)  There is no single correct strategy for economic growth and development. 
B)  In general, GDP per capita is highly correlated with alternative quality of life measures. 
C)  The World Bank is affiliated with the United Nations and makes long-term low-interest loans to LDCs. 
D)  All of the above.

Question 17

The number of the countries of the world classified as a less developed country (LDC) is about:

Accepted Answer

A)  50. 
B)  75. 
C)  100. 
D)  150. 
E)  300. 
A)  50. 
B)  75. 
C)  100. 
D)  150. 
E)  300.

Question 18

Domestic law and order, the infrastructure, and the climate of international trade are all aspects of a country's:

Accepted Answer

A)  natural resources endowment. 
B)  human resources investment. 
C)  capital investment. 
D)  political environment. 
A)  natural resources endowment. 
B)  human resources investment. 
C)  capital investment. 
D)  political environment.

Question 19

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 20

Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?

Accepted Answer

A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty. 
A)  Infrastructure. 
B)  Political stability. 
C)  Agricultural sector. 
D)  Traditional values. 
E)  Poverty.

Exam 23: Growth and the Less-Developed Countries

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

What role does population growth play in economic development?

Compared to IACs, LDCs are often characterized by:

Which of the following makes short-term conditional low-interest loans to LDCs?

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

Which of the following is infrastructure?

An outward shift of an economy's production possibilities curve is caused by:

International comparisons of per capita GDP may not reflect the standard of living because __________. ​

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

The vicious circle of poverty makes it difficult for an LDC to:

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

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

How much of the U. S. federal budget is spent on foreign aid?

Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?

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

Which of the following statements is true ?

The number of the countries of the world classified as a less developed country (LDC) is about:

Domestic law and order, the infrastructure, and the climate of international trade are all aspects of a country's:

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

Suppose Embryonica is an LDC with few skilled workers, a primitive banking system, and very little electric power. What do we know for sure that Embryonica is lacking?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

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

International Trade and Finance

Economies in Transition

Filters

International comparisons of per capita GDP may not reflect the standard of living because __________.