Question 1

Inward-oriented development strategies focus on exports of goods and services.

Accepted Answer

A) True 
 B)False  False

Question 2

Statistics show that countries with the lowest rates of economic growth have a strong outward-oriented development strategy.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is least likely to be a reason for the difficulty in measuring poverty across countries?

Accepted Answer

A)  Different currencies 
B)  Different customs 
C)  Different living arrangements 
D)  Different trade balances 
E)  Limited data 
A)  Different currencies 
B)  Different customs 
C)  Different living arrangements 
D)  Different trade balances 
E)  Limited data D

Question 4

Which of the following can be categorized as multilateral aid?

Accepted Answer

A)  The U.S. providing funds to Haiti 
B)  World Bank providing financial assistance in the form of flood relief funds to Brazil 
C)  Pakistan requesting financial assistance for earthquake relief from the developed world 
D)  France promising funds to the Philippines against duty-free imports of French products 
E)  USAID relieving Nepal of the outstanding debt the latter owes to the organization 
A)  The U.S. providing funds to Haiti 
B)  World Bank providing financial assistance in the form of flood relief funds to Brazil 
C)  Pakistan requesting financial assistance for earthquake relief from the developed world 
D)  France promising funds to the Philippines against duty-free imports of French products 
E)  USAID relieving Nepal of the outstanding debt the latter owes to the organization

Question 5

What is measured by the ratio of export prices to import prices?

Accepted Answer

A)  The terms of trade 
B)  The productivity ratio 
C)  The trade standards 
D)  The gains from trade 
E)  The balance of trade 
A)  The terms of trade 
B)  The productivity ratio 
C)  The trade standards 
D)  The gains from trade 
E)  The balance of trade

Question 6

Higher per capita GNP always means higher quality of life.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true?

Accepted Answer

A)  Multinational firms tend to reduce the flow of technology between countries. 
B)  Most foreign direct investment is found in labor-intensive industries. 
C)  Multinationals do not always help to reduce the trade deficit of the host country. 
D)  Foreign firms contribute to a significant increase in the host country's unemployment rate. 
E)  Foreign direct investment reduces the stock of capital of the domestic country. 
A)  Multinational firms tend to reduce the flow of technology between countries. 
B)  Most foreign direct investment is found in labor-intensive industries. 
C)  Multinationals do not always help to reduce the trade deficit of the host country. 
D)  Foreign firms contribute to a significant increase in the host country's unemployment rate. 
E)  Foreign direct investment reduces the stock of capital of the domestic country.

Question 8

Foreign aid usually consists of funds loaned at high interest rates.

Accepted Answer

A) True 
 B)False

Question 9

Mexico and India have a fairly large number of engineers and technical personnel, which means that new technology can be adapted relatively quickly.

Accepted Answer

A) True 
 B)False

Question 10

A foreign aid that flows from one country to another is called a(n):

Accepted Answer

A)  project aid. 
B)  emergency aid. 
C)  development aid. 
D)  bilateral aid. 
E)  multilateral aid. 
A)  project aid. 
B)  emergency aid. 
C)  development aid. 
D)  bilateral aid. 
E)  multilateral aid.

Question 11

Which of the following is most likely to be a reason for immigrants to become entrepreneurs in developing countries?

Accepted Answer

A)  They usually hold government positions. 
B)  They are poorer than the domestic population. 
C)  They are risk-averse. 
D)  They have skills and experience that are lacking in poor nations. 
E)  They quickly assimilate to their new environment. 
A)  They usually hold government positions. 
B)  They are poorer than the domestic population. 
C)  They are risk-averse. 
D)  They have skills and experience that are lacking in poor nations. 
E)  They quickly assimilate to their new environment.

Question 12

The Taiwanese government allows tax credits for domestic producers who compete with manufacturers in First World nations. This suggests that Taiwan engages in _____.

Accepted Answer

A)  trade protectionism 
B)  export substitution 
C)  foreign exchange market intervention 
D)  import substitution 
E)  voluntary export restrictions 
A)  trade protectionism 
B)  export substitution 
C)  foreign exchange market intervention 
D)  import substitution 
E)  voluntary export restrictions

Question 13

Import quotas are aimed at increasing the quality of domestic products.

Accepted Answer

A) True 
 B)False

Question 14

A country is strongly inward-oriented if exports are clearly discouraged by controls to isolate and protect the domestic market.

Accepted Answer

A) True 
 B)False

Question 15

No government that receives foreign aid sells products to its people.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not an argument in favor of inward-oriented strategies?

Accepted Answer

A)  A newly developing economy needs protection from foreign competition. 
B)  Government restrictions are necessary to maximize the rate of economic growth. 
C)  Deteriorating prices of primary products in relation to manufactured goods expose developing countries to increasingly unfavorable terms of trade. 
D)  Developing countries should compete on the basis of comparative advantage. 
E)  Economic growth requires rapid industrialization and a shift away from primary products. 
A)  A newly developing economy needs protection from foreign competition. 
B)  Government restrictions are necessary to maximize the rate of economic growth. 
C)  Deteriorating prices of primary products in relation to manufactured goods expose developing countries to increasingly unfavorable terms of trade. 
D)  Developing countries should compete on the basis of comparative advantage. 
E)  Economic growth requires rapid industrialization and a shift away from primary products.

Question 17

Foreign direct investment occurs when a company:

Accepted Answer

A)  purchases foreign securities such as stocks and bonds. 
B)  establishes foreign operating units. 
C)  enters into a contractual agreement involving exchange of services and payments. 
D)  engages in international trade. 
E)  gives aid to a Third World country. 
A)  purchases foreign securities such as stocks and bonds. 
B)  establishes foreign operating units. 
C)  enters into a contractual agreement involving exchange of services and payments. 
D)  engages in international trade. 
E)  gives aid to a Third World country.

Question 18

Which of the following sentences about entrepreneurs stands true?

Accepted Answer

A)  They tend to be risk-averse individuals. 
B)  They are more frequently found in societies that support social conformity. 
C)  They help achieve technological progress. 
D)  They are more frequently found in the local population of the developing countries. 
E)  They usually belong to the traditional elite class. 
A)  They tend to be risk-averse individuals. 
B)  They are more frequently found in societies that support social conformity. 
C)  They help achieve technological progress. 
D)  They are more frequently found in the local population of the developing countries. 
E)  They usually belong to the traditional elite class.

Question 19

Which of the following is an obstacle to economic growth?

Accepted Answer

A)  Political instability 
B)  Government support for private industry 
C)  Slow population growth 
D)  Enforcement of private property rights 
E)  The inability of special interest groups to block changes in economic policy 
A)  Political instability 
B)  Government support for private industry 
C)  Slow population growth 
D)  Enforcement of private property rights 
E)  The inability of special interest groups to block changes in economic policy

Question 20

It is generally true that per capita GNP is:

Accepted Answer

A)  negatively correlated with labor productivity. 
B)  positively correlated with the standard of living. 
C)  negatively correlated with the life expectancy rate. 
D)  uncorrelated with the literacy level. 
E)  positively correlated with the rate of population growth. 
A)  negatively correlated with labor productivity. 
B)  positively correlated with the standard of living. 
C)  negatively correlated with the life expectancy rate. 
D)  uncorrelated with the literacy level. 
E)  positively correlated with the rate of population growth.

Exam 17: Development Economics

Inward-oriented development strategies focus on exports of goods and services.

Statistics show that countries with the lowest rates of economic growth have a strong outward-oriented development strategy.

Which of the following is least likely to be a reason for the difficulty in measuring poverty across countries?

Which of the following can be categorized as multilateral aid?

What is measured by the ratio of export prices to import prices?

Higher per capita GNP always means higher quality of life.

Which of the following statements is true?

Foreign aid usually consists of funds loaned at high interest rates.

Mexico and India have a fairly large number of engineers and technical personnel, which means that new technology can be adapted relatively quickly.

A foreign aid that flows from one country to another is called a(n):

Which of the following is most likely to be a reason for immigrants to become entrepreneurs in developing countries?

The Taiwanese government allows tax credits for domestic producers who compete with manufacturers in First World nations. This suggests that Taiwan engages in _____.

Import quotas are aimed at increasing the quality of domestic products.

A country is strongly inward-oriented if exports are clearly discouraged by controls to isolate and protect the domestic market.

No government that receives foreign aid sells products to its people.

Which of the following is not an argument in favor of inward-oriented strategies?

Foreign direct investment occurs when a company:

Which of the following sentences about entrepreneurs stands true?

Which of the following is an obstacle to economic growth?

It is generally true that per capita GNP is:

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchapterange Rates and Financial Links Between Countries

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