Question 1

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 2

Which of the following is a characteristic of an LDC?

Accepted Answer

A)  Capital flight. 
B)  Vicious circle of poverty. 
C)  Lack of entrepreneurs. 
D)  All of the above. 
A)  Capital flight. 
B)  Vicious circle of poverty. 
C)  Lack of entrepreneurs. 
D)  All of the above.

Question 3

Which of the following explains the vicious circle of poverty?

Accepted Answer

A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but they cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods. 
E)  There are dual economies in the world: Some are meant to be rich and others are meant to be poor. 
A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but they cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods. 
E)  There are dual economies in the world: Some are meant to be rich and others are meant to be poor.

Question 4

Which of the following is not a characteristic of most less-developed countries?

Accepted Answer

A)  Inadequate human capital. 
B)  Inadequate capital goods. 
C)  High population growth rate. 
D)  Inadequate water supplies. 
E)  High productivity. 
A)  Inadequate human capital. 
B)  Inadequate capital goods. 
C)  High population growth rate. 
D)  Inadequate water supplies. 
E)  High productivity.

Question 5

An industrially advanced country (IAC)is defined as a country with a GDP per capita among the top ____ countries in the world.

Accepted Answer

A)  5 
B)  10 
C)  20 
D)  27 
A)  5 
B)  10 
C)  20 
D)  27

Question 6

Which of the following best defines the vicious circle of poverty?

Accepted Answer

A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit. 
A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit.

Question 7

Waste systems and highways are part of a nation's infrastructure.

Accepted Answer

A) True 
 B)False

Question 8

The "Four Tigers" of East Asia are the newly industrialized countries of Taiwan,South Korea,Hong Kong,and:

Accepted Answer

A)  Japan. 
B)  Singapore. 
C)  the Philippines. 
D)  Vietnam. 
A)  Japan. 
B)  Singapore. 
C)  the Philippines. 
D)  Vietnam.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The world bank is the agency of the U.S.State Department that is in charge of U.S.loans to foreign countries.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true?

Accepted Answer

A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital. 
A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital.

Question 12

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

Accepted Answer

Less-developed countries have high popul

Question 13

If a country's real GDP is growing at 5 percent and the population is also growing at 5 percent,its:

Accepted Answer

A)  per capita real GDP grows at an increasing rate. 
B)  per capita real GDP grows at a constant rate. 
C)  population growth will eventually exceed real GDP. 
D)  per capita real GDP decreases at a constant rate. 
E)  per capita real GDP does not change. 
A)  per capita real GDP grows at an increasing rate. 
B)  per capita real GDP grows at a constant rate. 
C)  population growth will eventually exceed real GDP. 
D)  per capita real GDP decreases at a constant rate. 
E)  per capita real GDP does not change.

Question 14

Economic growth and development in LDCs are low because many of them lack:

Accepted Answer

A)  saving. 
B)  infrastructure. 
C)  a political environment favorable to growth. 
D)  All of the above. 
A)  saving. 
B)  infrastructure. 
C)  a political environment favorable to growth. 
D)  All of the above.

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 23-1 Nation of Padia
  
-Exhibit 23-1 shows the production possibility curve of the nation of Padia.Based only on this information,the point which would produce the highest rate of growth would be:

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  IV 
E)  V 
A)  I 
B)  II 
C)  III 
D)  IV 
E)  V

Question 18

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 19

Which of the following is not evidence of the lower standard of living among less-developed countries?

Accepted Answer

A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate. 
A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate.

Question 20

According to the text,Ireland and Israel are classified as less developed countries (LDCs).

Accepted Answer

A) True 
 B)False

Exam 23: Growth and the Less-Developed Countries

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

Which of the following is a characteristic of an LDC?

Which of the following explains the vicious circle of poverty?

Which of the following is not a characteristic of most less-developed countries?

An industrially advanced country (IAC)is defined as a country with a GDP per capita among the top ____ countries in the world.

Which of the following best defines the vicious circle of poverty?

Waste systems and highways are part of a nation's infrastructure.

The "Four Tigers" of East Asia are the newly industrialized countries of Taiwan,South Korea,Hong Kong,and:

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

The world bank is the agency of the U.S.State Department that is in charge of U.S.loans to foreign countries.

Which of the following is true?

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

If a country's real GDP is growing at 5 percent and the population is also growing at 5 percent,its:

Economic growth and development in LDCs are low because many of them lack:

Compared to IACs,LDCs are often characterized by:

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

Exhibit 23-1 Nation of Padia -Exhibit 23-1 shows the production possibility curve of the nation of Padia.Based only on this information,the point which would produce the highest rate of growth would be:

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

Which of the following is not evidence of the lower standard of living among less-developed countries?

According to the text,Ireland and Israel are classified as less developed countries (LDCs).

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: 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

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

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

International Trade and Finance

Economies in Transition

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