Question 1

Economic development encompasses which of the following measures?

Accepted Answer

A)  Distribution of income. 
B)  Legal system. 
C)  Transportation structures. 
D)  All of the above. 
A)  Distribution of income. 
B)  Legal system. 
C)  Transportation structures. 
D)  All of the above.

Question 2

If a country's population growth rate exceeds the growth rate in its GDP,which of the following is true?

Accepted Answer

A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above. 
A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above.

Question 3

Which of the following is most important if the living standards of people residing in a country are going to improve?

Accepted Answer

A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP 
A)  growth of population 
B)  growth of per capita GDP 
C)  growth of the money supply 
D)  growth of government expenditures as a share of GDP

Question 4

According to the classification in the text,which of the following is not an industrially advanced country (IAC)?

Accepted Answer

A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland. 
A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland.

Question 5

The nation of Exland is considered a less-developed country and has the following characteristics.Which one is not typical of a less-developed country?

Accepted Answer

A)  High illiteracy. 
B)  High unemployment. 
C)  Rapid growth of technology. 
D)  Low growth in technology. 
E)  Rapid population growth. 
A)  High illiteracy. 
B)  High unemployment. 
C)  Rapid growth of technology. 
D)  Low growth in technology. 
E)  Rapid population growth.

Question 6

The vicious circle of poverty is the trap that parents with low education tend to have children with low education.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a problem when comparing GDPs per capita between nations?

Accepted Answer

A)  GDP per capita fails to measure income distribution. 
B)  Fluctuations in exchange rates affect differences in GDP per capita. 
C)  GDP per capita is subject to greater measurement errors for LDCs compared to IACs. 
D)  All of the above. 
A)  GDP per capita fails to measure income distribution. 
B)  Fluctuations in exchange rates affect differences in GDP per capita. 
C)  GDP per capita is subject to greater measurement errors for LDCs compared to IACs. 
D)  All of the above.

Question 8

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 9

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 10

According to the classification in the text,which of the following is not an industrially advanced country (IAC)?

Accepted Answer

A)  United Arab Emirates. 
B)  Israel. 
C)  Greece. 
D)  All of the above are IACs. 
E)  None of the above are IACs. 
A)  United Arab Emirates. 
B)  Israel. 
C)  Greece. 
D)  All of the above are IACs. 
E)  None of the above are IACs.

Question 11

Receipt of foreign aid permits less-developed countries to move to a point outside their production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 12

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 13

According to the text,Ireland and Israel are classified as industrially advanced countries (IACs).

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

One reason that a poor nation remains poor over time is that even though total national real GDP grows,

Accepted Answer

A) c and e. 
B) c,d,and e. 
C) it is too small to begin with. 
D) the growth rate is smaller than the growth rate of industrialized nations. 
E) it does not grow faster than population. 
A) c and e. 
B) c,d,and e. 
C) it is too small to begin with. 
D) the growth rate is smaller than the growth rate of industrialized nations. 
E) it does not grow faster than population.

Question 16

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 17

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 18

If a nation remains poor over time,it could be that:

Accepted Answer

A) c and e. 
B) d and e. 
C) the population growth rate is at least as much as the national GDP growth rate. 
D) the per capita real GDP growth rate is larger than the population growth rate. 
E) the national real GDP growth rate is lower than the population growth rate. 
A) c and e. 
B) d and e. 
C) the population growth rate is at least as much as the national GDP growth rate. 
D) the per capita real GDP growth rate is larger than the population growth rate. 
E) the national real GDP growth rate is lower than the population growth rate.

Question 19

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 20

If a country's population grows at the same rate as its real GDP,then real per capita GDP:

Accepted Answer

A)  grows at an increasing rate. 
B)  grows at a constant rate. 
C)  doesn't change. 
D)  decreases at a decreasing rate. 
E)  decreases at a constant rate. 
A)  grows at an increasing rate. 
B)  grows at a constant rate. 
C)  doesn't change. 
D)  decreases at a decreasing rate. 
E)  decreases at a constant rate.

Exam 23: Growth and the Less-Developed Countries

Economic development encompasses which of the following measures?

If a country's population growth rate exceeds the growth rate in its GDP,which of the following is true?

Which of the following is most important if the living standards of people residing in a country are going to improve?

According to the classification in the text,which of the following is not an industrially advanced country (IAC)?

The nation of Exland is considered a less-developed country and has the following characteristics.Which one is not typical of a less-developed country?

The vicious circle of poverty is the trap that parents with low education tend to have children with low education.

Which of the following is a problem when comparing GDPs per capita between nations?

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

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

According to the classification in the text,which of the following is not an industrially advanced country (IAC)?

Receipt of foreign aid permits less-developed countries to move to a point outside their production possibilities curve.

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

According to the text,Ireland and Israel are classified as industrially advanced countries (IACs).

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

One reason that a poor nation remains poor over time is that even though total national real GDP grows,

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

Which of the following statements is true?

If a nation remains poor over time,it could be that:

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

If a country's population grows at the same rate as its real GDP,then real per capita GDP:

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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