Question 1

The very poorest low-income DVCs typically have relatively

Accepted Answer

A)  low rates of economic growth and relatively high rates of population growth. 
B)  high rates of economic growth and relatively low rates of population growth. 
C)  low rates of both population growth and economic growth. 
D)  high rates of both population growth and economic growth. 
A)  low rates of economic growth and relatively high rates of population growth. 
B)  high rates of economic growth and relatively low rates of population growth. 
C)  low rates of both population growth and economic growth. 
D)  high rates of both population growth and economic growth.

Question 2

Developing countries (DVCs) can be subdivided into the following groups except

Accepted Answer

A)  low-income economies. 
B)  high-income economies. 
C)  lower-middle-income economies. 
D)  upper-middle-income economies. 
A)  low-income economies. 
B)  high-income economies. 
C)  lower-middle-income economies. 
D)  upper-middle-income economies.

Question 3

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Accepted Answer

A) True 
 B)False

Question 4

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

A)  shift outward the production possibilities curve for a nation. 
B)  increase the demand for and decrease the supply of productive resources. 
C)  make a nation less productive because of the need to coordinate the increased quantity of resources. 
D)  lead to increased population growth that will decrease the per capita growth in a nation. 
A)  shift outward the production possibilities curve for a nation. 
B)  increase the demand for and decrease the supply of productive resources. 
C)  make a nation less productive because of the need to coordinate the increased quantity of resources. 
D)  lead to increased population growth that will decrease the per capita growth in a nation.

Question 5

If two nations have different per capita income levels and their rates of economic growth are identical, then the absolute per capita income differential

Accepted Answer

A)  will remain constant. 
B)  may either widen or diminish. 
C)  will diminish. 
D)  will widen. 
A)  will remain constant. 
B)  may either widen or diminish. 
C)  will diminish. 
D)  will widen.

Question 6

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following seems to be the most acute institutional problem that needs to be resolved by many DVCs?

Accepted Answer

A)  the use of capital-saving technology 
B)  development of natural resources 
C)  widespread political corruption 
D)  an increase in foreign aid 
A)  the use of capital-saving technology 
B)  development of natural resources 
C)  widespread political corruption 
D)  an increase in foreign aid

Question 8

Saving is low in many DVCs primarily because income is very equally distributed.

Accepted Answer

A) True 
 B)False

Question 9

Population growth remains high in most DVCs

Accepted Answer

A)  because religious and sociocultural considerations favor large families. 
B)  because children may provide economic security for aging parents. 
C)  because children provide agricultural labor in rural areas. 
D)  for all of these reasons. 
A)  because religious and sociocultural considerations favor large families. 
B)  because children may provide economic security for aging parents. 
C)  because children provide agricultural labor in rural areas. 
D)  for all of these reasons.

Question 10

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

Accepted Answer

A)  the technologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital. 
B)  the resource endowments of the IACs and the DVCs are highly similar. 
C)  international patent laws prohibit such transfers. 
D)  the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital. 
A)  the technologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital. 
B)  the resource endowments of the IACs and the DVCs are highly similar. 
C)  international patent laws prohibit such transfers. 
D)  the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital.

Question 11

Capital flight from the DVCs may be caused by

Accepted Answer

A)  a fear of government privatization efforts. 
B)  slow domestic inflation. 
C)  low rates of domestic taxation. 
D)  risks of severe fluctuations in exchange rates. 
A)  a fear of government privatization efforts. 
B)  slow domestic inflation. 
C)  low rates of domestic taxation. 
D)  risks of severe fluctuations in exchange rates.

Question 12

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

Accepted Answer

A) True 
 B)False

Question 13

Successful foreign aid programs

Accepted Answer

A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D)  cause a DVC's exchange rate to depreciate. 
A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D)  cause a DVC's exchange rate to depreciate.

Question 14

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

Accepted Answer

A)  in-kind investment. 
B)  the capricious universe view. 
C)  human capital investment. 
D)  the will to develop. 
A)  in-kind investment. 
B)  the capricious universe view. 
C)  human capital investment. 
D)  the will to develop.

Question 15

(Last Word) Providing poor families with grants if they send their children to school and get proper medical care is known as

Accepted Answer

A)  microcredit. 
B)  in-kind transfers. 
C)  unconditional cash transfers. 
D)  conditional cash transfers. 
A)  microcredit. 
B)  in-kind transfers. 
C)  unconditional cash transfers. 
D)  conditional cash transfers.

Question 16

Microfinance or microcredit can help directly support

Accepted Answer

A)  labor or workers. 
B)  local governments. 
C)  entrepreneurs. 
D)  consumers. 
A)  labor or workers. 
B)  local governments. 
C)  entrepreneurs. 
D)  consumers.

Question 17

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

Accepted Answer

A)  low trade barriers 
B)  large international debts 
C)  an increase in the rate of saving 
D)  a slowing of population growth 
A)  low trade barriers 
B)  large international debts 
C)  an increase in the rate of saving 
D)  a slowing of population growth

Question 18

Capital flight is a problem to DVCs because it

Accepted Answer

A)  causes the value of a DVC's currency to appreciate. 
B)  reduces the volume of DVC investment. 
C)  reduces the flow of foreign aid from the IACs. 
D)  causes inflation in the DVCs. 
A)  causes the value of a DVC's currency to appreciate. 
B)  reduces the volume of DVC investment. 
C)  reduces the flow of foreign aid from the IACs. 
D)  causes inflation in the DVCs.

Question 19

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

Accepted Answer

A) True 
 B)False

Question 20

Which organization primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools?

Accepted Answer

A)  the World Bank 
B)  the New Economic Order 
C)  the Federal Reserve System 
D)  the Committee on Economic Development 
A)  the World Bank 
B)  the New Economic Order 
C)  the Federal Reserve System 
D)  the Committee on Economic Development

Exam 28: The Economics of Developing Countries

The very poorest low-income DVCs typically have relatively

Developing countries (DVCs) can be subdivided into the following groups except

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

If two nations have different per capita income levels and their rates of economic growth are identical, then the absolute per capita income differential

Most of the DVCs of the world are located in Western Europe.

Which of the following seems to be the most acute institutional problem that needs to be resolved by many DVCs?

Saving is low in many DVCs primarily because income is very equally distributed.

Population growth remains high in most DVCs

It is sometimes difficult to transfer the advanced technologies of the industrialized nations to the DVCs because

Capital flight from the DVCs may be caused by

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

Successful foreign aid programs

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

(Last Word) Providing poor families with grants if they send their children to school and get proper medical care is known as

Microfinance or microcredit can help directly support

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

Capital flight is a problem to DVCs because it

One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.

Which organization primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

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