Question 1

Over the next 15 years, out of every 10 people added to the world's population will be born in developing countries.

Accepted Answer

A)  6 
B)  7 
C)  8 
D)  9 
A)  6 
B)  7 
C)  8 
D)  9

Question 2

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

Accepted Answer

A)  population growth for a greater labor supply. 
B)  output and slow down their population growth. 
C)  birth rates to expand their available resources. 
D)  mortality rates to slow down their population growth. 
A)  population growth for a greater labor supply. 
B)  output and slow down their population growth. 
C)  birth rates to expand their available resources. 
D)  mortality rates to slow down their population growth.

Question 3

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

Accepted Answer

A)  the infrastructure provided by government 
B)  the abundance of entrepreneurs who need to be regulated 
C)  the need to encourage saving and investment in the economy 
D)  the provision of law and order so that commerce can flourish 
A)  the infrastructure provided by government 
B)  the abundance of entrepreneurs who need to be regulated 
C)  the need to encourage saving and investment in the economy 
D)  the provision of law and order so that commerce can flourish

Question 4

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not a DVC policy likely to increase DVC economic growth?

Accepted Answer

A)  encouraging direct foreign investment 
B)  opening economics to world trade 
C)  establishing independent central banks 
D)  encouraging emigration of highly skilled workers 
A)  encouraging direct foreign investment 
B)  opening economics to world trade 
C)  establishing independent central banks 
D)  encouraging emigration of highly skilled workers

Question 6

Government-provided foreign aid to developing countries

Accepted Answer

A)  has averaged about 1 percent of the IACs' GDP each year. 
B)  has increased sharply and steadily since 1995. 
C)  has dwarfed the size of foreign direct investment to the DVCs in recent years. 
D)  declined in the late 1990s but increased from 2000 to 2008. 
A)  has averaged about 1 percent of the IACs' GDP each year. 
B)  has increased sharply and steadily since 1995. 
C)  has dwarfed the size of foreign direct investment to the DVCs in recent years. 
D)  declined in the late 1990s but increased from 2000 to 2008.

Question 7

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

Accepted Answer

A)  a capital-using technology. 
B)  a capital-saving technology. 
C)  capital consumption. 
D)  private capital flows. 
A)  a capital-using technology. 
B)  a capital-saving technology. 
C)  capital consumption. 
D)  private capital flows.

Question 8

A recommended policy for DVCs to implement that promotes economic growth is

Accepted Answer

A)  establishing realistic policies for exchange rates. 
B)  obtaining more low-interest loans from the U.S. government. 
C)  encouraging more tariffs and quotas to protect DVC businesses. 
D)  discouraging direct foreign investment to make DVCs more self-sufficient. 
A)  establishing realistic policies for exchange rates. 
B)  obtaining more low-interest loans from the U.S. government. 
C)  encouraging more tariffs and quotas to protect DVC businesses. 
D)  discouraging direct foreign investment to make DVCs more self-sufficient.

Question 9

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

Accepted Answer

A)  The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B)  Capital flight reduces investment opportunities and the need for saving in DVCs. 
C)  There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D)  The domestic output of DVCs is so low that the absolute volume of saving is small. 
A)  The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B)  Capital flight reduces investment opportunities and the need for saving in DVCs. 
C)  There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D)  The domestic output of DVCs is so low that the absolute volume of saving is small.

Question 10

The capricious universe view indicates that

Accepted Answer

A)  in the long run, "acts of God" have contained population growth and thus contributed to economic development. 
B)  DVCs will obtain biological and chemical weapons and force the redistribution of world wealth. 
C)  there is little or no correlation between one's efforts and the rewards he or she receives. 
D)  international and civil wars have been the primary impediment to growth. 
A)  in the long run, "acts of God" have contained population growth and thus contributed to economic development. 
B)  DVCs will obtain biological and chemical weapons and force the redistribution of world wealth. 
C)  there is little or no correlation between one's efforts and the rewards he or she receives. 
D)  international and civil wars have been the primary impediment to growth.

Question 11

At the beginning of the year, one developing country (DVC) has a real income per capita of $800. In a developed country (IAC), the real income per capita is $30,000. Both countries experience a 4 percent growth rate for the year. At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

Accepted Answer

A)  $30,368. 
B)  $31,200. 
C)  $30,120. 
D)  $32,032. 
A)  $30,368. 
B)  $31,200. 
C)  $30,120. 
D)  $32,032.

Question 12

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

Accepted Answer

A)  the IACs have patents on most of their technologies. 
B)  the IACs and the DVCs have much different resource endowments. 
C)  the technologies of the IACs rely heavily on unskilled labor. 
D)  IAC technologies are labor-intensive, while DVC technologies are capital-intensive. 
A)  the IACs have patents on most of their technologies. 
B)  the IACs and the DVCs have much different resource endowments. 
C)  the technologies of the IACs rely heavily on unskilled labor. 
D)  IAC technologies are labor-intensive, while DVC technologies are capital-intensive.

Question 13

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following countries had the highest per capita energy consumption in 2013?

Accepted Answer

A)  India 
B)  China 
C)  Japan 
D)  United States 
A)  India 
B)  China 
C)  Japan 
D)  United States

Question 15

The United States in 2014 had about

Accepted Answer

A)  1.8 percent of the world's population and generated about 10 percent of the world's output. 
B)  2.4 percent of the world's population and generated about 20 percent of the world's output. 
C)  4.4 percent of the world's population and generated about 22 percent of the world's output. 
D)  10 percent of the world's population and generated about 30 percent of the world's output. 
A)  1.8 percent of the world's population and generated about 10 percent of the world's output. 
B)  2.4 percent of the world's population and generated about 20 percent of the world's output. 
C)  4.4 percent of the world's population and generated about 22 percent of the world's output. 
D)  10 percent of the world's population and generated about 30 percent of the world's output.

Question 16

The World Bank

Accepted Answer

A)  provides military assistance to those nations interested in improving national defense. 
B)  makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools. 
C)  provides gold for DVCs that want to go on the gold standard. 
D)  provides short-term loans to DVCs that are incurring balance of payments deficits. 
A)  provides military assistance to those nations interested in improving national defense. 
B)  makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools. 
C)  provides gold for DVCs that want to go on the gold standard. 
D)  provides short-term loans to DVCs that are incurring balance of payments deficits.

Question 17

The population growth rate in IACs (industrially advanced countries) in 2000-2010 averaged 0.7 percent per year. This compares to what percentage growth per year in low- income DVCs (developing countries)?

Accepted Answer

A)  1.1 percent 
B)  2.1 percent 
C)  4.0 percent 
D)  0.4 percent 
A)  1.1 percent 
B)  2.1 percent 
C)  4.0 percent 
D)  0.4 percent

Question 18

Which of the following is a major obstacle to economic growth in DVCs?

Accepted Answer

A)  a fall in population growth 
B)  a decline in demographic transition 
C)  the low demand for natural resources 
D)  the low supply of saving 
A)  a fall in population growth 
B)  a decline in demographic transition 
C)  the low demand for natural resources 
D)  the low supply of saving

Question 19

Which of the following countries had the highest population growth rate in 2013-2014?

Accepted Answer

A)  United States 
B)  Pakistan 
C)  China 
D)  Venezuela 
A)  United States 
B)  Pakistan 
C)  China 
D)  Venezuela

Question 20

Which characteristic is most typical of human resources in developing nations?

Accepted Answer

A)  a small population base 
B)  low unemployment in urban areas 
C)  low unemployment in rural areas 
D)  high unemployment in urban areas 
A)  a small population base 
B)  low unemployment in urban areas 
C)  low unemployment in rural areas 
D)  high unemployment in urban areas

Exam 28: The Economics of Developing Countries

Over the next 15 years, out of every 10 people added to the world's population will be born in developing countries.

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

Which of the following is not a DVC policy likely to increase DVC economic growth?

Government-provided foreign aid to developing countries

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

A recommended policy for DVCs to implement that promotes economic growth is

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

The capricious universe view indicates that

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Which of the following countries had the highest per capita energy consumption in 2013?

The United States in 2014 had about

The World Bank

The population growth rate in IACs (industrially advanced countries) in 2000-2010 averaged 0.7 percent per year. This compares to what percentage growth per year in low- income DVCs (developing countries)?

Which of the following is a major obstacle to economic growth in DVCs?

Which of the following countries had the highest population growth rate in 2013-2014?

Which characteristic is most typical of human resources in developing nations?

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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