Question 1

When a country follows an inward-oriented strategy, it tends to produce:

Accepted Answer

A) only tertiary goods. 
B) goods in which it has a comparative advantage. 
C) only labor-intensive goods. 
D) goods for which no export barriers exist. 
E) goods that replace foreign manufactured products. 
A) only tertiary goods. 
B) goods in which it has a comparative advantage. 
C) only labor-intensive goods. 
D) goods for which no export barriers exist. 
E) goods that replace foreign manufactured products. E

Question 2

Which of the following is considered a political obstacle to economic growth?

Accepted Answer

A) Few government subsidies 
B) Low foreign investment 
C) Lack of entrepreneurial talent 
D) Explosive population growth 
E) Insecure property rights 
A) Few government subsidies 
B) Low foreign investment 
C) Lack of entrepreneurial talent 
D) Explosive population growth 
E) Insecure property rights E

Question 3

The higher the death rates in less-developed countries, the smaller the average family size.

Accepted Answer

A) True 
 B)False  False

Question 4

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 5

Less-developed countries are experiencing rapid population growth because birthrates are on the rise and mortality rates are falling.

Accepted Answer

A) True 
 B)False

Question 6

The First World is made up of communist nations.

Accepted Answer

A) True 
 B)False

Question 7

Import substitution is the only strategy used by developing countries to develop their manufacturing industries.

Accepted Answer

A) True 
 B)False

Question 8

A country is moderately outward-oriented if there are relatively high import-substitution restrictions.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?

Accepted Answer

A) The country can produce more wheat than any other nation. 
B) The opportunity cost of producing wheat is lowest in the country. 
C) The price of wheat is lowest in that country. 
D) Domestic wheat is of the best quality in the world. 
E) The country can produce only wheat. 
A) The country can produce more wheat than any other nation. 
B) The opportunity cost of producing wheat is lowest in the country. 
C) The price of wheat is lowest in that country. 
D) Domestic wheat is of the best quality in the world. 
E) The country can produce only wheat.

Question 10

If foreign firms send profits back to their industrial countries from the developing countries, developing countries will have a larger deficit on their balance of payments accounts.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following coordinates and plans foreign aid programs and expenditures in the United Sates?

Accepted Answer

A) The Federal Reserve Board 
B) The Federal Open Market Committee 
C) The Agency for International Development 
D) The Bureau of Economic Analysis 
E) The U.S.Department of the Treasury 
A) The Federal Reserve Board 
B) The Federal Open Market Committee 
C) The Agency for International Development 
D) The Bureau of Economic Analysis 
E) The U.S.Department of the Treasury

Question 12

As of 2008, which of the following countries had a female literacy rate of less than 50%?

Accepted Answer

A) India 
B) Greece 
C) Finland 
D) Ethiopia 
E) Namibia 
A) India 
B) Greece 
C) Finland 
D) Ethiopia 
E) Namibia

Question 13

The Western European countries are a part of _____.

Accepted Answer

A) the First World 
B) the less-developed countries 
C) the Second World 
D) the Third World 
E) the developing world 
A) the First World 
B) the less-developed countries 
C) the Second World 
D) the Third World 
E) the developing world

Question 14

Generally, there is a strong positive correlation between per capita GNP and other measures of human development.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following limit the direct creation of new jobs through foreign investment?

Accepted Answer

A) Availability of large number of unemployed workers 
B) Nature of the industries in which investment is allowed 
C) Low cost of setting up the capital-intensive industries 
D) High percentage of youth in the country's population 
E) Regulation on technology transfer 
A) Availability of large number of unemployed workers 
B) Nature of the industries in which investment is allowed 
C) Low cost of setting up the capital-intensive industries 
D) High percentage of youth in the country's population 
E) Regulation on technology transfer

Question 16

While using an outward-oriented development strategy, the government in Taiwan did not make any attempt to stimulate exports.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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 19

Which of the following is an argument in favor of outward-oriented strategy?

Accepted Answer

A) Government deficit spending tend to fall. 
B) Domestic prices of imported goods tend to fall. 
C) The economy grows more rapidly through exports. 
D) The price of exported goods increase in the foreign markets. 
E) The supply of goods and services increase in the domestic market. 
A) Government deficit spending tend to fall. 
B) Domestic prices of imported goods tend to fall. 
C) The economy grows more rapidly through exports. 
D) The price of exported goods increase in the foreign markets. 
E) The supply of goods and services increase in the domestic market.

Question 20

Which of the following statements about the developing world is true?

Accepted Answer

A) Except for Latin America, most Third World citizens live in urban areas. 
B) The culture, politics, and geography of less-developed countries are very similar. 
C) Third World economies are largely dependent on manufacturing industries. 
D) The Third World is made up of noncommunist developing countries. 
E) About 80 percent of the population of developing countries lives in China and India. 
A) Except for Latin America, most Third World citizens live in urban areas. 
B) The culture, politics, and geography of less-developed countries are very similar. 
C) Third World economies are largely dependent on manufacturing industries. 
D) The Third World is made up of noncommunist developing countries. 
E) About 80 percent of the population of developing countries lives in China and India.

Exam 29: Development Economics

When a country follows an inward-oriented strategy, it tends to produce:

Which of the following is considered a political obstacle to economic growth?

The higher the death rates in less-developed countries, the smaller the average family size.

Foreign direct investment occurs when a company:

Less-developed countries are experiencing rapid population growth because birthrates are on the rise and mortality rates are falling.

The First World is made up of communist nations.

Import substitution is the only strategy used by developing countries to develop their manufacturing industries.

A country is moderately outward-oriented if there are relatively high import-substitution restrictions.

Which of the following holds true if a country is said to have a comparative advantage in the production of wheat?

If foreign firms send profits back to their industrial countries from the developing countries, developing countries will have a larger deficit on their balance of payments accounts.

Which of the following coordinates and plans foreign aid programs and expenditures in the United Sates?

As of 2008, which of the following countries had a female literacy rate of less than 50%?

The Western European countries are a part of _____.

Generally, there is a strong positive correlation between per capita GNP and other measures of human development.

Which of the following limit the direct creation of new jobs through foreign investment?

While using an outward-oriented development strategy, the government in Taiwan did not make any attempt to stimulate exports.

Which of the following is an obstacle to economic growth?

Which of the following can be categorized as multilateral aid?

Which of the following is an argument in favor of outward-oriented strategy?

Which of the following statements about the developing world is true?

Economics: The World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

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

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

the Land Market and Natural Resources

Aging, Social Security and Health Care

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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