Question 1

Most developing countries (DVCs)  exhibit a low level of

Accepted Answer

A)  illiteracy.
B)  population growth.
C)  life expectancy.
D)  infant mortality.

Question 2

A recommended policy for developing countries to stimulate economic growth would be

Accepted Answer

A)  abolishing central banks.
B)  more central planning by government.
C)  encouraging more direct foreign investment.
D)  expanding employment in state industries.

Question 3

Which attitude or custom is the most conducive to long-term economic growth?

Accepted Answer

A)  a focus on group contentment rather than individual achievement
B)  the belief that there is little or no correlation between an individual's economic actions and her or his economic fortunes
C)  the belief that there is a direct connection between individual efforts (including educational efforts)  and economic rewards
D)  the use of the majority of resources for religious structures and ceremonies

Question 4

Developing nations tend to have a large entrepreneurial class but not sufficient capital investment.

Accepted Answer

A) True 
 B)False

Question 5

A factor that limits the amount of saving in developing countries is the fact that

Accepted Answer

A)  the banking system does not encourage saving.
B)  there is too much foreign aid, so savings is not needed.
C)  the level of aggregate domestic output is low.
D)  the government controls financial institutions and makes it difficult for people to save.

Question 6

One of the essential paths to economic growth is

Accepted Answer

A)  increasing population growth.
B)  expanding the role of government.
C)  using existing resources more efficiently.
D)  expanding tax credits for business investment.

Question 7

When economists refer to capital flight, they are speaking of an

Accepted Answer

A)  outflow of financial capital from a certain country.
B)  outflow of real capital from a certain country.
C)  outflow of financial and real capital from a certain country.
D)  outflow of human capital from a certain country.

Question 8

If the real outputs per capita of a rich nation and a poor nation grow at the same percentage rate, the absolute income gap between the two nations will shrink.

Accepted Answer

A) True 
 B)False

Question 9

One major path that leads to growth in both developing nations (DVCs)  as well industrially advanced nations (IACs)  is that productive resources must be

Accepted Answer

A)  owned and managed by the public sector.
B)  distributed more equitably across business sectors.
C)  reallocated to export industries.
D)  used more efficiently.

Question 10

Which of the following IACs (industrially advanced countries)  gave the largest share of its GDP to foreign aid or development assistance to DVCs (developing countries)  in 2015?

Accepted Answer

A)  Sweden
B)  Japan
C)  United States
D)  Germany

Question 11

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015) ?

Accepted Answer

A)  the United States
B)  Norway
C)  Sweden
D)  Netherlands

Question 12

Per capita incomes must first grow for birth rates to decline.This statement describes the

Accepted Answer

A)  human capital view of population growth.
B)  traditional view of population growth.
C)  capricious universe view.
D)  demographic transition view of population growth.

Question 13

Which of the following describes the vicious circle of poverty?

Accepted Answer

A)  Government spending for public goods is inflationary, and this undermines incentives to save and invest.
B)  Higher incomes increase consumption at the expense of capital accumulation, which causes income to fall.
C)  Low per capita incomes cause low levels of saving and investment, which mean low productivity and therefore low incomes.
D)  A growing national income increases the demand for money, which increases the interest rate and reduces investment.

Question 14

Examples of low-income developing countries are

Accepted Answer

A)  Switzerland, New Zealand, and Australia.
B)  Germany, Austria, and Italy.
C)  Chad, Bangladesh, and Ethiopia.
D)  Mexico, South Korea, and Brazil.

Question 15

In recent years, the industrially advanced nations as a group have provided foreign aid amounting to about what percentage of their aggregate outputs?

Accepted Answer

A)  0.25 percent
B)  0.7 percent
C)  1 percent
D)  2 percent

Question 16

The DVCs are

Accepted Answer

A)  located primarily in Northern Europe.
B)  located primarily in Western Europe.
C)  located primarily in Africa, Asia, and Latin America.
D)  more or less evenly distributed over the various continents.

Question 17

Low-income developing countries generally have the following characteristics except

Accepted Answer

A)  low population growth rates.
B)  low levels of industrialization.
C)  dependency on exports of agricultural products or raw materials.
D)  minimal amounts of capital resources.

Question 18

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

Question 19

Which of the following factors contributes most to the high per capita incomes in developed nations?

Accepted Answer

A)  high rates of population growth
B)  high rates of economic growth
C)  low rates of investment
D)  low rates of saving

Question 20

In recent years, a greater proportion of private capital flows to DVCs has been direct foreign investment rather than loans to DVC governments.

Accepted Answer

A) True 
 B)False

Exam 22: The Economics of Developing Countries

Which attitude or custom is the most conducive to long-term economic growth?

Correct AnswerverifiedShow Answer

Which of the following IACs (industrially advanced countries) gave the largest share of its GDP to foreign aid or development assistance to DVCs (developing countries) in 2015?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Developing nations tend to have a large entrepreneurial class but not sufficient capital investment.

Correct AnswerverifiedShow Answer

One of the essential paths to economic growth is

Correct AnswerverifiedShow Answer

In recent years, a greater proportion of private capital flows to DVCs has been direct foreign investment rather than loans to DVC governments.

Correct AnswerverifiedShow Answer

Per capita incomes must first grow for birth rates to decline.This statement describes the

Correct AnswerverifiedShow Answer

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015) ?

Correct AnswerverifiedShow Answer

Most developing countries (DVCs) exhibit a low level of

Correct AnswerverifiedShow Answer

The DVCs are

Correct AnswerverifiedShow Answer

Low-income developing countries generally have the following characteristics except

Correct AnswerverifiedShow Answer

If the real outputs per capita of a rich nation and a poor nation grow at the same percentage rate, the absolute income gap between the two nations will shrink.

Correct AnswerverifiedShow Answer

Examples of low-income developing countries are

Correct AnswerverifiedShow Answer

Which of the following describes the vicious circle of poverty?

Correct AnswerverifiedShow Answer

A recommended policy for developing countries to stimulate economic growth would be

Correct AnswerverifiedShow Answer

In recent years, the industrially advanced nations as a group have provided foreign aid amounting to about what percentage of their aggregate outputs?

Correct AnswerverifiedShow Answer

Which of the following factors contributes most to the high per capita incomes in developed nations?

Correct AnswerverifiedShow Answer

A factor that limits the amount of saving in developing countries is the fact that

Correct AnswerverifiedShow Answer

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Correct AnswerverifiedShow Answer

When economists refer to capital flight, they are speaking of an

Correct AnswerverifiedShow Answer

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