Question 1

Which of these sets of countries has the greatest degree of internal corruption as of 2015, according to Transparency International?

Accepted Answer

A)  Somalia, Afghanistan, and North Korea
B)  Finland, Denmark, and New Zealand
C)  Spain, Greece, and Italy
D)  Mexico, China, and Russia

Question 2

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

Accepted Answer

A)  increase by about $83.
B)  decrease by about $83.
C)  remained unchanged.
D)  decrease by about $19.

Question 3

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Accepted Answer

A)  capital using.
B)  capital saving.
C)  capital intensive.
D)  an in-kind investment.

Question 4

Assume the total real output of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next.Over the year, per capita income has

Accepted Answer

A)  increased by $25 per person.
B)  decreased by $25 per person.
C)  increased by $533 per person.
D)  decreased by $533 per person.

Question 5

The basic role of the International Finance Corporation is to

Accepted Answer

A)  make loans to governments in developing nations.
B)  invest in private enterprises in developing nations.
C)  finance exports from the United States to developing nations.
D)  make loans to the World Bank, which in turn makes loans to governments in developing nations.

Question 6

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.

Question 7

Suppose that the average annual rate of population increase in Econland in recent years was about 2 percent.Based on this rate of growth, the population of Econland will double in about

Accepted Answer

A)  7 years.
B)  11 years.
C)  35 years.
D)  46 years.

Question 8

An example of direct foreign investment would be the building of a motorcycle factory in China by Honda Motors.

Accepted Answer

A) True 
 B)False

Question 9

Investment in-kind refers to the possibility that

Accepted Answer

A)  DVCs will invest for the purpose of becoming less dependent on world markets.
B)  a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program.
C)  newly established manufacturing firms may expand by reinvesting their profits.
D)  surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams.

Question 10

(Last Word)  Early experience with conditional cash transfers has revealed that

Accepted Answer

A)  most of these cash transfers available go unused because parents donâ€™t want to fulfill the requirements.
B)  there is no significant improvement in nutrition and health compared to nonrecipients.
C)  they encourage school enrollment, but poor-quality schools limit the ability to lift people out of poverty.
D)  the resulting improvements in education and health give the recipients a significant earnings advantage over nonrecipients.

Question 11

Brazil, Mexico, and Thailand are referred to as

Accepted Answer

A)  industrially advanced countries.
B)  upper-middle-income developing countries.
C)  low-income developing countries.
D)  command economies.

Question 12

Foreign aid to the DVCs has been criticized

Accepted Answer

A)  because it may generate economic dependence on the IACs.
B)  because it encourages the centralization of government power over the economy.
C)  because government corruption in the DVCs causes aid to be misused.
D)  for all of these reasons.

Question 13

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 14

Which of the following would be an example of direct foreign investment in DVCs?

Accepted Answer

A)  a grant from the World Bank to build an irrigation project in Kenya
B)  the financing of a new chemical plant in Peru by a German company
C)  a low-interest loan from the U.S.government to Turkey to purchase military hardware
D)  a loan from the Japanese government to the Indonesian government to pay for electronic equipment

Question 15

Infrastructure is best illustrated by

Accepted Answer

A)  farm equipment.
B)  school buildings and highways.
C)  machinery and equipment for the production of consumer goods.
D)  government tax revenues.Accessibility: Keyboard Navigation

Question 16

The government of a DVC may purposely cause inflation because

Accepted Answer

A)  a rapid rate of inflation attracts private foreign capital into a DVC.
B)  there is conclusive evidence that inflation discourages people from having large families.
C)  this will strengthen the nation's position in international markets.
D)  inflation works like taxation in that it may release resources from consumption so that they can be invested.

Question 17

Without an abundant endowment of natural resources, a nation cannot achieve rapid economic growth.

Accepted Answer

A) True 
 B)False

Question 18

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

Question 19

The demographic transition view alleges that

Accepted Answer

A)  the DVCs must first accept the use of birth control techniques to increase their standards of living.
B)  population growth will decline only if mortality rates exceed birth rates.
C)  if incomes first rise, population growth will then decline.
D)  population growth has no bearing on a nation's per capita income.

Question 20

Underemployment occurs

Accepted Answer

A)  when workers do not have jobs.
B)  when farm workers become more productive.
C)  when workers are working fewer hours than they desire or when they are working less productively than they are capable of.
D)  in IACs but not in the DVCs.

Exam 42: The Economics of Developing Countries

Infrastructure is best illustrated by

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

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Assume the total real output of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next.Over the year, per capita income has

Correct AnswerverifiedShow Answer

Foreign aid to the DVCs has been criticized

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The demographic transition view alleges that

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An example of direct foreign investment would be the building of a motorcycle factory in China by Honda Motors.

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Brazil, Mexico, and Thailand are referred to as

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Investment in-kind refers to the possibility that

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Which of these sets of countries has the greatest degree of internal corruption as of 2015, according to Transparency International?

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Which of the following would be an example of direct foreign investment in DVCs?

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The government of a DVC may purposely cause inflation because

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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

Suppose that the average annual rate of population increase in Econland in recent years was about 2 percent.Based on this rate of growth, the population of Econland will double in about

Correct AnswerverifiedShow Answer

(Last Word) Early experience with conditional cash transfers has revealed that

Correct AnswerverifiedShow Answer

The basic role of the International Finance Corporation is to

Correct AnswerverifiedShow Answer

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

Correct AnswerverifiedShow Answer

The very poorest low-income DVCs typically have relatively

Correct AnswerverifiedShow Answer

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Correct AnswerverifiedShow Answer

Without an abundant endowment of natural resources, a nation cannot achieve rapid economic growth.

Correct AnswerverifiedShow Answer

Underemployment occurs

Correct AnswerverifiedShow Answer

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