Question 1

Making "soft loans"-loans that may not be self-liquidating-to the very poorest of the developing countries on relatively liberal terms is the primary function of the

Accepted Answer

A)  United Nations.
B)  International Finance Corporation.
C)  New Global Compact.
D)  International Development Association.E) None of the above
F) B) and C)

Question 2

Which of the given nations would be middle-income developing countries (DVCs) , according to the World Bank?

Accepted Answer

A)  country E only
B)  countries A, D, and E
C)  countries D and E
D)  country D onlyE) A) and C)
F) All of the above

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 flourishE) B) and D)
F) B) and C)

Question 4

A major criticism of foreign aid to developing nations is that it

Accepted Answer

A)  provides incentives to reduce the role of government.
B)  is capital-using rather than capital-saving when it is spent.
C)  encourages dependency rather than self-sustained growth.
D)  leads to widespread underemployment and unemployment.E) A) and B)
F) B) and D)

Question 5

An obstacle to economic growth in developing countries is

Accepted Answer

A)  the limited demand for natural resources.
B)  the limited supply of capital goods.
C)  a decline in population growth.
D)  the low productivity of capital.E) A) and B)
F) A) and C)

Question 6

Which of the following is not part of a nation's infrastructure?

Accepted Answer

A)  communications facilities
B)  roads, highways, and bridges
C)  the electrical power system
D)  industrial plants and equipmentE) A) and D)
F) A) and C)

Question 7

China is close to catching up with the United States in its standard of living as measured by per capita income.

Accepted Answer

A) True 
 B)False

Question 8

The population growth rate of the DVCs (developing countries)  as a group in recent decades has been

Accepted Answer

A)  steady.
B)  declining.
C)  rising modestly.
D)  rising rapidly.E) A) and B)
F) B) and D)

Question 9

DVCs tend to have permanent shortages of farm labor.

Accepted Answer

A) True 
 B)False

Question 10

In recent years, U.S.foreign aid has been

Accepted Answer

A)  less than one-quarter of 1 percent of its output.
B)  about 1 percent of its output.
C)  about 3 percent of its output.
D)  about 5 percent of its output.E) A) and D)
F) B) and C)

Question 11

Refer to the table.Which of the following might reduce the per capita income gap between countries A and E?

Accepted Answer

A)  faster population growth in country A than in country E
B)  greater investment relative to GDP in country E than in country A
C)  more rapid improvement in literacy and education in country A than in country E
D)  increased capital flight from country A relative to that from country EE) B) and D)
F) B) and C)

Question 12

Small loans to entrepreneurs and small business owners in DVCs are referred to as

Accepted Answer

A)  human capital development projects.
B)  microcredit.
C)  capital flight promotion systems.
D)  incubator lending.E) None of the above
F) B) and C)

Question 13

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.E) A) and D)
F) C) and D)

Question 14

Per capita income in the United States in 2014 was about

Accepted Answer

A)  $25,300 per person.
B)  $36,300 per person.
C)  $55,200 per person.
D)  $68,800 per person.E) All of the above
F) A) and B)

Question 15

When technological advances are of the capital-using kind, it is possible for an economy to increase its productivity without any net investment in capital goods.

Accepted Answer

A) True 
 B)False

Question 16

Industrially advanced countries can best help developing countries by

Accepted Answer

A)  establishing price supports for the products produced by DVCs.
B)  increasing tariffs and quotas on products produced by DVCs.
C)  increasing the flows of private capital to DVCs.
D)  increasing control over DVCs' capital markets.E) B) and C)
F) A) and D)

Question 17

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

Accepted Answer

A)  declining death rates
B)  increasing birth rates
C)  reduced infant mortality
D)  decreasing life expectancyE) C) and D)
F) A) and B)

Question 18

More than 75 percent of the world's income is earned by what percentage of the world's population?

Accepted Answer

A)  5 percent
B)  10 percent
C)  20 percent
D)  40 percentE) None of the above
F) A) and D)

Question 19

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.E) B) and D)
F) A) and B)

Question 20

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.E) A) and B)
F) A) and D)

Exam 22: The Economics of Developing Countries

Making "soft loans"-loans that may not be self-liquidating-to the very poorest of the developing countries on relatively liberal terms is the primary function of the

Correct AnswerverifiedShow Answer

A major criticism of foreign aid to developing nations is that it

Correct AnswerverifiedShow Answer

China is close to catching up with the United States in its standard of living as measured by per capita income.

Correct AnswerverifiedShow Answer

Which of the following is not part of a nation's infrastructure?

Correct AnswerverifiedShow Answer

Which of the given nations would be middle-income developing countries (DVCs) , according to the World Bank?

Correct AnswerverifiedShow Answer

Small loans to entrepreneurs and small business owners in DVCs are referred to as

Correct AnswerverifiedShow Answer

An obstacle to economic growth in developing countries is

Correct AnswerverifiedShow Answer

Refer to the table.Which of the following might reduce the per capita income gap between countries A and E?

Correct AnswerverifiedShow Answer

When technological advances are of the capital-using kind, it is possible for an economy to increase its productivity without any net investment in capital goods.

Correct AnswerverifiedShow Answer

Per capita income in the United States in 2014 was about

Correct AnswerverifiedShow Answer

The government of a DVC may purposely cause inflation because

Correct AnswerverifiedShow Answer

Capital flight from the DVCs may be caused by

Correct AnswerverifiedShow Answer

More than 75 percent of the world's income is earned by what percentage of the world's population?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

In recent years, U.S.foreign aid has been

Correct AnswerverifiedShow Answer

Industrially advanced countries can best help developing countries by

Correct AnswerverifiedShow Answer

The population growth rate of the DVCs (developing countries) as a group in recent decades has been

Correct AnswerverifiedShow Answer

DVCs tend to have permanent shortages of farm labor.

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

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

Correct AnswerverifiedShow Answer

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