Question 1

Capital flight refers to

Accepted Answer

A)  the tendency of large corporations of IACs to build new plants in the DVCs because labor is cheaper.
B)  DVC citizens accumulating or investing their savings in the IACs.
C)  the high international mobility of speculative funds caused by variations in exchange rates.
D)  the tendency of DVCs to overinvest in commercial aircraft.E) A) and B)
F) A) and C)

Question 2

The corruption and poor administration that are common to the public sectors of many DVCs suggest that government may not be very effective in promoting economic growth.

Accepted Answer

A) True 
 B)False

Question 3

In 2018, Wal-Mart's annual revenues were greater than the national incomes of

Accepted Answer

A)  the United States.
B)  Germany.
C)  all but 23 nations.
D)  all nations except for the 5 largest ones.E) B) and D)
F) All of the above

Question 4

If population is expanding at the same rate as real output,

Accepted Answer

A)  real per capita output will increase.
B)  real per capita output will decrease.
C)  real per capita output will remain unchanged.
D)  living standards will increase.E) A) and B)
F) None of the above

Question 5

The role of government in fostering economic growth in DVCs has been criticized because

Accepted Answer

A)  most governments operate as dictatorships.
B)  there is often poor administration and corruption in government.
C)  government is generally supportive of business at the expense of labor.
D)  governments have adopted the unpopular method of forced savings to stimulate investment.E) None of the above
F) B) and C)

Question 6

Government can play a major positive role in the early stage of economic development by

Accepted Answer

A)  providing adequate infrastructure.
B)  establishing price controls for products.
C)  promoting exports by subsidizing them.
D)  creating marketing boards for export products.E) All of the above
F) A) and B)

Question 7

The poorest 20 percent of the world's population receive what percentage of world income?

Accepted Answer

A)  less than 2 percent
B)  about 4 percent
C)  around 8 percent
D)  close to 10 percentE) B) and C)
F) All of the above

Question 8

What is the natural resource problem in DVCs?

Accepted Answer

The distribution of natural resources is...

Question 9

Which of the following is characteristic of DVCs?

Accepted Answer

A)  A large percentage of the labor force is in agriculture.
B)  There are high levels of saving and investment.
C)  They have high labor productivity.
D)  There are high levels of training.E) A) and B)
F) B) and C)

Question 10

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

A)  shift the production possibilities curve for a nation outward.
B)  increase the demand for and decrease the supply of productive resources.
C)  make a nation less productive because of the need to coordinate the increased quantity of resources.
D)  lead to increased population growth that will decrease the per capita growth in a nation.E) B) and C)
F) None of the above

Question 11

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of

Accepted Answer

A)  foreign aid.
B)  capital-saving investment.
C)  in-kind investment.
D)  technological advance.E) C) and D)
F) All of the above

Question 12

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Accepted Answer

A) True 
 B)False

Question 13

If a local leader in a developing nation claims that there is little or no correlation between a person's efforts and the economic rewards that are given to that person, this leader is most likely expressing a

Accepted Answer

A)  description of the vicious cycle of poverty.
B)  theory of exploitation and dependence.
C)  capricious view of the universe.
D)  rationale for neocolonialism.E) All of the above
F) A) and B)

Question 14

Which of the following is a factor limiting saving in DVCs?

Accepted Answer

A)  the lack of foreign aid and loans from the World Bank
B)  Governments control the banking system and set low interest rates.
C)  the flight of private savings to investments in IACs, where there is less risk
D)  Those who do save make their savings available only to their families, who use it for consumption.E) C) and D)
F) A) and B)

Question 15

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

Accepted Answer

A) True 
 B)False

Question 16

One suggested policy that industrially advanced nations could adopt to foster economic growth in less-developed nations would be to

Accepted Answer

A)  leave the responsibility to the World Bank.
B)  direct foreign aid to the poorest DVCs.
C)  recruit more skilled workers from DVCs.
D)  target the banking sector for the most help.E) All of the above
F) A) and B)

Question 17

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  encouraging direct foreign investment
B)  opening economies to world trade
C)  establishing independent central banks
D)  encouraging emigration of highly skilled workersE) B) and C)
F) A) and D)

Question 19

To stimulate economic growth, it would be best if developing countries adopted policies to

Accepted Answer

A)  discourage foreign investment.
B)  subsidize state industries.
C)  build more human capital.
D)  increase population growth.E) A) and C)
F) None of the above

Question 20

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 percentE) A) and B)
F) B) and C)

Exam 28: The Economics of Developing Countries

Capital flight refers to

Correct AnswerverifiedShow Answer

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Correct AnswerverifiedShow Answer

The corruption and poor administration that are common to the public sectors of many DVCs suggest that government may not be very effective in promoting economic growth.

Correct AnswerverifiedShow Answer

The poorest 20 percent of the world's population receive what percentage of world income?

Correct AnswerverifiedShow Answer

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Correct AnswerverifiedShow Answer

Which of the following is characteristic of DVCs?

Correct AnswerverifiedShow Answer

What is the natural resource problem in DVCs?

Correct AnswerverifiedThe distribution of natural resources is...View AnswerShow Answer

If population is expanding at the same rate as real output,

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

Correct AnswerverifiedShow Answer

One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries.

Correct AnswerverifiedShow Answer

The role of government in fostering economic growth in DVCs has been criticized because

Correct AnswerverifiedShow Answer

To stimulate economic growth, it would be best if developing countries adopted policies to

Correct AnswerverifiedShow Answer

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Correct AnswerverifiedShow Answer

One suggested policy that industrially advanced nations could adopt to foster economic growth in less-developed nations would be to

Correct AnswerverifiedShow Answer

Government can play a major positive role in the early stage of economic development by

Correct AnswerverifiedShow Answer

In 2018, Wal-Mart's annual revenues were greater than the national incomes of

Correct AnswerverifiedShow Answer

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) ?

Correct AnswerverifiedShow Answer

If a local leader in a developing nation claims that there is little or no correlation between a person's efforts and the economic rewards that are given to that person, this leader is most likely expressing a

Correct AnswerverifiedShow Answer

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of

Correct AnswerverifiedShow Answer

Which of the following is a factor limiting saving in DVCs?

Correct AnswerverifiedShow Answer

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The distribution of natural resources is...
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