Question 1

What is needed to aid capital formation in developing countries?

Accepted Answer

A)   More capital flight
B)   More oil resources
C)   More entrepreneurship
D)   Higher price supports for productsE) B) and D)
F) B) and C)

Question 2

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) A) and D)
F) B) and C)

Question 3

More than 80 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) C) and D)
F) B) and D)

Question 4

Per capita income in the United States in 2010 was how many times greater than that in China?

Accepted Answer

A)   3 times
B)   6 times
C)   11 times
D)   17 timesE) B) and C)
F) A) and D)

Question 5

Based on population and economic development trends, the world population is expected to ____ in the last part of this century.

Accepted Answer

A)   Explode
B)   Increase mildly
C)   Become stable and constant
D)   DeclineE) A) and C)
F) A) and B)

Question 6

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

Accepted Answer

A)   The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC
B)   Capital flight reduces investment opportunities and the need for saving in DVCs
C)   There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving
D)   The domestic output of DVCs is so low that the absolute volume of saving is smallE) All of the above
F) B) and D)

Question 7

Which of the following IACs (industrially advanced countries)  gave the smallest share of its GDP to foreign aid or development assistance to DVCs (developing countries)  in 2012?

Accepted Answer

A)   United States
B)   Japan
C)   Canada
D)   GermanyE) A) and C)
F) A) and B)

Question 8

Making "soft loans"-loans which 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 AssociationE) None of the above
F) C) and D)

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)   Increased at the same rate as the population grows
B)   Distributed more equitably across business sectors
C)   Reallocated to export industries
D)   Used more efficientlyE) A) and B)
F) A) and C)

Question 10

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 resourcesE) B) and C)
F) A) and D)

Question 11

Population expansion can impede economic development for the following reasons, except:

Accepted Answer

A)   Reduced saving and investment rates
B)   Reduced productivity of labor
C)   Larger supply of labor
D)   Contribution to urban congestion and problemsE) C) and D)
F) All of the above

Question 12

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

Accepted Answer

A) True 
 B)False

Question 13

The traditional view regarding population and growth in DVCs is that:

Accepted Answer

A)   The most important factor affecting population growth in DVCs is per capita consumption of energy
B)   Unemployment and underemployment are the major sources of population growth in DVCs
C)   Reduced birthrates must come first in DVCs, and then higher per capita incomes will follow
D)   Higher per capita incomes must come first in DVCs, and then reduced birth rates will followE) B) and D)
F) All of the above

Question 14

Most developing countries (DVCs)  exhibit a low level of:

Accepted Answer

A)   Illiteracy
B)   Population growth
C)   Life expectancy
D)   Infant mortalityE) C) and D)
F) B) and D)

Question 15

An institutional change that is needed in most developing nations is:

Accepted Answer

A)   The will to develop
B)   Reduced foreign aid
C)   Birth control
D)   Land reformE) A) and C)
F) A) and D)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

One reason why foreign aid is viewed as harmful is that it promotes dependency.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 helpE) A) and B)
F) None of the above

Question 20

The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

Accepted Answer

A) True 
 B)False

Exam 22: The Economics of Developing Countries

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

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

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The traditional view regarding population and growth in DVCs is that:

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An institutional change that is needed in most developing nations is:

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More than 80 percent of the world's income is earned by what percentage of the world's population?

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What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

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The vicious circle of poverty implies that there is no way to break the circle; the poor nations will always remain poor.

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One reason why foreign aid is viewed as harmful is that it promotes dependency.

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What is needed to aid capital formation in developing countries?

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Per capita income in the United States in 2010 was how many times greater than that in China?

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

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

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Population expansion can impede economic development for the following reasons, except:

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Most developing countries (DVCs) exhibit a low level of:

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

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Which of the following IACs (industrially advanced countries) gave the smallest share of its GDP to foreign aid or development assistance to DVCs (developing countries) in 2012?

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Based on population and economic development trends, the world population is expected to ____ in the last part of this century.

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Making "soft loans"-loans which 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

Low-income developing countries generally have the following characteristics, except:

Correct AnswerverifiedShow Answer

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

Correct AnswerverifiedShow Answer

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