Question 1

Assume the total real income 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.E) A) and B)
F) A) and C)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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.E) All of the above
F) A) and B)

Question 4

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

Accepted Answer

A)   the IACs have patents on most of their technologies.
B)   the IACs and the DVCs have much different resource endowments.
C)   the technologies of the IACs rely heavily on unskilled labor.
D)   IAC technologies are labor-intensive, while DVC technologies are capital-intensive.E) None of the above
F) C) and D)

Question 5

An example of direct foreign investment is

Accepted Answer

A)   a U.S. bank granting a loan to a Guatemalan ﬁrm.
B)   General Motors building an auto production facility in China.
C)   a U.S. government foreign aid grant to Bangladesh.
D)   the purchase of debt issued by the Panamanian government.E) A) and C)
F) B) and C)

Question 6

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

Accepted Answer

A)   cutting debt relief for DVCs.
B)   directing foreign aid to the more aﬄuent DVCs.
C)   restricting immigration of low-skilled workers from DVCs.
D)   reducing tariffs and import quotas on labor-intensive products.E) C) and D)
F) A) and D)

Question 7

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since
the Second World War because of U.S. aid programs.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)   privatizing state industries
B)   controlling population growth
C)   restricting direct foreign investment from abroad
D)   building human capitalE) A) and B)
F) None of the above

Question 9

One way through which industrially advanced economies can help DVCs is known as "oﬃcial development assistance (ODA) ," or more simply,

Accepted Answer

A)   foreign investment.
B)   international capital.
C)   foreign aid.
D)   international trade.E) All of the above
F) A) and D)

Question 10

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) All of the above
F) A) and B)

Question 11

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects
that private institutions will not fund.

Accepted Answer

A) True 
 B)False

Question 12

DVCs tend to have permanent shortages of farm labor.

Accepted Answer

A) True 
 B)False

Question 13

Compare the GDP and GDP per capita of the United States with that of developing countries.

Accepted Answer

In 2017, U.S. GDP was $19 trillion while...

Question 14

The demographic transition view of population growth believes that slower population growth will
lead to rising incomes.

Accepted Answer

A) True 
 B)False

Question 15

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) None of the above

Question 16

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 17

(Last Word) Describe the three foreign aid methods for delivering funds directly to poor individuals
and how effective they have been.

Accepted Answer

Microcredit is small loans that are prov...

Question 18

In 2017, the IACs (industrially advanced countries) had an average per capita income that was about
50 times as high as that of the low-income nations.

Accepted Answer

A) True 
 B)False

Question 19

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) All of the above
F) B) and C)

Question 20

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Accepted Answer

A)   a lack of infrastructure.
B)   rigid law enforcement in the country.
C)   excessive local entrepreneurship.
D)   all these reasons.E) B) and C)
F) A) and D)

Exam 22: The Economics of Developing Countries

Assume the total real income 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

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

Correct AnswerverifiedShow Answer

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Correct AnswerverifiedShow Answer

DVCs tend to have permanent shortages of farm labor.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

(Last Word) Describe the three foreign aid methods for delivering funds directly to poor individuals and how effective they have been.

Correct AnswerverifiedMicrocredit is small loans that are prov...View AnswerShow Answer

One way through which industrially advanced economies can help DVCs is known as "oﬃcial development assistance (ODA) ," or more simply,

Correct AnswerverifiedShow Answer

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

Correct AnswerverifiedShow Answer

An example of direct foreign investment is

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

Compare the GDP and GDP per capita of the United States with that of developing countries.

Correct AnswerverifiedIn 2017, U.S. GDP was $19 trillion while...View AnswerShow Answer

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

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

In 2017, the IACs (industrially advanced countries) had an average per capita income that was about 50 times as high as that of the low-income nations.

Correct AnswerverifiedShow Answer

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

Correct AnswerverifiedShow Answer

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

Correct AnswerverifiedShow Answer

Low-income developing countries generally have the following characteristics except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since the Second World War because of U.S. aid programs.

Correct AnswerverifiedShow Answer

What is needed to aid capital formation in developing countries?

Correct AnswerverifiedShow Answer

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Microcredit is small loans that are prov...
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In 2017, U.S. GDP was $19 trillion while...
View Answer

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