Question 1

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 C)
F) None of the above

Question 2

If the real output of a DVC increases from $200 billion to $260 billion and its population increases from 100 to 120 million, its real per capita output will have

Accepted Answer

A)  remained unchanged.
B)  increased by about $167.
C)  increased by about $55.
D)  decreased by about $20.E) A) and B)
F) A) and C)

Question 3

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

Accepted Answer

A)  country A only
B)  countries A, D, and E
C)  countries A and E
D)  countries A, B, D, and EE) A) and B)
F) B) and C)

Question 4

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Accepted Answer

A)  diminishing returns may be encountered in increasing total output.
B)  population increases may dissipate the increase in real output.
C)  disguised unemployment in agriculture will persist.
D)  surplus farm labor may move from rural areas to industrial areas, causing unemployment.E) B) and C)
F) C) and D)

Question 5

State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firm to set up their own businesses. This statement is an argument in favor of

Accepted Answer

A)  free immigration and emigration.
B)  privatizing state industries.
C)  central planning.
D)  free trade.E) B) and C)
F) A) and B)

Question 6

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Accepted Answer

A)  causing higher prices for imported food products.
B)  lowering saving rates in the DVCs.
C)  encouraging "brain drains" from the DVCs.
D)  reducing world agricultural prices and thus export income of the DVCs.E) B) and D)
F) A) and B)

Question 7

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 8

Assume that the real output of a developing nation increases from $50 billion to $62 billion, while its population expands from 100 to 115 million. As a result, real income per capita has increased by about

Accepted Answer

A)  $39 per person.
B)  $64 per person.
C)  $12 per person.
D)  $27 per person.E) A) and D)
F) C) and D)

Question 9

The lack of an entrepreneurial class in developing nations tends to

Accepted Answer

A)  keep workers from migrating to cities from rural areas.
B)  reduce the level of capital investment.
C)  force the need for land reform.
D)  keep governments stable.E) All of the above
F) None of the above

Question 10

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 11

What are the two divisions of the World Bank? What do they do?

Accepted Answer

The two divisions of the World Bank are ...

Question 12

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 reform.E) A) and B)
F) A) and C)

Question 13

Define corruption. Is this common in DVCs?

Accepted Answer

Corruption is the misuse of government p...

Question 14

Birth- and population-control efforts in many DVCs (developing countries) face the following obstacles except

Accepted Answer

A)  low literacy rates.
B)  religious reasons.
C)  a peasant agriculture view about children.
D)  government authorities.E) A) and B)
F) B) and D)

Question 15

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

Accepted Answer

A)  low trade barriers
B)  large international debts
C)  an increase in the rate of saving
D)  a slowing of population growthE) B) and D)
F) A) and B)

Question 17

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 2 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Accepted Answer

A)  increase by $380.
B)  increase by $19,380.
C)  decrease by $1,000.
D)  remain unchanged at $19,000.E) A) and B)
F) A) and C)

Question 18

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 19

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Accepted Answer

A) True 
 B)False

Question 20

Industrially advanced countries can 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) All of the above
F) B) and D)

Exam 28: The Economics of Developing Countries

Assume that the real output of a developing nation increases from $50 billion to $62 billion, while its population expands from 100 to 115 million. As a result, real income per capita has increased by about

Correct AnswerverifiedShow Answer

Birth- and population-control efforts in many DVCs (developing countries) face the following obstacles except

Correct AnswerverifiedShow Answer

What are the two divisions of the World Bank? What do they do?

Correct AnswerverifiedThe two divisions of the World Bank are ...View AnswerShow Answer

Which of the following is considered to be a severe obstacle to economic growth for DVCs?

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

Industrially advanced countries can help developing countries by

Correct AnswerverifiedShow Answer

Define corruption. Is this common in DVCs?

Correct AnswerverifiedCorruption is the misuse of government p...View AnswerShow Answer

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Correct AnswerverifiedShow Answer

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

Correct AnswerverifiedShow Answer

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Correct AnswerverifiedShow Answer

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 2 percent growth of their real per capita outputs, after one year the absolute real per capita output gap will

Correct AnswerverifiedShow Answer

State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firm to set up their own businesses. This statement is an argument in favor of

Correct AnswerverifiedShow Answer

If the real output of a DVC increases from $200 billion to $260 billion and its population increases from 100 to 120 million, its real per capita output will have

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

An institutional change that is needed in most developing nations is

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

The lack of an entrepreneurial class in developing nations tends to

Correct AnswerverifiedShow Answer

Capital flight from the DVCs may be caused by

Correct AnswerverifiedShow Answer

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The two divisions of the World Bank are ...
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Corruption is the misuse of government p...
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