Question 1

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 2

Which of the following is generally not an effective strategy to promote DVC growth?

Accepted Answer

A)   microlending
B)   human capital development
C)   ﬁghting wars against neighbors to obtain resources and stimulate aggregate demand through arms spending
D)   controlling inﬂationE) All of the above
F) A) and C)

Question 3

A large portion of government-provided foreign aid to developing countries

Accepted Answer

A)   has averaged about 1 percent of the IACs' GDP each year.
B)   has increased sharply and steadily since 1995.
C)   has dwarfed the size of foreign direct investment to the DVCs in recent years.
D)   is distributed on the basis of political and military considerations.E) A) and B)
F) A) and C)

Question 4

Infrastructure is best illustrated by

Accepted Answer

A)   business equipment and factories.
B)   agricultural machinery and tools.
C)   ﬁnancial institutions.
D)   roads and bridges.E) A) and B)
F) A) and C)

Question 5

In 2017, foreign aid from the IACs was

Accepted Answer

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

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The vicious circle of poverty is based on the connections between low income, low saving, low
investment, and low productivity.

Accepted Answer

A) True 
 B)False

Question 8

One of the major objectives of the World Bank is to

Accepted Answer

A)   provide ﬁnancial backing for the United Nations.
B)   maximize its proﬁts for its worldwide shareholders.
C)   provide technical assistance to DVCs.
D)   maintain stable exchange rates in IACs and DVCs.E) C) and D)
F) A) and B)

Question 9

Most developing countries (DVCs)  exhibit a low level of

Accepted Answer

A)   illiteracy.
B)   population growth.
C)   life expectancy.
D)   infant mortality.E) None of the above
F) B) and C)

Question 10

Examples of low-income developing countries are

Accepted Answer

A)   Switzerland, New Zealand, and Australia.
B)   Germany, Austria, and Italy.
C)   Chad, Bangladesh, and Democratic Republic of the Congo.
D)   Mexico, South Korea, and Brazil.E) B) and D)
F) None of the above

Question 11

Over the next 15 years, ___ out of every 10 people added to the world's population will be born in developing countries.

Accepted Answer

A)   6
B)   7
C)   8
D)   9E) A) and B)
F) A) and C)

Question 12

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) A) and B)

Question 13

Why do developing nations often have low labor productivity? Are the workers just lazy?

Accepted Answer

No, the workers are not just lazy. The l...

Question 14

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

Question 15

If the per capita incomes of DVCs (developing countries)  grew at the same annual rate as those of IACs (industrially advanced countries) , then the absolute income gap between rich and poor nations
Over the years would

Accepted Answer

A)   narrow.
B)   widen.
C)   stay the same.
D)   reverse.E) None of the above
F) A) and B)

Question 16

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 17

The very poorest low-income DVCs typically have relatively

Accepted Answer

A)   low rates of economic growth and relatively high rates of population growth.
B)   high rates of economic growth and relatively low rates of population growth.
C)   low rates of both population growth and economic growth.
D)   high rates of both population growth and economic growth.E) All of the above
F) None of the above

Question 18

The World Bank

Accepted Answer

A)   provides military assistance to those nations interested in improving national defense.
B)   makes and guarantees loans for basic development projects such as the construction of dams, roads, and schools.
C)   provides gold for DVCs that want to go on the gold standard.
D)   provides short-term loans to DVCs that are incurring balance of payments deﬁcits.E) A) and B)
F) A) and D)

Question 19

The populations of the developing nations are growing

Accepted Answer

A)   at about 5 percent per year.
B)   at about the same rate as those of the industrially advanced nations.
C)   slower than those of the industrially advanced nations.
D)   faster than those of the industrially advanced nations.E) A) and B)
F) C) and D)

Question 20

One of the major investment obstacles in less-developed nations is

Accepted Answer

A)   an accumulation of savings with no place to invest the funds.
B)   a poor public infrastructure that hurts returns on private investment.
C)   a progressive tax system that is eﬃcient in collecting taxes on investment.
D)   a low unemployment rate that makes it diﬃcult to ﬁnd the needed workers for businesses.E) A) and B)
F) A) and C)

Exam 22: The Economics of Developing Countries

Examples of low-income developing countries are

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

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

Correct AnswerverifiedShow Answer

If the per capita incomes of DVCs (developing countries) grew at the same annual rate as those of IACs (industrially advanced countries) , then the absolute income gap between rich and poor nations Over the years would

Correct AnswerverifiedShow Answer

Industrially advanced countries can help developing countries by

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

Correct AnswerverifiedShow Answer

The vicious circle of poverty is based on the connections between low income, low saving, low investment, and low productivity.

Correct AnswerverifiedShow Answer

Why do developing nations often have low labor productivity? Are the workers just lazy?

Correct AnswerverifiedNo, the workers are not just lazy. The l...View AnswerShow Answer

Infrastructure is best illustrated by

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One of the major objectives of the World Bank is to

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The populations of the developing nations are growing

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Most developing countries (DVCs) exhibit a low level of

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One of the major investment obstacles in less-developed nations is

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Which of the following is generally not an effective strategy to promote DVC growth?

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

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The very poorest low-income DVCs typically have relatively

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In 2017, foreign aid from the IACs was

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The World Bank

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Over the next 15 years, ___ out of every 10 people added to the world's population will be born in developing countries.

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A large portion of government-provided foreign aid to developing countries

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No, the workers are not just lazy. The l...
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