Question 1

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 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

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

Question 4

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

Question 5

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) B) and C)
F) None of the above

Question 6

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) None of the above
F) B) and C)

Question 7

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

Question 8

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 B)
F) None of the above

Question 9

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

Question 10

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 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

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) None of the above
F) B) and C)

Question 15

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

Question 16

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) None of the above
F) B) and C)

Question 17

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

Question 18

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

Question 19

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

Accepted Answer

A)   Illiteracy
B)   Population growth
C)   Life expectancy
D)   Infant mortalityE) None of the above
F) B) and C)

Question 20

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 B)
F) None of the above

Exam 22: The Economics of Developing Countries

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

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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

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

What is needed to aid capital formation in developing countries?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

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