Question 1

The vicious circle of poverty in the poorest DVCs can also be expressed as,

Accepted Answer

A)  "The rich get richer, while the poor get poorer."
B)  "Fate dealt the poor nations a bad hand."
C)  "The poor nations stay poor because they are poor."
D)  "Historical developments have oppressed the poor nations' incomes."E) None of the above
F) All of the above

Question 2

The role of government in fostering economic growth in DVCs has been criticized because

Accepted Answer

A)  most governments operate as dictatorships.
B)  there is often poor administration and corruption in government.
C)  government is generally supportive of business at the expense of labor.
D)  governments have adopted the unpopular method of forced savings to stimulate investment.E) C) and D)
F) B) and D) B

Question 3

Successful foreign aid programs

Accepted Answer

A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left.
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right.
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve.
D)  cause a DVC's exchange rate to depreciate.E) None of the above
F) A) and B)

Question 4

Saving is low in many DVCs primarily because income is very equally distributed.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following does not correlate positively with economic growth?

Accepted Answer

A)  output per capita
B)  life expectancy
C)  the percentage of the population engaged in agriculture
D)  the literacy rateE) B) and C)
F) B) and D) C

Question 6

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Accepted Answer

A) True 
 B)False

Question 7

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

Accepted Answer

A)  Cash transfers never worked, because the recipients just wasted the money on unproductive spending.
B)  These transfers have shown positive early results; the majority of the recipients spent the money as intended.
C)  Only conditional cash transfers worked.Unconditional cash transfers never worked.
D)  These cash transfers worked only if the aid providers frequently followed up on the recipients.E) None of the above
F) All of the above

Question 8

Surplus agricultural labor in a developing nation usually means that there is

Accepted Answer

A)  a caste system.
B)  widespread underemployment.
C)  immobility of labor resources.
D)  increased investment in agriculture.E) C) and D)
F) All of the above

Question 9

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

A) True 
 B)False

Question 10

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 11

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

A) True 
 B)False

Question 12

A developing nation may not experience an increase in the average standard of living even if it increases its output of goods and services because of

Accepted Answer

A)  land reform.
B)  population growth.
C)  underemployment and disguised unemployment.
D)  capital-saving technology.E) None of the above
F) B) and C) B

Question 13

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Accepted Answer

A)  25 percent
B)  50 percent
C)  70 percent
D)  90 percentE) B) and D)
F) B) and C)

Question 14

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Accepted Answer

A)  use existing resources more efficiently and expand the available resources.
B)  expand the government sector and preserve all available resources.
C)  enhance regulation and taxation, and redistribute income to reduce income disparity.
D)  expand the money supply and eliminate budget deficits.E) None of the above
F) A) and B)

Question 15

When economists refer to capital flight, they are speaking of an

Accepted Answer

A)  outflow of financial capital from a certain country.
B)  outflow of real capital from a certain country.
C)  outflow of financial and real capital from a certain country.
D)  outflow of human capital from a certain country.E) A) and C)
F) B) and D)

Question 16

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Accepted Answer

A)  admitting more temporary workers from DVCs
B)  reducing the amount of debt relief for DVCs to make them less dependent
C)  eliminating loans from the World Bank because it encourages bureaucracy
D)  eliminating financial control of central banks where they have been establishedE) B) and C)
F) All of the above

Question 17

A major criticism of foreign aid to developing nations is that it

Accepted Answer

A)  is capital saving rather than capital intensive.
B)  provides incentives for a brain drain.
C)  encourages corruption and misuse of funds.
D)  gives too much power and control to the International Monetary Fund.E) B) and C)
F) A) and B)

Question 18

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 C)
F) None of the above

Question 19

Most of the world's population lives in

Accepted Answer

A)  North America.
B)  the DVCs.
C)  Western Europe.
D)  the IACs.E) A) and C)
F) A) and D)

Question 20

Which of the following is not a characteristic of human resources in the poorest DVCs?

Accepted Answer

A)  Populations are large.
B)  Unemployment and underemployment are widespread.
C)  Population growth is low.
D)  Labor productivity is low.E) A) and B)
F) All of the above

Exam 42: The Economics of Developing Countries

The vicious circle of poverty in the poorest DVCs can also be expressed as,

Correct AnswerverifiedShow Answer

The role of government in fostering economic growth in DVCs has been criticized because

Correct AnswerverifiedB

Successful foreign aid programs

Correct AnswerverifiedShow Answer

Saving is low in many DVCs primarily because income is very equally distributed.

Correct AnswerverifiedShow Answer

Which of the following does not correlate positively with economic growth?

Correct AnswerverifiedC

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Correct AnswerverifiedShow Answer

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

Correct AnswerverifiedShow Answer

Surplus agricultural labor in a developing nation usually means that there is

Correct AnswerverifiedShow Answer

Most of the DVCs of the world are located in Western Europe.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Correct AnswerverifiedShow Answer

A developing nation may not experience an increase in the average standard of living even if it increases its output of goods and services because of

Correct AnswerverifiedB

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Correct AnswerverifiedShow Answer

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Correct AnswerverifiedShow Answer

When economists refer to capital flight, they are speaking of an

Correct AnswerverifiedShow Answer

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Correct AnswerverifiedShow Answer

A major criticism of foreign aid to developing nations is that it

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most of the world's population lives in

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of human resources in the poorest DVCs?

Correct AnswerverifiedShow Answer

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C

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B

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