Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

Accepted Answer

A) increase by about $83. 
B) decrease by about $83. 
C) remained unchanged. 
D) decrease by about $19. 
A) increase by about $83. 
B) decrease by about $83. 
C) remained unchanged. 
D) decrease by about $19. B

Question 3

In the 1990s,

Accepted Answer

A) direct private investment to the DVCs increased, and government-provided foreign aid decreased. 
B) both direct private investment and government-provided foreign aid to the DVCs increased. 
C) both direct private investment and government-provided foreign aid to the DVCs decreased. 
D) direct private investment to the DVCs decreased, and government-provided foreign aid increased. 
A) direct private investment to the DVCs increased, and government-provided foreign aid decreased. 
B) both direct private investment and government-provided foreign aid to the DVCs increased. 
C) both direct private investment and government-provided foreign aid to the DVCs decreased. 
D) direct private investment to the DVCs decreased, and government-provided foreign aid increased. A

Question 4

The "vicious circle of poverty" for developing nations can best be described by

Accepted Answer

A) low levels of international trade that reduce exports and increase the dependence on imports. 
B) low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income. 
C) a large government sector, which reduces the availability of private investment spending but increases macroeconomic stability. 
D) a lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses. 
A) low levels of international trade that reduce exports and increase the dependence on imports. 
B) low incomes that inhibit saving and the accumulation of real and human capital, making it difficult to increase productivity and income. 
C) a large government sector, which reduces the availability of private investment spending but increases macroeconomic stability. 
D) a lack of entrepreneurial talent that limits the formation of businesses and the development of private businesses.

Question 5

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

Accepted Answer

A) True 
 B)False

Question 6

An example of direct foreign investment would be the building of a motorcycle factory in China by Honda Motors.

Accepted Answer

A) True 
 B)False

Question 7

An economy's infrastructure refers to its

Accepted Answer

A) public capital goods, such as roads, schools, and power facilities. 
B) financial and banking institutions. 
C) land and natural resources. 
D) surplus supplies of unskilled labor. 
A) public capital goods, such as roads, schools, and power facilities. 
B) financial and banking institutions. 
C) land and natural resources. 
D) surplus supplies of unskilled labor.

Question 8

The DVCs are

Accepted Answer

A) located primarily in Northern Europe. 
B) located primarily in Western Europe. 
C) located primarily in Africa, Asia, and Latin America. 
D) more or less evenly distributed over the various continents. 
A) located primarily in Northern Europe. 
B) located primarily in Western Europe. 
C) located primarily in Africa, Asia, and Latin America. 
D) more or less evenly distributed over the various continents.

Question 9

Per capita income in the United States in 2014 was how many times greater than that in China?

Accepted Answer

A) 3 times 
B) 12 times 
C) 7.5 times 
D) 17 times 
A) 3 times 
B) 12 times 
C) 7.5 times 
D) 17 times

Question 10

According to the United Nations, approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

Accepted Answer

A) 24 percent 
B) 38 percent 
C) 60 percent 
D) 75 percent 
A) 24 percent 
B) 38 percent 
C) 60 percent 
D) 75 percent

Question 11

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Capital flight is a problem to DVCs because it

Accepted Answer

A) causes the value of a DVC's currency to appreciate. 
B) reduces the volume of DVC investment. 
C) reduces the flow of foreign aid from the IACs. 
D) causes inflation in the DVCs. 
A) causes the value of a DVC's currency to appreciate. 
B) reduces the volume of DVC investment. 
C) reduces the flow of foreign aid from the IACs. 
D) causes inflation in the DVCs.

Question 14

Which of the following is typically not a problem for low-income DVCs?

Accepted Answer

A) capital flight 
B) "brain drain" 
C) high saving rates that slow aggregate demand growth 
D) poor infrastructure 
A) capital flight 
B) "brain drain" 
C) high saving rates that slow aggregate demand growth 
D) poor infrastructure

Question 15

The World Bank operates primarily as a

Accepted Answer

A) deposit institution for nations' gold supplies. 
B) coordinator for private banks in major nations. 
C) lender of last resort to less-developed nations. 
D) U.S.government agency that supervises banks worldwide. 
A) deposit institution for nations' gold supplies. 
B) coordinator for private banks in major nations. 
C) lender of last resort to less-developed nations. 
D) U.S.government agency that supervises banks worldwide.

Question 16

Investment in-kind refers to the possibility that

Accepted Answer

A) DVCs will invest for the purpose of becoming less dependent on world markets. 
B) a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program. 
C) newly established manufacturing firms may expand by reinvesting their profits. 
D) surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams. 
A) DVCs will invest for the purpose of becoming less dependent on world markets. 
B) a DVC will overinvest in industries in which it has a comparative advantage, disrupting its development program. 
C) newly established manufacturing firms may expand by reinvesting their profits. 
D) surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams.

Question 17

Refer to the table.If per capita income increases by 10 percent over five years in each of the nations shown, the per capita income gap between country C and country A

Accepted Answer

A) will remain the same. 
B) will rise from $30,934 to $34,027. 
C) may rise or fall depending on the rate of population growth. 
D) will rise from $31,555 to $34,710. 
A) will remain the same. 
B) will rise from $30,934 to $34,027. 
C) may rise or fall depending on the rate of population growth. 
D) will rise from $31,555 to $34,710.

Question 18

Which of the following IACs (industrially advanced countries) gave the largest share of its GDP to foreign aid or development assistance to DVCs (developing countries) in 2015?

Accepted Answer

A) Sweden 
B) Japan 
C) United States 
D) Germany 
A) Sweden 
B) Japan 
C) United States 
D) Germany

Question 19

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

Question 20

Population growth remains high in most DVCs

Accepted Answer

A) because religious and sociocultural considerations favor large families. 
B) because children may provide economic security for aging parents. 
C) because children provide agricultural labor in rural areas. 
D) for all of these reasons. 
A) because religious and sociocultural considerations favor large families. 
B) because children may provide economic security for aging parents. 
C) because children provide agricultural labor in rural areas. 
D) for all of these reasons.

Exam 19: The Economics of Developing Countries

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

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

In the 1990s,

The "vicious circle of poverty" for developing nations can best be described by

The creation of an adequate infrastructure in a nation is primarily the responsibility of the public sector.

An example of direct foreign investment would be the building of a motorcycle factory in China by Honda Motors.

An economy's infrastructure refers to its

The DVCs are

Per capita income in the United States in 2014 was how many times greater than that in China?

According to the United Nations, approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

Reduction of tariff barriers against DVC imports would benefit both the DVCs and the IACs.

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

Capital flight is a problem to DVCs because it

Which of the following is typically not a problem for low-income DVCs?

The World Bank operates primarily as a

Investment in-kind refers to the possibility that

Refer to the table.If per capita income increases by 10 percent over five years in each of the nations shown, the per capita income gap between country C and country A

Which of the following IACs (industrially advanced countries) gave the largest share of its GDP to foreign aid or development assistance to DVCs (developing countries) in 2015?

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

Population growth remains high in most DVCs

Part A: Limits, Alternatives, and Choices

Part B: Limits, Alternatives, and Choices

Part A: The Market System and the Circular Flow

Part B: The Market System and the Circular Flow

Part A: Demand, Supply, and Market Equilibrium

Part B: Demand, Supply, and Market Equilibrium

Part A: Market Failures: Public Goods and Externalities

Part B: Market Failures: Public Goods and Externalities

Part A: Governments Role and Government Failure

Part B: Governments Role and Government Failure

Part A: An Introduction to Macroeconomics

Part B: An Introduction to Macroeconomics

Part A: Measuring the Economys Output

Part B: Measuring the Economys Output

Part A: Economic Growth

Part B: Economic Growth

Part A: Business Cycles, Unemployment, and Inflation

Part B: Business Cycles, Unemployment, and Inflation

Part A: Basic Macroeconomic Relationships

Part B: Basic Macroeconomic Relationships

Part A: The Aggregate Expenditures Model

Part B: The Aggregate Expenditures Model

Part A: Aggregate Demand and Aggregate Supply

Part B: Aggregate Demand and Aggregate Supply

Part A: Fiscal Policy, Deficits, Surpluses, and Debt

Part B: Fiscal Policy, Deficits, Surpluses, and Debt

Part A: Money, Banking, and Money Creation

Part B: Money, Banking, and Money Creation

Part A: Interest Rates and Monetary Policy

Part B: Interest Rates and Monetary Policy

Part A: Long-Run Macroeconomic Adjustments

Part B: Long-Run Macroeconomic Adjustments

Part A: International Trade

Part B: International Trade

Part C: Financial Economics

Part A: The Balance of Payments and Exchange Rates

Part B: The Balance of Payments and Exchange Rates

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