Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The industrially advanced countries (IACs) had an average per capita income in 2017 of around

Accepted Answer

A)  $82,000 per person. 
B)  $27,000 per person. 
C)  $40,000 per person. 
D)  $61,000 per person. 
A)  $82,000 per person. 
B)  $27,000 per person. 
C)  $40,000 per person. 
D)  $61,000 per person.

Question 3

Which of the following is not a DVC policy likely to increase DVC economic growth?

Accepted Answer

A)  encouraging direct foreign investment 
B)  opening economies to world trade 
C)  establishing independent central banks 
D)  encouraging emigration of highly skilled workers 
A)  encouraging direct foreign investment 
B)  opening economies to world trade 
C)  establishing independent central banks 
D)  encouraging emigration of highly skilled workers

Question 4

What are the three basic criticisms of foreign aid to DVCs?

Accepted Answer

(1) Dependency and incentives: A basic c

Question 5

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The average per capita income in 2017 for low-income developing nations was about

Accepted Answer

A)  $775. 
B)  $2,100. 
C)  $1,990. 
D)  $4,600. 
A)  $775. 
B)  $2,100. 
C)  $1,990. 
D)  $4,600.

Question 8

A factor that limits the amount of saving in developing countries is the fact that

Accepted Answer

A)  the banking system does not encourage saving. 
B)  there is too much foreign aid, so savings is not needed. 
C)  the level of aggregate domestic output is low. 
D)  the government controls ﬁnancial institutions and makes it diﬃcult for people to save. 
A)  the banking system does not encourage saving. 
B)  there is too much foreign aid, so savings is not needed. 
C)  the level of aggregate domestic output is low. 
D)  the government controls ﬁnancial institutions and makes it diﬃcult for people to save.

Question 9

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

A)  shift the production possibilities curve for a nation outward. 
B)  increase the demand for and decrease the supply of productive resources. 
C)  make a nation less productive because of the need to coordinate the increased quantity of resources. 
D)  lead to increased population growth that will decrease the per capita growth in a nation. 
A)  shift the production possibilities curve for a nation outward. 
B)  increase the demand for and decrease the supply of productive resources. 
C)  make a nation less productive because of the need to coordinate the increased quantity of resources. 
D)  lead to increased population growth that will decrease the per capita growth in a nation.

Question 10

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. 
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.

Question 11

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

Accepted Answer

A)  declining death rates. 
B)  increasing birth rates. 
C)  reduced infant mortality. 
D)  decreasing life expectancy. 
A)  declining death rates. 
B)  increasing birth rates. 
C)  reduced infant mortality. 
D)  decreasing life expectancy.

Question 12

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. 
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.

Question 13

Developing countries (DVCs) can be subdivided into the following groups except

Accepted Answer

A)  low-income economies. 
B)  high-income economies. 
C)  lower-middle-income economies. 
D)  upper-middle-income economies. 
A)  low-income economies. 
B)  high-income economies. 
C)  lower-middle-income economies. 
D)  upper-middle-income economies.

Question 14

Which of the following is most characteristic of developing nations?

Accepted Answer

A)  a small percentage of the labor force in agriculture 
B)  a relatively equitable distribution of income 
C)  low levels of labor productivity 
D)  low rates of population growth 
A)  a small percentage of the labor force in agriculture 
B)  a relatively equitable distribution of income 
C)  low levels of labor productivity 
D)  low rates of population growth

Question 15

Which of the following countries had the highest per capita income (on a purchasing power parity basis) in 2017?

Accepted Answer

A)  China 
B)  United States 
C)  Japan 
D)  Brazil 
A)  China 
B)  United States 
C)  Japan 
D)  Brazil

Question 16

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

Accepted Answer

A)  a capital-using technology. 
B)  a capital-saving technology. 
C)  capital consumption. 
D)  private capital ﬂows. 
A)  a capital-using technology. 
B)  a capital-saving technology. 
C)  capital consumption. 
D)  private capital ﬂows.

Question 17

If population is expanding at the same rate as real output,

Accepted Answer

A)  real per capita output will increase. 
B)  real per capita output will decrease. 
C)  real per capita output will remain unchanged. 
D)  living standards will increase. 
A)  real per capita output will increase. 
B)  real per capita output will decrease. 
C)  real per capita output will remain unchanged. 
D)  living standards will increase.

Question 18

List the three major human resource problems in developing nations.

Accepted Answer

The three major human resource problems

Question 19

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.

Question 20

Deﬁne "developing countries."

Accepted Answer

Developing countries are the many countr

Exam 22: The Economics of Developing Countries

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

The industrially advanced countries (IACs) had an average per capita income in 2017 of around

Which of the following is not a DVC policy likely to increase DVC economic growth?

What are the three basic criticisms of foreign aid to DVCs?

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Capital ﬂight is a problem to DVCs because it

The average per capita income in 2017 for low-income developing nations was about

A factor that limits the amount of saving in developing countries is the fact that

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

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

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

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

Developing countries (DVCs) can be subdivided into the following groups except

Which of the following is most characteristic of developing nations?

Which of the following countries had the highest per capita income (on a purchasing power parity basis) in 2017?

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

If population is expanding at the same rate as real output,

List the three major human resource problems in developing nations.

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

Deﬁne "developing countries."

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

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