Question 1

The demographic transition view of population and growth in DVCs is that

Accepted Answer

A)  the most important factor affecting population growth in DVCs is demographic changes among the elderly. 
B)  slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations. 
C)  reduced birth rates 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 follow. 
A)  the most important factor affecting population growth in DVCs is demographic changes among the elderly. 
B)  slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations. 
C)  reduced birth rates 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 follow.

Question 2

What are the two divisions of the World Bank? What do they do?

Accepted Answer

The two divisions of the World Bank are

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

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

Accepted Answer

A)  are concentrated in the public, rather than the private, sector. 
B)  are concentrated in the private, rather than the public, sector. 
C)  are concentrated in urban, rather than rural, areas. 
D)  have emigrated from the DVCs to the IACs. 
A)  are concentrated in the public, rather than the private, sector. 
B)  are concentrated in the private, rather than the public, sector. 
C)  are concentrated in urban, rather than rural, areas. 
D)  have emigrated from the DVCs to the IACs.

Question 5

For DVC per capita incomes to rise, birth rates must ﬁrst be reduced. This statement describes the

Accepted Answer

A)  human capital view of population growth. 
B)  traditional view of population growth. 
C)  capricious universe view. 
D)  demographic transition view of population growth. 
A)  human capital view of population growth. 
B)  traditional view of population growth. 
C)  capricious universe view. 
D)  demographic transition view of population growth.

Question 6

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. 
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.

Question 7

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

Accepted Answer

A)  in-kind investment. 
B)  the capricious universe view. 
C)  human capital investment. 
D)  the will to develop. 
A)  in-kind investment. 
B)  the capricious universe view. 
C)  human capital investment. 
D)  the will to develop.

Question 8

Which of the following is not inversely related to per capita income?

Accepted Answer

A)  mortality rates for children under ﬁve years of age 
B)  adult illiteracy rates 
C)  per capita energy consumption 
D)  population growth rates 
A)  mortality rates for children under ﬁve years of age 
B)  adult illiteracy rates 
C)  per capita energy consumption 
D)  population growth rates

Question 9

Approximately what percentage of the world's income is received by the poorest one-ﬁfth of the world's population?

Accepted Answer

A)  2 
B)  5 
C)  7 
D)  10 
A)  2 
B)  5 
C)  7 
D)  10

Question 10

Most nations of the world are now IACs, not middle- and low-income DVCs.

Accepted Answer

A) True 
 B)False

Question 11

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 12

In 2017, the GDP of the United States was approximately

Accepted Answer

A)  $9 trillion less than the GDP of the 135 DVCs in that year. 
B)  $9 trillion more than the GDP of the 135 DVCs in that year. 
C)  twice the GDP of the 135 DVCs in that year. 
D)  the same as the GDP of 135 DVCs in that year. 
A)  $9 trillion less than the GDP of the 135 DVCs in that year. 
B)  $9 trillion more than the GDP of the 135 DVCs in that year. 
C)  twice the GDP of the 135 DVCs in that year. 
D)  the same as the GDP of 135 DVCs in that year.

Question 13

The basic role of the International Finance Corporation is to

Accepted Answer

A)  make loans to governments in developing nations. 
B)  invest in private enterprises in developing nations. 
C)  ﬁnance exports from the United States to developing nations. 
D)  make loans to the World Bank, which in turn makes loans to governments in developing nations. 
A)  make loans to governments in developing nations. 
B)  invest in private enterprises in developing nations. 
C)  ﬁnance exports from the United States to developing nations. 
D)  make loans to the World Bank, which in turn makes loans to governments in developing nations.

Question 14

In contrast to international development efforts in most of the 20th century, more recent projects like microﬁnance, microcredit, and cash transfers in the last few decades represent a major shift.
That is because these recent projects are

Accepted Answer

A)  all sponsored by local governments. 
B)  done through the United Nations. 
C)  launched by universities and colleges. 
D)  focused on giving direct aid to poor individuals. 
A)  all sponsored by local governments. 
B)  done through the United Nations. 
C)  launched by universities and colleges. 
D)  focused on giving direct aid to poor individuals.

Question 15

Small loans to entrepreneurs and small business owners in DVCs are referred to as

Accepted Answer

A)  human capital development projects. 
B)  microcredit. 
C)  capital ﬂight promotion systems. 
D)  incubator lending. 
A)  human capital development projects. 
B)  microcredit. 
C)  capital ﬂight promotion systems. 
D)  incubator lending.

Question 16

The demographic transition concept suggests that

Accepted Answer

A)  effective birth control is the primary prerequisite of DVC income growth. 
B)  income growth must ﬁrst occur before DVC birth rates will decline. 
C)  children are economic assets in the IACs but economic liabilities in the DVCs. 
D)  the IACs will have higher birth rates than the DVCs. 
A)  effective birth control is the primary prerequisite of DVC income growth. 
B)  income growth must ﬁrst occur before DVC birth rates will decline. 
C)  children are economic assets in the IACs but economic liabilities in the DVCs. 
D)  the IACs will have higher birth rates than the DVCs.

Question 17

Which of the following is not an example of a sociocultural impediment to economic growth?

Accepted Answer

A)  tribal allegiances that take precedence over national unity 
B)  religious beliefs and practices that severely limit economic activity 
C)  migration of labor resources from agricultural to urban areas 
D)  a system for allocating jobs based on caste or tradition 
A)  tribal allegiances that take precedence over national unity 
B)  religious beliefs and practices that severely limit economic activity 
C)  migration of labor resources from agricultural to urban areas 
D)  a system for allocating jobs based on caste or tradition

Question 18

$$\begin{array} { | c | c | } 
\hline \text { Country } & \text { Per Capita Income, } 2017 \
\hline A & \$ 621 \
\hline B & 14,894 \
\hline C & 31,555 \
\hline D & 3,498 \
\hline E & 2,005 \
\hline
\end{array}$$ Which of the given nations would be high-income countries (IACs), according to the World Bank?

Accepted Answer

A)  country C only 
B)  countries B, C, and D 
C)  countries B, C, D, and E 
D)  countries B and C 
A)  country C only 
B)  countries B, C, and D 
C)  countries B, C, D, and E 
D)  countries B and C

Question 19

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)  owned and managed by the public sector. 
B)  distributed more equitably across business sectors. 
C)  reallocated to export industries. 
D)  used more eﬃciently. 
A)  owned and managed by the public sector. 
B)  distributed more equitably across business sectors. 
C)  reallocated to export industries. 
D)  used more eﬃciently.

Question 20

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

Accepted Answer

A)  the infrastructure provided by government 
B)  the abundance of entrepreneurs who need to be regulated 
C)  the need to encourage saving and investment in the economy 
D)  the provision of law and order so that commerce can ﬂourish 
A)  the infrastructure provided by government 
B)  the abundance of entrepreneurs who need to be regulated 
C)  the need to encourage saving and investment in the economy 
D)  the provision of law and order so that commerce can ﬂourish

Exam 22: The Economics of Developing Countries

The demographic transition view of population and growth in DVCs is that

What are the two divisions of the World Bank? What do they do?

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

The "brain drain" problem in the DVCs refers to the fact that the best-educated workers

For DVC per capita incomes to rise, birth rates must ﬁrst be reduced. This statement describes the

Successful foreign aid programs

Economic growth may hinge on whether individuals and institutions within a nation want growth badly enough to change their traditional ways of doing things. This statement refers to

Which of the following is not inversely related to per capita income?

Approximately what percentage of the world's income is received by the poorest one-ﬁfth of the world's population?

Most nations of the world are now IACs, not middle- and low-income DVCs.

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

In 2017, the GDP of the United States was approximately

The basic role of the International Finance Corporation is to

In contrast to international development efforts in most of the 20th century, more recent projects like microﬁnance, microcredit, and cash transfers in the last few decades represent a major shift. That is because these recent projects are

Small loans to entrepreneurs and small business owners in DVCs are referred to as

The demographic transition concept suggests that

Which of the following is not an example of a sociocultural impediment to economic growth?

Country Per Capita Income, 2017 A \ 621 B 14,894 C 31,555 D 3,498 E 2,005 Which of the given nations would be high-income countries (IACs), according to the World Bank?

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

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

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

Filters