Question 1

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of

Accepted Answer

A)  foreign aid. 
B)  capital-saving investment. 
C)  in-kind investment. 
D)  technological advance. 
A)  foreign aid. 
B)  capital-saving investment. 
C)  in-kind investment. 
D)  technological advance.

Question 2

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

Accepted Answer

A)  the IACs have patents on most of their technologies. 
B)  the IACs and the DVCs have much different resource endowments. 
C)  the technologies of the IACs rely heavily on unskilled labor. 
D)  IAC technologies are labor-intensive, while DVC technologies are capital-intensive. 
A)  the IACs have patents on most of their technologies. 
B)  the IACs and the DVCs have much different resource endowments. 
C)  the technologies of the IACs rely heavily on unskilled labor. 
D)  IAC technologies are labor-intensive, while DVC technologies are capital-intensive.

Question 3

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

Accepted Answer

A)  privatizing state industries 
B)  controlling population growth 
C)  restricting direct foreign investment from abroad 
D)  building human capital 
A)  privatizing state industries 
B)  controlling population growth 
C)  restricting direct foreign investment from abroad 
D)  building human capital

Question 4

(Last Word) Describe the three foreign aid methods for delivering funds directly to poor individuals
and how effective they have been.

Accepted Answer

Microcredit is small loans that are prov

Question 5

Compare the GDP and GDP per capita of the United States with that of developing countries.

Accepted Answer

In 2017, U.S. GDP was $19 trillion while

Question 6

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects
that private institutions will not fund.

Accepted Answer

A) True 
 B)False

Question 7

In 2017, the IACs (industrially advanced countries) had an average per capita income that was about
50 times as high as that of the low-income nations.

Accepted Answer

A) True 
 B)False

Question 8

If the real outputs per capita of a rich nation and a poor nation grow at the same percentage rate,
the absolute income gap between the two nations will shrink.

Accepted Answer

A) True 
 B)False

Question 9

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since
the Second World War because of U.S. aid programs.

Accepted Answer

A) True 
 B)False

Question 10

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

Accepted Answer

A)  cutting debt relief for DVCs. 
B)  directing foreign aid to the more aﬄuent DVCs. 
C)  restricting immigration of low-skilled workers from DVCs. 
D)  reducing tariffs and import quotas on labor-intensive products. 
A)  cutting debt relief for DVCs. 
B)  directing foreign aid to the more aﬄuent DVCs. 
C)  restricting immigration of low-skilled workers from DVCs. 
D)  reducing tariffs and import quotas on labor-intensive products.

Question 11

The demographic transition view of population growth believes that slower population growth will
lead to rising incomes.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

One way through which industrially advanced economies can help DVCs is known as "oﬃcial development assistance (ODA)," or more simply,

Accepted Answer

A)  foreign investment. 
B)  international capital. 
C)  foreign aid. 
D)  international trade. 
A)  foreign investment. 
B)  international capital. 
C)  foreign aid. 
D)  international trade.

Question 14

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

Accepted Answer

A)  a lack of infrastructure. 
B)  rigid law enforcement in the country. 
C)  excessive local entrepreneurship. 
D)  all these reasons. 
A)  a lack of infrastructure. 
B)  rigid law enforcement in the country. 
C)  excessive local entrepreneurship. 
D)  all these reasons.

Question 15

DVCs tend to have permanent shortages of farm labor.

Accepted Answer

A) True 
 B)False

Question 16

The population growth rate of the DVCs (developing countries) as a group in recent decades has been

Accepted Answer

A)  steady. 
B)  declining. 
C)  rising modestly. 
D)  rising rapidly. 
A)  steady. 
B)  declining. 
C)  rising modestly. 
D)  rising rapidly.

Question 17

An example of direct foreign investment is

Accepted Answer

A)  a U.S. bank granting a loan to a Guatemalan ﬁrm. 
B)  General Motors building an auto production facility in China. 
C)  a U.S. government foreign aid grant to Bangladesh. 
D)  the purchase of debt issued by the Panamanian government. 
A)  a U.S. bank granting a loan to a Guatemalan ﬁrm. 
B)  General Motors building an auto production facility in China. 
C)  a U.S. government foreign aid grant to Bangladesh. 
D)  the purchase of debt issued by the Panamanian government.

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 products 
A)  more capital ﬂight 
B)  more oil resources 
C)  more entrepreneurship 
D)  higher price supports for products

Question 19

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 resources. 
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 resources.

Question 20

Assume the total real income of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per
Capita income has

Accepted Answer

A)  increased by $25 per person. 
B)  decreased by $25 per person. 
C)  increased by $533 per person. 
D)  decreased by $533 per person. 
A)  increased by $25 per person. 
B)  decreased by $25 per person. 
C)  increased by $533 per person. 
D)  decreased by $533 per person.

Exam 22: The Economics of Developing Countries

Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of

The ability of the DVCs to use the technologies of the IACs is somewhat limited because

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

(Last Word) Describe the three foreign aid methods for delivering funds directly to poor individuals and how effective they have been.

Compare the GDP and GDP per capita of the United States with that of developing countries.

The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund.

In 2017, the IACs (industrially advanced countries) had an average per capita income that was about 50 times as high as that of the low-income nations.

If the real outputs per capita of a rich nation and a poor nation grow at the same percentage rate, the absolute income gap between the two nations will shrink.

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since the Second World War because of U.S. aid programs.

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

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

One way through which industrially advanced economies can help DVCs is known as "oﬃcial development assistance (ODA)," or more simply,

A highly active role by government may be needed to promote economic growth in low-income DVCs because of

DVCs tend to have permanent shortages of farm labor.

The population growth rate of the DVCs (developing countries) as a group in recent decades has been

An example of direct foreign investment is

What is needed to aid capital formation in developing countries?

Low-income developing countries generally have the following characteristics except

Assume the total real income of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next. Over the year, per Capita income has

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