Question 1

Which of the following is characteristic of DVCs?

Accepted Answer

A)  A large percentage of the labor force is in agriculture. 
B)  There are high levels of saving and investment. 
C)  They have high labor productivity. 
D)  There are high levels of training. 
A)  A large percentage of the labor force is in agriculture. 
B)  There are high levels of saving and investment. 
C)  They have high labor productivity. 
D)  There are high levels of training.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor
use.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the "one child per family" policy implemented in China. Why did it need to be overturned?

Accepted Answer

In 1980, the Chinese authorities institu

Question 5

The diversion of surplus labor in agriculture to the production of schools or roads in developing countries is described as

Accepted Answer

A)  land reform. 
B)  the brain drain. 
C)  in-kind investment. 
D)  a capital-using technological advance. 
A)  land reform. 
B)  the brain drain. 
C)  in-kind investment. 
D)  a capital-using technological advance.

Question 6

Development experts are less enthusiastic than they used to be about three decades ago about the positive role of DVC governments in promoting economic growth in their less-developed nations
Because of the

Accepted Answer

A)  corruption in government. 
B)  availability of foreign aid. 
C)  need for a greater tax collection. 
D)  need for more public capital goods. 
A)  corruption in government. 
B)  availability of foreign aid. 
C)  need for a greater tax collection. 
D)  need for more public capital goods.

Question 7

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 8

Most of the ﬂow of foreign aid goes to

Accepted Answer

A)  the poorest of developing countries (DVCs). 
B)  the most aﬄuent of the developing country populations. 
C)  the smallest developing countries. 
D)  about 70 percent of the world's poorest people. 
A)  the poorest of developing countries (DVCs). 
B)  the most aﬄuent of the developing country populations. 
C)  the smallest developing countries. 
D)  about 70 percent of the world's poorest people.

Question 9

The corruption and poor administration that are common to the public sectors of many DVCs
suggest that government may not be very effective in promoting economic growth.

Accepted Answer

A) True 
 B)False

Question 10

A reason for placing emphasis on capital accumulation in developing countries is the high

Accepted Answer

A)  level of adult illiteracy. 
B)  productivity of workers in DVCs. 
C)  need for investment in infrastructure. 
D)  level of import quotas and tariffs. 
A)  level of adult illiteracy. 
B)  productivity of workers in DVCs. 
C)  need for investment in infrastructure. 
D)  level of import quotas and tariffs.

Question 11

Increases in the total real output of many DVCs do not increase the nation's standard of living because

Accepted Answer

A)  diminishing returns may be encountered in increasing total output. 
B)  population increases may dissipate the increase in real output. 
C)  disguised unemployment in agriculture will persist. 
D)  surplus farm labor may move from rural areas to industrial areas, causing unemployment. 
A)  diminishing returns may be encountered in increasing total output. 
B)  population increases may dissipate the increase in real output. 
C)  disguised unemployment in agriculture will persist. 
D)  surplus farm labor may move from rural areas to industrial areas, causing unemployment.

Question 12

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

Accepted Answer

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

Question 13

The idea that a person's productive efforts and his or her economic rewards are unrelated

Accepted Answer

A)  is the neocolonialism view of economic development. 
B)  describes the vicious circle of poverty. 
C)  is the surplus labor theory of economic development. 
D)  is the capricious universe view. 
A)  is the neocolonialism view of economic development. 
B)  describes the vicious circle of poverty. 
C)  is the surplus labor theory of economic development. 
D)  is the capricious universe view.

Question 14

The richest 20 percent of the world's population receives more than 75 percent of the world's
income, while the poorest 20 percent receives less than 2 percent of the world's income.

Accepted Answer

A) True 
 B)False

Question 15

Describe the vicious circle of poverty.

Accepted Answer

The vicious circle of poverty is a probl

Question 16

The levels of national income per capita among developing countries (DVCs) are

Accepted Answer

A)  all within a narrow range. 
B)  widely varied. 
C)  all growing rapidly. 
D)  about half of those of industrially advanced countries (IACs). 
A)  all within a narrow range. 
B)  widely varied. 
C)  all growing rapidly. 
D)  about half of those of industrially advanced countries (IACs).

Question 17

Per capita income in the United States in 2017 was about

Accepted Answer

A)  $25,300 per person. 
B)  $36,300 per person. 
C)  $60,200 per person. 
D)  $78,800 per person. 
A)  $25,300 per person. 
B)  $36,300 per person. 
C)  $60,200 per person. 
D)  $78,800 per person.

Question 18

The international organization, with 189 member nations, whose major objective is to help DVCs achieve economic growth is the

Accepted Answer

A)  World Trade Organization. 
B)  World Bank. 
C)  G8 Nations. 
D)  United Nations. 
A)  World Trade Organization. 
B)  World Bank. 
C)  G8 Nations. 
D)  United Nations.

Question 19

Industrially advanced countries can best help DVCs by

Accepted Answer

A)  directing requests from DVCs for aid to the World Bank. 
B)  using the International Monetary Fund to determine exchange rates in DVCs. 
C)  increasing management control over development projects. 
D)  adopting policies that expand trade with DVCs. 
A)  directing requests from DVCs for aid to the World Bank. 
B)  using the International Monetary Fund to determine exchange rates in DVCs. 
C)  increasing management control over development projects. 
D)  adopting policies that expand trade with DVCs.

Question 20

If a local leader in a developing nation claims that there is little or no correlation between a person's efforts and the economic rewards that are given to that person, this leader is most likely expressing
A

Accepted Answer

A)  description of the vicious cycle of poverty. 
B)  theory of exploitation and dependence. 
C)  capricious view of the universe. 
D)  rationale for neocolonialism. 
A)  description of the vicious cycle of poverty. 
B)  theory of exploitation and dependence. 
C)  capricious view of the universe. 
D)  rationale for neocolonialism.

Exam 22: The Economics of Developing Countries

Which of the following is characteristic of DVCs?

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

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

Discuss the "one child per family" policy implemented in China. Why did it need to be overturned?

The diversion of surplus labor in agriculture to the production of schools or roads in developing countries is described as

Development experts are less enthusiastic than they used to be about three decades ago about the positive role of DVC governments in promoting economic growth in their less-developed nations Because of the

Investment in-kind refers to the possibility that

Most of the ﬂow of foreign aid goes to

The corruption and poor administration that are common to the public sectors of many DVCs suggest that government may not be very effective in promoting economic growth.

A reason for placing emphasis on capital accumulation in developing countries is the high

Increases in the total real output of many DVCs do not increase the nation's standard of living because

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 low-income developing countries (DVCs), according to the World Bank?

The idea that a person's productive efforts and his or her economic rewards are unrelated

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Describe the vicious circle of poverty.

The levels of national income per capita among developing countries (DVCs) are

Per capita income in the United States in 2017 was about

The international organization, with 189 member nations, whose major objective is to help DVCs achieve economic growth is the

Industrially advanced countries can best help DVCs by

If a local leader in a developing nation claims that there is little or no correlation between a person's efforts and the economic rewards that are given to that person, this leader is most likely expressing A

The Market System and the Circular Flow

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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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