Question 1

Economists would most likely suggest that advanced nations can best assist in the economic development of developing nations by

Accepted Answer

A)  increasing the amount of military aid to strengthen the government's role in providing law and order. 
B)  increasing trade barriers so that less-developed nations will become more self-suﬃcient. 
C)  reducing trade barriers and increasing the amount of private and public capital. 
D)  decreasing the amounts of private capital or foreign aid to reduce the level of neocolonialism. 
A)  increasing the amount of military aid to strengthen the government's role in providing law and order. 
B)  increasing trade barriers so that less-developed nations will become more self-suﬃcient. 
C)  reducing trade barriers and increasing the amount of private and public capital. 
D)  decreasing the amounts of private capital or foreign aid to reduce the level of neocolonialism.

Question 2

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

Accepted Answer

A)  population growth for a greater labor supply. 
B)  output and slow down their population growth. 
C)  birth rates to expand their available resources. 
D)  mortality rates to slow down their population growth. 
A)  population growth for a greater labor supply. 
B)  output and slow down their population growth. 
C)  birth rates to expand their available resources. 
D)  mortality rates to slow down their population growth.

Question 3

Which of the following would most help a developing country (DVC) break out of the vicious circle of poverty?

Accepted Answer

A)  more consumption 
B)  more food production 
C)  an increase in the birth rate 
D)  an increase in labor productivity 
A)  more consumption 
B)  more food production 
C)  an increase in the birth rate 
D)  an increase in labor productivity

Question 4

One reason why foreign aid is viewed as harmful is that it promotes dependency.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which attitude or custom is the most conducive to long-term economic growth?

Accepted Answer

A)  a focus on group contentment rather than individual achievement 
B)  the belief that there is little or no correlation between an individual's economic actions and her or his economic fortunes 
C)  the belief that there is a direct connection between individual efforts (including educational efforts) and economic rewards 
D)  the use of the majority of resources for religious structures and ceremonies 
A)  a focus on group contentment rather than individual achievement 
B)  the belief that there is little or no correlation between an individual's economic actions and her or his economic fortunes 
C)  the belief that there is a direct connection between individual efforts (including educational efforts) and economic rewards 
D)  the use of the majority of resources for religious structures and ceremonies

Question 7

Rapid population growth can be an obstacle to economic development

Accepted Answer

A)  because it can translate a relatively large increase in real output into a small increase in real output per capita. 
B)  because more investment will be required to simply maintain the quantity of capital goods per person. 
C)  because it may lead to the overutilization and therefore ecological degradation of farmland. 
D)  for all of these reasons. 
A)  because it can translate a relatively large increase in real output into a small increase in real output per capita. 
B)  because more investment will be required to simply maintain the quantity of capital goods per person. 
C)  because it may lead to the overutilization and therefore ecological degradation of farmland. 
D)  for all of these reasons.

Question 8

Avenues for the government to foster economic growth and development include the following, except

Accepted Answer

A)  nationalization and protection of domestic industries. 
B)  establishing the rule of law and protection of property rights. 
C)  building infrastructure and technological support. 
D)  building human capital and promoting entrepreneurship. 
A)  nationalization and protection of domestic industries. 
B)  establishing the rule of law and protection of property rights. 
C)  building infrastructure and technological support. 
D)  building human capital and promoting entrepreneurship.

Question 9

The World Bank seeks to

Accepted Answer

A)  provide ﬁnancial backing for the work of the International Monetary Fund. 
B)  maintain stable exchange rates in the currencies of developing countries. 
C)  assist developing countries in achieving economic growth. 
D)  maximize its proﬁts for its worldwide shareholders. 
A)  provide ﬁnancial backing for the work of the International Monetary Fund. 
B)  maintain stable exchange rates in the currencies of developing countries. 
C)  assist developing countries in achieving economic growth. 
D)  maximize its proﬁts for its worldwide shareholders.

Question 10

The World Bank

Accepted Answer

A)  is also known as the International Monetary Fund (IMF). 
B)  lends money to developing nations for basic infrastructure projects such as dams, irrigation, health and sanitation, communications, and transportation. 
C)  is an aﬃliate of the World Trade Organization (WTO). 
D)  provides subsidies to private ﬁrms so they can improve their wages and working conditions. 
A)  is also known as the International Monetary Fund (IMF). 
B)  lends money to developing nations for basic infrastructure projects such as dams, irrigation, health and sanitation, communications, and transportation. 
C)  is an aﬃliate of the World Trade Organization (WTO). 
D)  provides subsidies to private ﬁrms so they can improve their wages and working conditions.

Question 11

Which of the following is a major obstacle to economic growth in DVCs?

Accepted Answer

A)  a fall in population growth 
B)  a decline in demographic transition 
C)  the low demand for natural resources 
D)  the low supply of saving 
A)  a fall in population growth 
B)  a decline in demographic transition 
C)  the low demand for natural resources 
D)  the low supply of saving

Question 12

Capital ﬂight is a problem facing DVCs that involves the

Accepted Answer

A)  diﬃculty of sustaining skilled workers in the government sector of the DVC economies. 
B)  transfer of private savings from DVCs to IACs. 
C)  ﬂight of agricultural workers from rural to urban areas, especially capital cities, to take advantage of better job opportunities. 
D)  movement of capital goods from IACs to DVCs to avoid taxes. 
A)  diﬃculty of sustaining skilled workers in the government sector of the DVC economies. 
B)  transfer of private savings from DVCs to IACs. 
C)  ﬂight of agricultural workers from rural to urban areas, especially capital cities, to take advantage of better job opportunities. 
D)  movement of capital goods from IACs to DVCs to avoid taxes.

Question 13

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Accepted Answer

A)  capital using. 
B)  capital saving. 
C)  capital intensive. 
D)  an in-kind investment. 
A)  capital using. 
B)  capital saving. 
C)  capital intensive. 
D)  an in-kind investment.

Question 14

Underemployment occurs

Accepted Answer

A)  when workers do not have jobs. 
B)  when farm workers become more productive. 
C)  when workers are working fewer hours than they desire or when they are working less productively than they are capable of. 
D)  in IACs but not in the DVCs. 
A)  when workers do not have jobs. 
B)  when farm workers become more productive. 
C)  when workers are working fewer hours than they desire or when they are working less productively than they are capable of. 
D)  in IACs but not in the DVCs.

Question 15

Which of the following IACs (industrially advanced countries) was the leading provider of development assistance to DVCs (developing countries) in 2017, in terms of absolute dollar
Amounts?

Accepted Answer

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

Question 16

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

Accepted Answer

A)  admitting more temporary workers from DVCs 
B)  reducing the amount of debt relief for DVCs to make them less dependent 
C)  eliminating loans from the World Bank because it encourages bureaucracy 
D)  eliminating ﬁnancial control of central banks where they have been established 
A)  admitting more temporary workers from DVCs 
B)  reducing the amount of debt relief for DVCs to make them less dependent 
C)  eliminating loans from the World Bank because it encourages bureaucracy 
D)  eliminating ﬁnancial control of central banks where they have been established

Question 17

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

Accepted Answer

A)  are reluctant to become entrepreneurs. 
B)  are concentrated in rural areas where their skills are underutilized. 
C)  often immigrate to industrialized countries. 
D)  are reluctant to work in the public sector. 
A)  are reluctant to become entrepreneurs. 
B)  are concentrated in rural areas where their skills are underutilized. 
C)  often immigrate to industrialized countries. 
D)  are reluctant to work in the public sector.

Question 18

The traditional view regarding population and growth in DVCs is that

Accepted Answer

A)  the most important factor affecting population growth in DVCs is per capita consumption of energy. 
B)  unemployment and underemployment are the major sources of population growth in DVCs. 
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 per capita consumption of energy. 
B)  unemployment and underemployment are the major sources of population growth in DVCs. 
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 19

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

Accepted Answer

A)  The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B)  Capital ﬂight reduces investment opportunities and the need for saving in DVCs. 
C)  There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D)  The domestic output of DVCs is so low that the absolute volume of saving is small. 
A)  The interest rate paid on money kept in a bank in DVCs is not as high as the interest rate on money kept in a bank in an IAC. 
B)  Capital ﬂight reduces investment opportunities and the need for saving in DVCs. 
C)  There is a continual brain drain that removes skilled labor from the work force and reduces labor productivity and the need for saving. 
D)  The domestic output of DVCs is so low that the absolute volume of saving is small.

Question 20

Brazil, Mexico, and Thailand are referred to as

Accepted Answer

A)  industrially advanced countries. 
B)  upper-middle-income developing countries. 
C)  low-income developing countries. 
D)  command economies. 
A)  industrially advanced countries. 
B)  upper-middle-income developing countries. 
C)  low-income developing countries. 
D)  command economies.

Exam 22: The Economics of Developing Countries

Economists would most likely suggest that advanced nations can best assist in the economic development of developing nations by

Development economists suggest that a key strategy for the poorest DVCs to break out of their poverty is to implement policies that boost their

Which of the following would most help a developing country (DVC) break out of the vicious circle of poverty?

One reason why foreign aid is viewed as harmful is that it promotes dependency.

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

Which attitude or custom is the most conducive to long-term economic growth?

Rapid population growth can be an obstacle to economic development

Avenues for the government to foster economic growth and development include the following, except

The World Bank seeks to

The World Bank

Which of the following is a major obstacle to economic growth in DVCs?

Capital ﬂight is a problem facing DVCs that involves the

A new fertilizer that is better suited to a nation's topography and climate is an example of a technological advance that is

Underemployment occurs

Which of the following IACs (industrially advanced countries) was the leading provider of development assistance to DVCs (developing countries) in 2017, in terms of absolute dollar Amounts?

Which of the following is a recommended policy for industrially advanced countries to adopt in order to foster economic growth in DVCs?

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

The traditional view regarding population and growth in DVCs is that

What is the problem with saving in DVCs, even when saving as a percentage of domestic output is the same as in industrially advanced countries?

Brazil, Mexico, and Thailand are referred to as

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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