Question 1

Which of the following characterizes the IACs?

Accepted Answer

A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment. 
A)  High per capita GDP growth and high population growth. 
B)  Low per capita GDP growth and low population growth. 
C)  Low per capital GDP growth and high savings rate. 
D)  Low human capital investment. B

Question 2

Which of the following explains the vicious circle of poverty?

Accepted Answer

A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but they cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods. 
E)  There are dual economies in the world: Some are meant to be rich and others are meant to be poor. 
A)  By investing in education and infrastructure at the same time, the country can overcome the problems of poverty. 
B)  Poverty arises out of the lack of investment, but they cannot invest because they are poor. 
C)  A nation can shift its production possibilities curve inward by shifting more resources into the production of capital goods. 
D)  A nation can shift its production possibilities curve outward by shifting more resources into the production of consumer goods. 
E)  There are dual economies in the world: Some are meant to be rich and others are meant to be poor. B

Question 3

The economies of most less-developed countries (LDCs) are based on:

Accepted Answer

A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil. 
A)  agriculture. 
B)  manufacturing. 
C)  services. 
D)  oil. A

Question 4

Compared to IACs, LDCs are often characterized by:

Accepted Answer

A)  lower life expectancy. 
B)  lower adult literacy. 
C)  lower per capita energy consumption. 
D)  All of the above. 
A)  lower life expectancy. 
B)  lower adult literacy. 
C)  lower per capita energy consumption. 
D)  All of the above.

Question 5

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

Accepted Answer

A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland. 
A)  Singapore. 
B)  Hong Kong. 
C)  United Arab Emirates. 
D)  Ireland.

Question 6

An industrially advanced country (IAC) is defined as a country with a GDP per capita among the top ____ countries in the world.

Accepted Answer

A)  5 
B)  10 
C)  20 
D)  27 
A)  5 
B)  10 
C)  20 
D)  27

Question 7

To grow and prosper, less-developed countries must not:

Accepted Answer

A)  invest in human capital. 
B)  build a strong infrastructure. 
C)  shift resources out of the production of consumer goods and into the production of capital goods. 
D)  shift resources out of the production of capital goods and into the production of consumer goods 
E)  improve the quality of the water supply 
A)  invest in human capital. 
B)  build a strong infrastructure. 
C)  shift resources out of the production of consumer goods and into the production of capital goods. 
D)  shift resources out of the production of capital goods and into the production of consumer goods 
E)  improve the quality of the water supply

Question 8

Political instability is a deterrent to long-term private investment.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is infrastructure?

Accepted Answer

A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of the above. 
A)  IBM computer plant. 
B)  Training and education. 
C)  Services of doctors. 
D)  None of the above.

Question 10

Which of the following factors would be most likely to encourage investment and capital formation in a less-developed nation?

Accepted Answer

A)  High and variable rates of inflation. 
B)  Tariffs and quotas that restrict international trade. 
C)  A legal system that provides for secure property rights and evenhanded enforcement of contracts. 
D)  High marginal tax rates. 
A)  High and variable rates of inflation. 
B)  Tariffs and quotas that restrict international trade. 
C)  A legal system that provides for secure property rights and evenhanded enforcement of contracts. 
D)  High marginal tax rates.

Question 11

The poorest regions in the world, as measured by GDP per capita, are:

Accepted Answer

A)  Latin America and the Caribbean. 
B)  the Middle East and North Africa. 
C)  Sub-Saharan Africa and South Asia. 
D)  Australia and New Zealand. 
A)  Latin America and the Caribbean. 
B)  the Middle East and North Africa. 
C)  Sub-Saharan Africa and South Asia. 
D)  Australia and New Zealand.

Question 12

Which of the following best defines the vicious circle of poverty?

Accepted Answer

A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit. 
A)  Countries are poor because they cannot afford to save and invest. 
B)  Countries are poor because of high population growth. 
C)  Countries are poor because of lack of education and training for workers. 
D)  Countries are poor because of poor international credit.

Question 13

Which of the following is infrastructure?

Accepted Answer

A)  Highways. 
B)  Bridges. 
C)  Airports. 
D)  All of the above. 
A)  Highways. 
B)  Bridges. 
C)  Airports. 
D)  All of the above.

Question 14

Which of the following makes long-term low-interest loans to LDCs?

Accepted Answer

A)  Agency for International Development (AI
D) . 
B)  World Bank. 
C)  International Monetary Fund (IMF). 
D)  New International Economic Order (NIEO). 
A)  Agency for International Development (AI
D) . 
B)  World Bank. 
C)  International Monetary Fund (IMF). 
D)  New International Economic Order (NIEO).

Question 15

According to the text, Singapore is classified as a less developed country (LDC).

Accepted Answer

A) True 
 B)False

Question 16

A country with a high GDP per capita is classified as an industrially advanced country (IAC).

Accepted Answer

A) True 
 B)False

Question 17

Investment in both physical and human capital enhances economic growth because it:

Accepted Answer

A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages. 
A)  increases consumption during the current period. 
B)  makes it possible for individuals to produce more goods and services per hour worked. 
C)  encourages firms to expand output by employing more low-productivity workers. 
D)  encourages workers to unionize and, thereby, fight for higher wages.

Question 18

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

Accepted Answer

A)  The development of strong labor unions. 
B)  A sharp increase in the legal minimum wage. 
C)  An increase in expenditures on education and capital investment. 
D)  Rapid growth rate of the money supply. 
A)  The development of strong labor unions. 
B)  A sharp increase in the legal minimum wage. 
C)  An increase in expenditures on education and capital investment. 
D)  Rapid growth rate of the money supply.

Question 19

Which of the following is not evidence of the lower standard of living among less-developed countries?

Accepted Answer

A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate. 
A)  High per capita real GDP. 
B)  High percentage of households headed by females. 
C)  High infant mortality rate. 
D)  Low life expectancy. 
E)  High birth rate.

Question 20

Which of the following is true ?

Accepted Answer

A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital. 
A)  Nations achieve high rates of economic growth primarily because of their natural resource endowments. 
B)  Human and physical capital investments are largely irrelevant to economic growth. 
C)  Poor nations grow slowly because they do not have access to modern technology. 
D)  A favorable political environment attracts more investment in human and physical capital.

Exam 23: Growth and the Less-Developed Countries

Which of the following characterizes the IACs?

Which of the following explains the vicious circle of poverty?

The economies of most less-developed countries (LDCs) are based on:

Compared to IACs, LDCs are often characterized by:

According to the classification in the text, which of the following is not an industrially advanced country (IAC)?

An industrially advanced country (IAC) is defined as a country with a GDP per capita among the top ____ countries in the world.

To grow and prosper, less-developed countries must not:

Political instability is a deterrent to long-term private investment.

Which of the following is infrastructure?

Which of the following factors would be most likely to encourage investment and capital formation in a less-developed nation?

The poorest regions in the world, as measured by GDP per capita, are:

Which of the following best defines the vicious circle of poverty?

Which of the following is infrastructure?

Which of the following makes long-term low-interest loans to LDCs?

According to the text, Singapore is classified as a less developed country (LDC).

A country with a high GDP per capita is classified as an industrially advanced country (IAC).

Investment in both physical and human capital enhances economic growth because it:

Which of the following would be most likely to improve the standard of living of the residents of a less-developed country?

Which of the following is not evidence of the lower standard of living among less-developed countries?

Which of the following is true ?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Filters