Question 1

If real GDP is increasing more rapidly than population:

Accepted Answer

A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing. 
A)  population must be declining. 
B)  the country will have to export more than it imports. 
C)  the general level of prices must be increasing. 
D)  per capita real GDP will be increasing.

Question 2

Which of the following statements draws a false conclusion?

Accepted Answer

A)  Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. 
B)  Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. 
C)  Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. 
D)  Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP. 
E)  The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty. 
A)  Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. 
B)  Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. 
C)  Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. 
D)  Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP. 
E)  The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty.

Question 3

Economists believe that political instability can facilitate economic development in an LDC by making its citizens more open to change and new technology.

Accepted Answer

A) True 
 B)False

Question 4

If population grows faster than GDP, then per capita GDP must fall.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following does not hinder economic development?

Accepted Answer

A)  Lack of education 
B)  Poor agricultural productivity 
C)  Low investment in human capital 
D)  Lack of technology 
E)  Good nutrition 
A)  Lack of education 
B)  Poor agricultural productivity 
C)  Low investment in human capital 
D)  Lack of technology 
E)  Good nutrition

Question 6

Exhibit 23-1  Nation of Padia   Exhibit 23-1 shows the production possibility curve of the nation of Padia. Based only on this information, the point which would produce the highest rate of growth would be:

Accepted Answer

A)  I 
B)  II 
C)  III 
D)  IV 
E)  V 
A)  I 
B)  II 
C)  III 
D)  IV 
E)  V

Question 7

Less-developed countries are poor for all of the following reasons except one. Which one?

Accepted Answer

A)  They do not produce many goods and services. 
B)  Labor productivity is low. 
C)  Investment funds tend to flow abroad 
D)  Investment in human capital is very low. 
E)  The labor force is too small. 
A)  They do not produce many goods and services. 
B)  Labor productivity is low. 
C)  Investment funds tend to flow abroad 
D)  Investment in human capital is very low. 
E)  The labor force is too small.

Question 8

Which of the following best describes the vicious cycle of poverty? ​

Accepted Answer

A)  ​ Rich countries eventually decline because its citizens become lazy. 
B)  ​ Poor countries eventually improve through investment in education, infrastructure, and capital accumulation. 
C)  ​ Rich countries stay rich through continued high levels of investment in education, infrastructure, and capital accumulation. 
D)  ​ Poor countries stay poor because they cannot afford to invest in education, infrastructure, and capital accumulation. 
A)  ​ Rich countries eventually decline because its citizens become lazy. 
B)  ​ Poor countries eventually improve through investment in education, infrastructure, and capital accumulation. 
C)  ​ Rich countries stay rich through continued high levels of investment in education, infrastructure, and capital accumulation. 
D)  ​ Poor countries stay poor because they cannot afford to invest in education, infrastructure, and capital accumulation.

Question 9

The "Four Tigers" of East Asia are the newly industrialized countries of Taiwan, South Korea, Hong Kong, and:

Accepted Answer

A)  Japan. 
B)  Singapore. 
C)  the Philippines. 
D)  Vietnam. 
A)  Japan. 
B)  Singapore. 
C)  the Philippines. 
D)  Vietnam.

Question 10

Describe in general terms four or five characteristics of less-developed countries.

Accepted Answer

Less-developed countries have high popul

Question 11

Which of the following is in charge of U.S. aid to foreign countries?

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 12

"Countries are poor because they cannot afford to save and invest" is called the:

Accepted Answer

A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit. 
A)  vicious circle of poverty. 
B)  savings-investment trap. 
C)  LDC trap. 
D)  cycle of insufficient credit.

Question 13

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

Accepted Answer

A)  Development of strong labor unions. 
B)  More rapid population growth. 
C)  Investment expenditures that enhance the human capital of labor force participants. 
D)  An international minimum wage law. 
A)  Development of strong labor unions. 
B)  More rapid population growth. 
C)  Investment expenditures that enhance the human capital of labor force participants. 
D)  An international minimum wage law.

Question 14

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

Accepted Answer

A)  United Arab Emirates. 
B)  Israel. 
C)  Greece. 
D)  All of the above are IACs. 
E)  None of the above are IACs. 
A)  United Arab Emirates. 
B)  Israel. 
C)  Greece. 
D)  All of the above are IACs. 
E)  None of the above are IACs.

Question 15

In general, GDP per capita is highly correlated with alternative measures of quality of life.

Accepted Answer

A) True 
 B)False

Question 16

According to the text, Singapore and Hong Kong are classified as industrially advanced countries (IACs).

Accepted Answer

A) True 
 B)False

Question 17

When a nation's political environment is more favorable, it will:

Accepted Answer

A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of the above. 
A)  attract more physical investment. 
B)  encourage individuals to invest more heavily in human capital. 
C)  encourage the development and efficient use of natural resources. 
D)  do all of the above.

Question 18

If an economy's population grows at 3 percent and GDP grows at 4 percent, then:

Accepted Answer

A)  per capita real GDP is declining. 
B)  the economy's standard of living is decreasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment. 
A)  per capita real GDP is declining. 
B)  the economy's standard of living is decreasing. 
C)  per capita real GDP is negative. 
D)  per capita real GDP is growing. 
E)  the economy is experiencing unemployment.

Question 19

GDP per capita is about 10 times higher in industrially advanced countries (IACs) than in the poorer less-developed countries (LDCs).

Accepted Answer

A) True 
 B)False

Question 20

Real GDP per capita and other alternative measures of the quality of life are:

Accepted Answer

A)  independent. 
B)  directly correlated. 
C)  poorly correlated. 
D)  inversely related. 
A)  independent. 
B)  directly correlated. 
C)  poorly correlated. 
D)  inversely related.

Exam 23: Growth and the Less-Developed Countries

If real GDP is increasing more rapidly than population:

Which of the following statements draws a false conclusion?

Economists believe that political instability can facilitate economic development in an LDC by making its citizens more open to change and new technology.

If population grows faster than GDP, then per capita GDP must fall.

Which of the following does not hinder economic development?

Exhibit 23-1 Nation of Padia Exhibit 23-1 shows the production possibility curve of the nation of Padia. Based only on this information, the point which would produce the highest rate of growth would be:

Less-developed countries are poor for all of the following reasons except one. Which one?

Which of the following best describes the vicious cycle of poverty? ​

The "Four Tigers" of East Asia are the newly industrialized countries of Taiwan, South Korea, Hong Kong, and:

Describe in general terms four or five characteristics of less-developed countries.

Which of the following is in charge of U.S. aid to foreign countries?

"Countries are poor because they cannot afford to save and invest" is called the:

Which of the following would be most likely to cause the per capita income of less-developed countries to rise?

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

In general, GDP per capita is highly correlated with alternative measures of quality of life.

According to the text, Singapore and Hong Kong are classified as industrially advanced countries (IACs).

When a nation's political environment is more favorable, it will:

If an economy's population grows at 3 percent and GDP grows at 4 percent, then:

GDP per capita is about 10 times higher in industrially advanced countries (IACs) than in the poorer less-developed countries (LDCs).

Real GDP per capita and other alternative measures of the quality of life are:

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

Which of the following best describes the vicious cycle of poverty?