Question 1

In order for a country to develop a high per capita GDP, it must have a rich endowment of natural resources, particularly energy and mineral resources. ​

Accepted Answer

A) True 
 B)False

Question 2

Which of the following provides the best explanation of why low-income countries generally remain poor?

Accepted Answer

A)  Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B)  They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C)  They are poorly endowed with natural resources, which are essential for long-term rapid growth. 
D)  When the average income level is low, workers have little incentive to earn higher incomes. 
A)  Their political environment and policies often discourage productive activity and reduce the potential gains from specialization and exchange. 
B)  They are oppressed by developed nations that benefit from the cheap goods available from countries with low wage rates. 
C)  They are poorly endowed with natural resources, which are essential for long-term rapid growth. 
D)  When the average income level is low, workers have little incentive to earn higher incomes.

Question 3

Which of the following represents a problem with using per capita GDP to compare standards of living between less-developed and industrially advanced countries? ​​

Accepted Answer

A)  ​ GDP per capita does not take into account differences in population between countries. 
B)  ​ GDP is particularly difficult to measure in industrially advanced countries because a much larger percentage of economic activity occurs outside of officially measured market activity than in less-developed countries. 
C)  ​ GDP per capita will overstate the prevailing standard of living for the average person in countries with extreme levels of income inequality. 
D)  ​ None of the above are correct. 
A)  ​ GDP per capita does not take into account differences in population between countries. 
B)  ​ GDP is particularly difficult to measure in industrially advanced countries because a much larger percentage of economic activity occurs outside of officially measured market activity than in less-developed countries. 
C)  ​ GDP per capita will overstate the prevailing standard of living for the average person in countries with extreme levels of income inequality. 
D)  ​ None of the above are correct.

Question 4

Which of the following can be a barrier to an LDC's economic growth and development?

Accepted Answer

A)  Low population growth. 
B)  A low level of human capital. 
C)  Faster capital accumulation. 
D)  More infrastructure. 
A)  Low population growth. 
B)  A low level of human capital. 
C)  Faster capital accumulation. 
D)  More infrastructure.

Question 5

In general, GDP per capita is not highly correlated with alternative measures of quality of life.

Accepted Answer

A) True 
 B)False

Question 6

Infrastructure investment appears to have little impact on economic growth and development. ​

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a characteristic of less-developed countries?

Accepted Answer

A)  High rates of illiteracy. 
B)  High unemployment. 
C)  Over half of the labor force in agriculture. 
D)  Low savings and investment rates. 
E)  Low infant mortality rates. 
A)  High rates of illiteracy. 
B)  High unemployment. 
C)  Over half of the labor force in agriculture. 
D)  Low savings and investment rates. 
E)  Low infant mortality rates.

Question 8

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.

Accepted Answer

A) True 
 B)False

Question 9

If a nation remains poor over time, it could be that:

Accepted Answer

A)  c and e. 
B)  d and e. 
C)  the population growth rate is at least as much as the national GDP growth rate. 
D)  the per capita real GDP growth rate is larger than the population growth rate. 
E)  the national real GDP growth rate is lower than the population growth rate. 
A)  c and e. 
B)  d and e. 
C)  the population growth rate is at least as much as the national GDP growth rate. 
D)  the per capita real GDP growth rate is larger than the population growth rate. 
E)  the national real GDP growth rate is lower than the population growth rate.

Question 10

Which of the following distinguishes industrially advanced countries from less-developed countries?

Accepted Answer

A)  GDP per capita. 
B)  Educational attainment of the workforce. 
C)  Extent to which capital is technologically advanced. 
D)  All of the above. 
A)  GDP per capita. 
B)  Educational attainment of the workforce. 
C)  Extent to which capital is technologically advanced. 
D)  All of the above.

Question 11

What is the economic criterion most often used to compare living standards across countries?

Accepted Answer

A)  Real GDP growth. 
B)  Unemployment rate. 
C)  Incidence of AIDS. 
D)  Rate of population growth. 
E)  Real per capita GDP. 
A)  Real GDP growth. 
B)  Unemployment rate. 
C)  Incidence of AIDS. 
D)  Rate of population growth. 
E)  Real per capita GDP.

Question 12

Waste systems and highways are part of a nation's infrastructure.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is infrastructure?

Accepted Answer

A)  Schools. 
B)  Roads. 
C)  Public health and sanitation services. 
D)  All of the above. 
A)  Schools. 
B)  Roads. 
C)  Public health and sanitation services. 
D)  All of the above.

Question 14

Of the following choices, which is the best example of a nation's economic infrastructure?

Accepted Answer

A)  Natural resources. 
B)  Highway system. 
C)  Government. 
D)  Religious and cultural beliefs. 
E)  Population growth rate. 
A)  Natural resources. 
B)  Highway system. 
C)  Government. 
D)  Religious and cultural beliefs. 
E)  Population growth rate.

Question 15

There is a significant positive relationship between ____ and ____.

Accepted Answer

A)  natural resource commodity exports, high levels of per capita GDP 
B)  investment in capital, high levels of per capita GDP 
C)  high levels of illiteracy, high levels of per capita GDP 
D)  limited government recognition of land tenure and property ownership, high levels of per capita GDP 
A)  natural resource commodity exports, high levels of per capita GDP 
B)  investment in capital, high levels of per capita GDP 
C)  high levels of illiteracy, high levels of per capita GDP 
D)  limited government recognition of land tenure and property ownership, high levels of per capita GDP

Question 16

If a country's population growth rate exceeds the growth rate in its GDP, which of the following is true ?

Accepted Answer

A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above. 
A)  Per capita GDP is rising. 
B)  Per capita GDP is not changing. 
C)  Per capita GDP is falling. 
D)  None of the above.

Question 17

If national real GDP grows at twice the rate of population growth,

Accepted Answer

A)  c and e. 
B)  eventually there will be too much GDP. 
C)  per real capita GDP will double each year. 
D)  per real capita GDP will be reduced by half each year. 
E)  per real capita GDP growth will double each year. 
A)  c and e. 
B)  eventually there will be too much GDP. 
C)  per real capita GDP will double each year. 
D)  per real capita GDP will be reduced by half each year. 
E)  per real capita GDP growth will double each year.

Question 18

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

Accepted Answer

A)  Development of strong labor unions. 
B)  More foreign investment, attracted by the expectation of economic and political stability. 
C)  Adoption of trade barriers (higher tariffs and quotas). 
D)  Widespread use of price controls to allocate goods and resources. 
A)  Development of strong labor unions. 
B)  More foreign investment, attracted by the expectation of economic and political stability. 
C)  Adoption of trade barriers (higher tariffs and quotas). 
D)  Widespread use of price controls to allocate goods and resources.

Question 19

In order for Ethiopia to increase its future economic growth, it must choose a point that is

Accepted Answer

A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve. 
A)  below its production possibilities curve. 
B)  further along on its production possibilities curve toward the capital goods axis. 
C)  further along on its production possibilities curve toward the consumption goods axis. 
D)  further along on its production possibilities curve away from the population axis. 
E)  above its production possibilities curve.

Question 20

Which of the following is not a problem for less-developed countries?

Accepted Answer

A)  Poor health and nutrition. 
B)  Shortages of labor. 
C)  High unemployment rates. 
D)  Low labor productivity. 
E)  low life expectancy 
A)  Poor health and nutrition. 
B)  Shortages of labor. 
C)  High unemployment rates. 
D)  Low labor productivity. 
E)  low life expectancy

Exam 23: Growth and the Less-Developed Countries

In order for a country to develop a high per capita GDP, it must have a rich endowment of natural resources, particularly energy and mineral resources. ​

Which of the following provides the best explanation of why low-income countries generally remain poor?

Which of the following represents a problem with using per capita GDP to compare standards of living between less-developed and industrially advanced countries? ​​

Which of the following can be a barrier to an LDC's economic growth and development?

In general, GDP per capita is not highly correlated with alternative measures of quality of life.

Infrastructure investment appears to have little impact on economic growth and development. ​

Which of the following is not a characteristic of less-developed countries?

A country with a high GDP per capita can be classified as an industrially advanced country (IAC) regardless of its industrial development.

If a nation remains poor over time, it could be that:

Which of the following distinguishes industrially advanced countries from less-developed countries?

What is the economic criterion most often used to compare living standards across countries?

Waste systems and highways are part of a nation's infrastructure.

Which of the following is infrastructure?

Of the following choices, which is the best example of a nation's economic infrastructure?

There is a significant positive relationship between ____ and ____.

If a country's population growth rate exceeds the growth rate in its GDP, which of the following is true ?

If national real GDP grows at twice the rate of population growth,

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

In order for Ethiopia to increase its future economic growth, it must choose a point that is

Which of the following is not a problem for less-developed countries?

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

In order for a country to develop a high per capita GDP, it must have a rich endowment of natural resources, particularly energy and mineral resources.

Which of the following represents a problem with using per capita GDP to compare standards of living between less-developed and industrially advanced countries?

Infrastructure investment appears to have little impact on economic growth and development.

There is a significant positive relationship between and .