Question 1

The more modest alternative to the big-push approach, unbalanced development strategy investments, relies on

Accepted Answer

A)  government planning and financing 
B)  domestic entrepreneurial talent and private investment 
C)  direct foreign aid and investment 
D)  indirect foreign aid and World Bank aid 
E)  forward and backward linkages to offset each other 
A)  government planning and financing 
B)  domestic entrepreneurial talent and private investment 
C)  direct foreign aid and investment 
D)  indirect foreign aid and World Bank aid 
E)  forward and backward linkages to offset each other B

Question 2

-In Exhibit GG-2, you can explain Ronilla's superior economic performance by referring to all the following factors (not necessarily shown in the Exhibit) except

Accepted Answer

A)  more advanced technology 
B)  better quality land 
C)  greater population 
D)  higher levels of human capital 
E)  more political stability 
A)  more advanced technology 
B)  better quality land 
C)  greater population 
D)  higher levels of human capital 
E)  more political stability C

Question 3

A potential drawback to the big-push strategy in LDCs is that

Accepted Answer

A)  supply bottlenecks may occur that would undermine the all-at-once development process 
B)  there is a problem in choosing which sectors to develop first 
C)  private firms will avoid making the planned investment 
D)  it calls for vast movements of resources, including labor, which may not be possible because people are disinclined to move 
E)  it depends primarily on foreign aid which has proved to be an unreliable source of investment funding 
A)  supply bottlenecks may occur that would undermine the all-at-once development process 
B)  there is a problem in choosing which sectors to develop first 
C)  private firms will avoid making the planned investment 
D)  it calls for vast movements of resources, including labor, which may not be possible because people are disinclined to move 
E)  it depends primarily on foreign aid which has proved to be an unreliable source of investment funding A

Question 4

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

Accepted Answer

A)  high per capita income 
B)  high death rates 
C)  high infant mortality rate 
D)  low life expectancy 
E)  high birth rate 
A)  high per capita income 
B)  high death rates 
C)  high infant mortality rate 
D)  low life expectancy 
E)  high birth rate

Question 5

A big-push strategy for economic development relies heavily on government-sponsored and financed investments.

Accepted Answer

A) True 
 B)False

Question 6

Suppose you were told that Botswana had few skilled workers, a primitive banking system, and an inefficient and limited electric power industry. You would know that the person was describing was Botswana's problem with

Accepted Answer

A)  its economic infrastructure 
B)  political stability 
C)  its agricultural sector 
D)  its traditional values 
E)  poverty 
A)  its economic infrastructure 
B)  political stability 
C)  its agricultural sector 
D)  its traditional values 
E)  poverty

Question 7

Everyone working the land knows the usefulness of investing in land irrigation systems but those who work the land may choose not to invest in these profitable irrigation systems as long as

Accepted Answer

A)  the investments are too expensive 
B)  the natural climate, such as abundant rain, makes the irrigation projects unnecessary 
C)  the dual economy persists 
D)  the government dictates choice of investment 
E)  their property rights, with respect to the land and water, are subject to change 
A)  the investments are too expensive 
B)  the natural climate, such as abundant rain, makes the irrigation projects unnecessary 
C)  the dual economy persists 
D)  the government dictates choice of investment 
E)  their property rights, with respect to the land and water, are subject to change

Question 8

-In Exhibit GG-2, in order for the Magaran production possibilities curve to shift outward to equal the Ronillan curve, the Magarans must

Accepted Answer

A)  shift people out of capital goods production to food production 
B)  shift people out of food production to capital goods production 
C)  add resources, such as doubling its population 
D)  double their per capita food production while leaving unchanged their capital goods production and population 
E)  double their per capita capital investment while leaving unchanged their food production and population 
A)  shift people out of capital goods production to food production 
B)  shift people out of food production to capital goods production 
C)  add resources, such as doubling its population 
D)  double their per capita food production while leaving unchanged their capital goods production and population 
E)  double their per capita capital investment while leaving unchanged their food production and population

Question 9

Which of the following is not an obstacle to development for many less-developed countries?

Accepted Answer

A)  lack of industry 
B)  lack of infrastructure 
C)  interest rate ceilings 
D)  traditional skills 
E)  high savings rate 
A)  lack of industry 
B)  lack of infrastructure 
C)  interest rate ceilings 
D)  traditional skills 
E)  high savings rate

Question 10

Which continent best illustrates LDCs?

Accepted Answer

A)  Australia 
B)  South America 
C)  North America 
D)  Antarctica 
E)  Europe 
A)  Australia 
B)  South America 
C)  North America 
D)  Antarctica 
E)  Europe

Question 11

The big-push strategy of development relies mainly on private incentives and a laissez- faire government policy.

Accepted Answer

A) True 
 B)False

Question 12

Why do some economists prefer government planning and financing of big-push development to private sector development? Because

Accepted Answer

A)  private firms have a longer planning horizon than governments 
B)  governments have a longer planning horizon than private firms 
C)  private firms cannot collect taxes 
D)  it takes less initial start-up capital than any alternative development strategy 
E)  private firms create markets and government planning does not require market creation 
A)  private firms have a longer planning horizon than governments 
B)  governments have a longer planning horizon than private firms 
C)  private firms cannot collect taxes 
D)  it takes less initial start-up capital than any alternative development strategy 
E)  private firms create markets and government planning does not require market creation

Question 13

In LDCs, persistent poverty occurs because of preference for _______ , which results in ___________.

Accepted Answer

A)  large families; low levels of capital goods production 
B)  more consumption today; less consumption tomorrow 
C)  high birth rates; high death rates 
D)  high birth rates; low death rates 
E)  culture; an absence of assimilation 
A)  large families; low levels of capital goods production 
B)  more consumption today; less consumption tomorrow 
C)  high birth rates; high death rates 
D)  high birth rates; low death rates 
E)  culture; an absence of assimilation

Question 14

A singular important link between politics and economics in LDCs is that

Accepted Answer

A)  democracies are more productive than nondemocracies 
B)  democracies must constantly make difficult budgetary choices 
C)  political instability is incompatible with long-term private investment 
D)  conservatives prefer larger military budgets 
E)  liberals prefer higher education expenditures 
A)  democracies are more productive than nondemocracies 
B)  democracies must constantly make difficult budgetary choices 
C)  political instability is incompatible with long-term private investment 
D)  conservatives prefer larger military budgets 
E)  liberals prefer higher education expenditures

Question 15

Many unsuccessful, low performing LDCs have all of the following characteristics except

Accepted Answer

A)  political instability 
B)  reliance on custom and traditions 
C)  absence of infrastructure 
D)  high population growth 
E)  acceptance of new technology 
A)  political instability 
B)  reliance on custom and traditions 
C)  absence of infrastructure 
D)  high population growth 
E)  acceptance of new technology

Question 16

If a country has a large percentage of its population under 15 years old, then compared with other countries, this creates

Accepted Answer

A)  a problem because they consume more than they produce 
B)  a problem because they cause more capital goods to be produced 
C)  a benefit because they boost demand for consumption goods 
D)  a benefit because they cause more capital goods to be produced 
E)  neither a problem nor a benefit since age is irrelevant 
A)  a problem because they consume more than they produce 
B)  a problem because they cause more capital goods to be produced 
C)  a benefit because they boost demand for consumption goods 
D)  a benefit because they cause more capital goods to be produced 
E)  neither a problem nor a benefit since age is irrelevant

Question 17

If the death rate and the birth rate both fall, then

Accepted Answer

A)  the population growth rate falls 
B)  the population growth rate rises 
C)  per capita GDP rises 
D)  per capita GDP falls 
E)  the effects on population or GDP growth cannot be determined from the information 
A)  the population growth rate falls 
B)  the population growth rate rises 
C)  per capita GDP rises 
D)  per capita GDP falls 
E)  the effects on population or GDP growth cannot be determined from the information

Question 18

To build growth into its economy, a less-developed country must not

Accepted Answer

A)  invest in human capital because the fruits of that investment is long run 
B)  focus on the infrastructure that has been its problem 
C)  shift resources out of the production of consumer goods and into the production of
Capital goods because a healthy worker is a productive worker 
D)  shift resources out of the production of capital goods and into the production of
Consumer goods because they need capital to increase labor productivity 
E)  engage in curbing population because more workers means more output 
A)  invest in human capital because the fruits of that investment is long run 
B)  focus on the infrastructure that has been its problem 
C)  shift resources out of the production of consumer goods and into the production of
Capital goods because a healthy worker is a productive worker 
D)  shift resources out of the production of capital goods and into the production of
Consumer goods because they need capital to increase labor productivity 
E)  engage in curbing population because more workers means more output

Question 19

China's strategy of breaking the vicious circle of poverty focused on

Accepted Answer

A)  transforming itself into a market-based economy 
B)  reducing the resources devoted to infrastructure development 
C)  refusing to trade with foreign countries 
D)  reducing population growth by stringent restrictions on family size 
E)  developing more traditional and labor-using production techniques 
A)  transforming itself into a market-based economy 
B)  reducing the resources devoted to infrastructure development 
C)  refusing to trade with foreign countries 
D)  reducing population growth by stringent restrictions on family size 
E)  developing more traditional and labor-using production techniques

Question 20

The one thing that all less-developed countries have in common over the past 25 years is virtually zero or negative economic growth.

Accepted Answer

A) True 
 B)False

Exam 21: The Economic Problems of Less-Developed Economies

The more modest alternative to the big-push approach, unbalanced development strategy investments, relies on

-In Exhibit GG-2, you can explain Ronilla's superior economic performance by referring to all the following factors (not necessarily shown in the Exhibit) except

A potential drawback to the big-push strategy in LDCs is that

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

A big-push strategy for economic development relies heavily on government-sponsored and financed investments.

Suppose you were told that Botswana had few skilled workers, a primitive banking system, and an inefficient and limited electric power industry. You would know that the person was describing was Botswana's problem with

Everyone working the land knows the usefulness of investing in land irrigation systems but those who work the land may choose not to invest in these profitable irrigation systems as long as

-In Exhibit GG-2, in order for the Magaran production possibilities curve to shift outward to equal the Ronillan curve, the Magarans must

Which of the following is not an obstacle to development for many less-developed countries?

Which continent best illustrates LDCs?

The big-push strategy of development relies mainly on private incentives and a laissez- faire government policy.

Why do some economists prefer government planning and financing of big-push development to private sector development? Because

In LDCs, persistent poverty occurs because of preference for _______ , which results in ___________.

A singular important link between politics and economics in LDCs is that

Many unsuccessful, low performing LDCs have all of the following characteristics except

If a country has a large percentage of its population under 15 years old, then compared with other countries, this creates

If the death rate and the birth rate both fall, then

To build growth into its economy, a less-developed country must not

China's strategy of breaking the vicious circle of poverty focused on

The one thing that all less-developed countries have in common over the past 25 years is virtually zero or negative economic growth.

Introduction

Production Possibilities and Opportunity Costs

Demand and Supply

Elasticity

Happiness, Utility, and Consumer Choice

Price Ceilings and Price Floors

Entrepreneurship and Business Ownership

Costs of Production

Maximizing Profit

Identifying Markets and Market Structures

Price and Output in Monopoly, Monopolistic Competition, and Perfect Competition

Price and Output Determination Under Oligopoly

Antitrust and Regulation

Externalities, Market Failure, and Public Choice

Wage Rates in Competitive Labor Markets

Wages and Employment: Monopsony and Labor Unions

Interest, Rent, and Profit

Income Distribution and Poverty

International Trade

Exchange Rates, Balance of Payments, and International Debt

Filters

In LDCs, persistent poverty occurs because of preference for _ , which results in _____.