Question 1

Which of these sets of countries has the greatest degree of internal corruption as of 2012,according to Transparency International?

Accepted Answer

A)  Somalia,Afghanistan,and Venezuela. 
B)  Finland,Denmark,and New Zealand. 
C)  United States,Greece,and Italy. 
D)  Mexico,China,and India. 
A)  Somalia,Afghanistan,and Venezuela. 
B)  Finland,Denmark,and New Zealand. 
C)  United States,Greece,and Italy. 
D)  Mexico,China,and India.

Question 2

Examples of low-income developing countries are:

Accepted Answer

A)  Switzerland,New Zealand,and Australia. 
B)  Germany,Austria,and Italy. 
C)  Sudan,Bangladesh,and Ethiopia. 
D)  Mexico,South Korea,and Brazil. 
A)  Switzerland,New Zealand,and Australia. 
B)  Germany,Austria,and Italy. 
C)  Sudan,Bangladesh,and Ethiopia. 
D)  Mexico,South Korea,and Brazil.

Question 3

According to the United Nations,approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

Accepted Answer

A)  20 percent. 
B)  30 percent. 
C)  60 percent. 
D)  80 percent. 
A)  20 percent. 
B)  30 percent. 
C)  60 percent. 
D)  80 percent.

Question 4

The low per capita outputs of the DVCs are explained by:

Accepted Answer

A)  insufficient saving and investment. 
B)  overinvestment in human capital. 
C)  slow population growth. 
D)  excessively rapid technological advance. 
A)  insufficient saving and investment. 
B)  overinvestment in human capital. 
C)  slow population growth. 
D)  excessively rapid technological advance.

Question 5

Economic growth in the DVCs might increase if IACs:

Accepted Answer

A)  reduce their tariffs and import quotas. 
B)  encourage more immigration of high-skilled DVC workers. 
C)  outlaw direct private investment abroad by IAC corporations. 
D)  discourage capital flight to the DVCs. 
A)  reduce their tariffs and import quotas. 
B)  encourage more immigration of high-skilled DVC workers. 
C)  outlaw direct private investment abroad by IAC corporations. 
D)  discourage capital flight to the DVCs.

Question 6

The DVCs are:

Accepted Answer

A)  located primarily in Northern Europe. 
B)  located primarily in Western Europe. 
C)  located primarily in Africa,Asia,and Latin America. 
D)  more or less evenly distributed over the various continents. 
A)  located primarily in Northern Europe. 
B)  located primarily in Western Europe. 
C)  located primarily in Africa,Asia,and Latin America. 
D)  more or less evenly distributed over the various continents.

Question 7

State industries are notoriously poor "incubators" for the development of profit-focused,entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of:

Accepted Answer

A)  free immigration and emigration. 
B)  privatizing state industries. 
C)  central planning. 
D)  free trade. 
A)  free immigration and emigration. 
B)  privatizing state industries. 
C)  central planning. 
D)  free trade.

Question 8

The exports of the DVCs consist largely of:

Accepted Answer

A)  high-technology goods. 
B)  raw materials and farm products. 
C)  manufactured goods. 
D)  services and financial capital. 
A)  high-technology goods. 
B)  raw materials and farm products. 
C)  manufactured goods. 
D)  services and financial capital.

Question 9

At the present time,the largest percentage of the national incomes of the low-income DVCs is used for:

Accepted Answer

A)  imports of the finished products of foreign industries. 
B)  food. 
C)  infrastructure. 
D)  industrial development. 
A)  imports of the finished products of foreign industries. 
B)  food. 
C)  infrastructure. 
D)  industrial development.

Question 10

Many countries remain poor because they currently are poor.This statement summarizes the:

Accepted Answer

A)  infrastructure problem. 
B)  vicious circle of poverty. 
C)  demographic transition problem. 
D)  problem of capital flight. 
A)  infrastructure problem. 
B)  vicious circle of poverty. 
C)  demographic transition problem. 
D)  problem of capital flight.

Question 11

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Accepted Answer

A) True 
 B)False

Question 12

If a technological advance expands output and requires a smaller investment in capital goods,this technological advance:

Accepted Answer

A)  is capital-using. 
B)  must involve nonfinancial investment. 
C)  is capital-saving. 
D)  must pertain to the infrastructure. 
A)  is capital-using. 
B)  must involve nonfinancial investment. 
C)  is capital-saving. 
D)  must pertain to the infrastructure.

Question 13

Investment in kind refers to the possibility that:

Accepted Answer

A)  DVCs will invest for the purpose of becoming less dependent on world markets. 
B)  a DVC will overinvest in industries in which it has a comparative advantage,disrupting its development program. 
C)  newly established manufacturing firms may expand by reinvesting their profits. 
D)  surplus labor in,say,agriculture can be diverted to the production of simple capital goods such as earthen dams. 
A)  DVCs will invest for the purpose of becoming less dependent on world markets. 
B)  a DVC will overinvest in industries in which it has a comparative advantage,disrupting its development program. 
C)  newly established manufacturing firms may expand by reinvesting their profits. 
D)  surplus labor in,say,agriculture can be diverted to the production of simple capital goods such as earthen dams.

Question 14

An advantage of direct foreign investment (compared to foreign loans)is that management skill and technological knowledge often accompany such capital flows.

Accepted Answer

A) True 
 B)False

Question 15

Successful foreign aid programs:

Accepted Answer

A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D)  cause a DVC's exchange rate to depreciate. 
A)  enhance a DVC's resources and therefore shift its production possibilities curve to the left. 
B)  enhance a DVC's resources and therefore shift its production possibilities curve to the right. 
C)  move the DVC from a high-investment-low-consumption position to a low-investment-high-consumption position on its stable production possibilities curve. 
D)  cause a DVC's exchange rate to depreciate.

Question 16

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

Accepted Answer

A)  Focus on group contentment rather than individual achievement. 
B)  The belief there is little or no correlation between an individual's economic actions and her or his economic fortunes. 
C)  Direct connections between individual efforts (including educational efforts)and economic rewards. 
D)  Use of the majority of resources for religious structures and ceremonies. 
A)  Focus on group contentment rather than individual achievement. 
B)  The belief there is little or no correlation between an individual's economic actions and her or his economic fortunes. 
C)  Direct connections between individual efforts (including educational efforts)and economic rewards. 
D)  Use of the majority of resources for religious structures and ceremonies.

Question 17

Suppose that Alpha's real output rose from $400 billion in year 1 to $428 billion in year 2.Its growth rate for this period was:

Accepted Answer

A)  14 percent. 
B)  12 percent. 
C)  9 percent. 
D)  7 percent. 
A)  14 percent. 
B)  12 percent. 
C)  9 percent. 
D)  7 percent.

Question 18

Capital flight refers to:

Accepted Answer

A)  the tendency of large corporations of IACs to build new plants in the DVCs because labor is cheaper. 
B)  DVC citizens accumulating or investing their savings in the IACs. 
C)  the high international mobility of speculative funds caused by variations in exchange rates. 
D)  the tendency of DVCs to overinvest in commercial aircraft. 
A)  the tendency of large corporations of IACs to build new plants in the DVCs because labor is cheaper. 
B)  DVC citizens accumulating or investing their savings in the IACs. 
C)  the high international mobility of speculative funds caused by variations in exchange rates. 
D)  the tendency of DVCs to overinvest in commercial aircraft.

Question 19

Per capita incomes must first grow for birth rates to decline.This statement describes the:

Accepted Answer

A)  human capital view of population growth. 
B)  traditional view of population growth. 
C)  capricious universe view. 
D)  demographic transition view of population growth. 
A)  human capital view of population growth. 
B)  traditional view of population growth. 
C)  capricious universe view. 
D)  demographic transition view of population growth.

Question 20

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

A) True 
 B)False

Exam 41: The Economics of Developing Countries

Which of these sets of countries has the greatest degree of internal corruption as of 2012,according to Transparency International?

Examples of low-income developing countries are:

According to the United Nations,approximately what percentage of the world's income is received by the richest one-fifth of the world's population?

The low per capita outputs of the DVCs are explained by:

Economic growth in the DVCs might increase if IACs:

The DVCs are:

State industries are notoriously poor "incubators" for the development of profit-focused,entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of:

The exports of the DVCs consist largely of:

At the present time,the largest percentage of the national incomes of the low-income DVCs is used for:

Many countries remain poor because they currently are poor.This statement summarizes the:

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

If a technological advance expands output and requires a smaller investment in capital goods,this technological advance:

Investment in kind refers to the possibility that:

An advantage of direct foreign investment (compared to foreign loans)is that management skill and technological knowledge often accompany such capital flows.

Successful foreign aid programs:

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

Suppose that Alpha's real output rose from $400 billion in year 1 to $428 billion in year 2.Its growth rate for this period was:

Capital flight refers to:

Per capita incomes must first grow for birth rates to decline.This statement describes the:

Most of the DVCs of the world are located in Western Europe.

Income Inequality Poverty and Discrimination

Health Care

Immigration

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

The Balance of Payments, Exchange Rates, and Trade Deficits

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

The United States and the Global Economy

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