Deck 18: Economic Development

Question 1

Which of the following is a trend in developing countries?  

A) The birth rate during a typical woman's lifetime has increased from three children to six children. 
B) Attitudes toward family size are changing. 
C) When women have employment opportunities outside the home, fertility rates increase. 
D) As women become better educated, they earn less money.

Answer 1

 Attitudes toward family size are changing. 

Question 2

Compared to industrial market countries, what do developing countries usually have?  

A) exports consisting mostly of agricultural products and raw materials 
B) slow population growth 
C) low unemployment 
D) higher rates of literacy

Answer 2

 exports consisting mostly of agricultural products and raw materials 

Question 3

Which of the following is NOT a cause of higher birth rates in developing countries?  

A) when children in the developing country are viewed as a source of farm labour 
B) when children in the developing country are viewed as economic and social security as the parents age 
C) when the developing country has higher child mortality rates that engender higher birth rates 
D) when people in the developing country have greater knowledge of contraception

Answer 3

 when people in the developing country have greater knowledge of contraception

Question 4

What does labour productivity depend on?  

A) the stability of the government 
B) the size of the economy 
C) the proportion of the labour force that is unionized 
D) the amount of capital

Question 5

Eddie is a skilled worker employed in a low-skill job.Which of the following terms can be used to describe him?  

A) underemployed 
B) unemployed 
C) overemployed 
D) fully employed

Question 6

In order to raise its productivity, in which of the following should the country of Yipi invest more?  

A) in human capital and in physical capital 
B) in human capital only 
C) in physical capital only 
D) in stable foreign economies

Question 7

Which of the following groups has the highest infant mortality rate?  

A) middle-income economies 
B) low-income economies 
C) high-income economies 
D) Western European economies

Question 8

Which of the following types of economies has the lowest malnutrition rate among children less than 5 years of age?  

A) middle-income economies 
B) low-income economies 
C) high-income economies 
D) sub-Saharan African economies

Question 9

In which of the following types of economies do individuals have the lowest life expectancy at birth?  

A) in middle-income economies 
B) in low-income economies 
C) in high-income economies 
D) in sub-Saharan African economies

Question 10

Which of the following is the most likely characterization of a woman's level of education in sub-Saharan African countries?  

A) Women in the sub-Sahara are less educated than most men. 
B) Women in the sub-Sahara are more likely to graduate from secondary school. 
C) Women in the sub-Sahara are more literate than men. 
D) Women are a majority population in post-secondary institutions in the sub-Sahara.

Question 11

What does labour productivity depend on?  

A) the quality of the labour 
B) unstable government 
C) the proportion of the labour force that is unionized 
D) the size of the economy

Question 12

Which of the following does NOT describe the World Bank?  

A) It is an economic development institution. 
B) It is affiliated with the United Nations. 
C) It offers low-fee chequing accounts to anyone in the world. 
D) It uses output per capital figures to classify economies.

Question 13

Which of the following is most unlikely to be an industrial market?  

A) Western Europe 
B) North American 
C) Australia 
D) sub-Saharan African economies

Question 14

What is one likely reason that a sub-Saharan country is poor?  

A) It does NOT produce many goods and services. 
B) It has a high literacy rate. 
C) It has a low birth rate. 
D) It has a low infant mortality rate.

Question 15

How are industrial market countries also described?  

A) as developing countries 
B) as low-income economies 
C) as middle-income economies 
D) as high-income economies

Question 16

What is the yardstick most often used to compare living standards across nations?  

A) average production cost per unit 
B) sales revenue per month 
C) output per capita 
D) imports per year

Question 17

What was the level of illiteracy among individuals 15 years and older in low-income countries in 2008?  

A) 2 percent 
B) 17 percent 
C) 34 percent 
D) 50 percent

Question 18

The World Bank sorts countries into three major groups.What are the three groups?  

A) high-income economies, middle-income economies, low-spending economies 
B) high-spending economies, middle-spending economies, low-spending economies 
C) high-income economies, middle-income economies, zero-income economies 
D) high-income economies, middle-income economies, low-income economies

Question 19

In developing nations, what is the combined rate of urban and rural unemployment or underemployment?  

A) about 1 percent 
B) about 10 percent 
C) about 20 percent 
D) about 30 percent

Question 20

Which of the following describes what is included in Canada's gross national income (GNI)?  

A) It measures the market value of all final goods and services produced by Canadians anywhere in the world over a 1-year period. 
B) It excludes profits earned by Bombardier Inc. in India. 
C) It measures the market value of all final goods and services produced in Canada's economy by resources supplied by Canada's residents and firms, regardless of the location of the resource, over a 1-year period. 
D) It excludes earnings earned by expatriate workers.

Question 21

Which of the following best describes social capital?  

A) the shared values and trust that promote cooperation in the economy 
B) the buildings and equipment used to produce goods and services 
C) a government regulation aimed at improving health and safety 
D) the accumulated knowledge, skill, and experience of the labour force

Question 22

On average, what group of countries would be most likely to have a high number of telephone lines per 1,000 people?  

A) low-income countries 
B) middle-income countries 
C) high-income countries 
D) developing countries

Question 23

Which of the following is an example of a poverty trap?  

A) extended time periods without war 
B) a lack of mineral wealth 
C) a dysfunctional or corrupt government 
D) laws and regulations that help detect fiscal fraud

Question 24

What is the major advantage of a market economy?  

A) It maximizes the need for resource-flow data. 
B) Prices convey most of the information necessary to coordinate economic activity among firms. 
C) Data are aimed at central planners. 
D) Prices are essentially meaningless.

Question 25

Which of the following resources is necessary to efficiently combine the other resources in order to produce goods and services?  

A) natural resources 
B) capital 
C) labour 
D) entrepreneurial ability

Question 26

Which of the following is the worst possible economic strategy to help promote economic growth?  

A) poorly defined property rights 
B) less social capital 
C) civil war 
D) privatization

Question 27

Which of the following is a requirement for development?  

A) an unreliable system of financial institutions 
B) a lack of saving by households and firms 
C) low confidence in domestic currency 
D) low and predictable inflation that encourages saving

Question 28

What is the value added per farm worker in Canada compared to the value added per farm worker in low-income and middle-income countries?  

A) five times greater in Canada 
B) ten times greater in Canada 
C) seventy-five times greater in Canada 
D) 500 times greater in Canada

Question 29

What comprises the bulk of exports from industrial countries?  

A) manufactured goods 
B) primary products 
C) agricultural goods 
D) raw materials

Question 30

What must developing countries have in order to pay for imports?  

A) foreign aid 
B) private investment 
C) public investment 
D) foreign exchange

Question 31

Which of the following infrastructures is NOT one that production and exchange would depend on?  

A) a reliable infrastructure of tariffs 
B) a reliable infrastructure of communication 
C) a reliable infrastructure of sanitation 
D) a reliable infrastructure of electricity

Question 32

Which of the following is NOT a developing country classified as a high-income economy because of possessing huge oil reserves?  

A) United Arab Emirates 
B) Chad 
C) Qatar 
D) Kuwait

Question 33

Which of the following is NOT an example of rules of the game?  

A) formal procedures for behaviour 
B) government takeover of private corporations 
C) traditions 
D) informal constraints on behaviour

Question 34

How are laws, customs, conventions, and other institutional elements that sustain an economy categorized?  

A) as rules of the game 
B) as human capital 
C) as natural resources 
D) as financial institutions

Question 35

Which of the following best describes a reason why a country may be trapped in poverty?  

A) The country lacks mineral wealth. 
B) The country has an honest and functional government. 
C) The country has laws and regulations to help detect fiscal fraud. 
D) The country has experienced a civil war.

Question 36

Sjen Mavago, the economics minister of the country of X-Marks-the-Spot, has concluded that entrepreneurs are unable to generate the kind of growth the country needs.Which of the following may have motivated her decision to create state enterprises?  

A) the desire to limit government's role in the economy 
B) the desire to provide jobs for friends and relatives of government officials 
C) the desire to take risks 
D) the desire to encourage a free market

Question 37

Which of the following is a good example of privatization?  

A) nationalizing privately owned oil fields 
B) having price floors on products 
C) turning government enterprises into private enterprises 
D) increasing payroll taxes

Question 38

How many countries in the world have failed to come up with the rules of the game that lead to sustained economic growth?  

A) none 
B) one 
C) half 
D) most

Question 39

Which of the following transitional economies has become a middle-income nation?  

A) Bangladesh 
B) Ethiopia 
C) China 
D) Democratic Republic of Congo

Question 40

What is privatization?  

A) the process of turning private enterprises into public enterprises 
B) the process of turning sole proprietor enterprises into corporate enterprises 
C) the process of turning public enterprises into private enterprises 
D) the process of turning state-owned enterprises into public enterprises

Question 41

What percentage of GDP is comprised of official Canadian government foreign aid?  

A) about 0.3 percent 
B) about 0.7 percent 
C) about 1.0 percent 
D) about 5 percent

Question 42

What is the term for any international transfer made on concessional terms for the purposes of promoting economic development?  

A) foreign aid 
B) remittances 
C) immigration 
D) private investment

Question 43

Which forms can foreign aid take?  

A) only money, capital goods, and technical assistance 
B) only capital goods, technical assistance, and food 
C) money, capital goods, technical assistance, and food 
D) only money, technical assistance, and food

Question 44

What comprises the bulk of exports from non-industrial countries?  

A) manufactured goods 
B) primary products 
C) services 
D) natural resources

Question 45

Which of the following does NOT characterize migration patterns?  

A) Migration plays an important role in the economies of developing countries. 
B) A major source of foreign exchange in some countries is the money sent home by migrants. 
C) Migration provides a valuable safety valve for poor countries. 
D) The best and brightest professionals are very unlikely to migrate to developed countries.

Question 46

Which term refers to assistance provided by organizations that use funds from a number of countries?  

A) unilateral 
B) bilateral 
C) trilateral 
D) multilateral

Question 47

Which of the following is the most important factor affecting development?  

A) natural resources 
B) size of country 
C) government size 
D) education

Question 48

Which of the following is NOT an example of foreign aid?  

A) when Canadian discount department stores purchase toys from Chinese manufacturers 
B) when the International Monetary Fund extends loans to countries that are having trouble with their balance of payments 
C) when the World Bank provides loans and grants to support health and education programs 
D) when the Canadian government pays to build an electricity plant in Albania

Question 49

Suppose the country of Deficitland is experiencing trade deficits.Which of the following imports is Deficitland more likely to cut?  

A) beef 
B) cocoa 
C) coffee 
D) capital goods

Question 50

In developing countries, why do the prices of primary products fluctuate more widely than do the prices of finished goods?  

A) because crop supply changes very little despite the weather 
B) because crop supply fluctuates with the weather 
C) because crop demand fluctuates with the weather 
D) because crops go in and out of fashion as new diets are developed

Question 51

A World Bank study of economics in Africa suggests a strong link exists between governments that cater to special-interest groups and a particular rate of economic growth.What is the rate of growth involved in the link identified in the World Bank study?  

A) high 
B) moderate 
C) low 
D) average

Question 52

Consider the movement up a production chain in a typical economy.What is at the end of this production chain?  

A) raw material 
B) agriculture 
C) manufacturing 
D) services

Question 53

Which of the following is a reason why import substitution is popular?  

A) There was never any demand for the products in question. 
B) Infant industries would have to compete against global rivals. 
C) It benefits suppliers to the favoured domestic industries. 
D) It slows down the progression through the production chain.

Question 54

Which of the following is a positive effect of foreign aid?  

A) Developing countries have increased their ability to become self-supporting at higher standards of living. 
B) Many recipient countries are doing less of what they had done well. 
C) The agricultural sectors of recipient countries have suffered. 
D) Government officials have been insulated from their own incompetence.

Question 55

Which of the following creates an obstacle to pursuing freer international trade?  

A) when consumers do NOT recognize their potential gains 
B) when losses are widespread 
C) when domestic producers do NOT recognize their potential losses 
D) when government has plenty of political will and support to remove trade barriers

Question 56

How can the country of Includia encourage foreign investment?  

A) by requiring foreign investors to find a local partner who must be granted controlling interest 
B) by setting different exchange rates for different categories of transactions 
C) by restricting private international borrowing and lending 
D) by reducing foreign investment barriers

Question 57

The government of the country of Upsilon is disappointed with having to handle problems caused by being a recipient of foreign aid from donor governments.Regarding foreign aid, what should Upsilon consider doing in future?  

A) refusing all future offers of aid 
B) privatizing aid, such as receiving funds from private not-for-profit agencies 
C) becoming a donor instead 
D) seeking even more government-sponsored aid