Deck 10: Development: Causes of the Wealth and Poverty of Nations

Question 1

What is an "encompassing coalition" in regard to overcoming collective action problems?

A)When less developed countries are surrounded by developing countries
B)An alliance consisting of enough domestic groups that it pursues broad social welfare
C)An alliance of foreign investors who can force less developed countries to make economic concessions
D)A union of less developed countries that can force developed countries to implement fairer trade policies

Answer 1

B

Question 2

What has happened to the proportion of the world's population living in abject poverty?

A)The proportion of the world's population living in abject poverty has declined since the 1980s.
B)Economic growth has increased so much that almost none of the world's population lives in abject poverty.
C)The proportion of the world's population living in abject poverty has increased slightly.
D)The proportion of the world's population living in abject poverty has stayed the same.

Answer 2

A

Question 3

How does democracy affect the likelihood that necessary public goods will be provided?

A)More representative institutions are likely to give more weight to public concerns about overall economic growth.
B)Having elections makes democratic governments more susceptible to the influence of special interest groups who resist economic reforms.
C)Since citizens oppose tax increases,democracies are often unable to raise the revenue necessary for providing public goods.
D)Citizens in democracies are more likely to organize and provide public goods themselves.

Answer 3

A

Question 4

Which of the following statements does NOT accurately describe sub-Saharan Africa?

A)In sub-Saharan Africa,nearly one-third of children under 5 years old are malnourished.
B)In sub-Saharan Africa,just over one-third of children who are of secondary school age attend school.
C)Barely one-third of the population of sub-Saharan Africa has access to clean water.
D)The population of independent sub-Saharan African countries has always been poorer than those of South Korea and Taiwan.

Question 5

Why is Zambia an example of failed potential for economic development?

A)Although Zambia experienced substantial economic development after independence,its economic growth did not keep pace with that of countries like South Korea.
B)Although Zambia had substantial natural resources and a respected national leader,its economy worsened instead of improved after independence.
C)Although Zambia's economy grew steadily,much higher economic growth was expected because of the country's substantial natural resources.
D)Zambia's economy worsened after independence because of severe ethnic conflict.

Question 6

The majority of the world's population lives in:

A)wealthy countries.
B)moderately wealthy countries.
C)poor countries.
D)countries that are located in Africa and South America.

Question 7

In what way did early economic activities in North America lead to the establishment of democratic political institutions?

A)Early economic activities created many inequalities,leading to the growth of democratic institutions.
B)Early economic activities involved plantation agriculture and labor-intensive mining,which created a few very wealthy landowners with an interest in democracy.
C)Early economic activities involved small-scale farming,which created fewer inequalities in society and the development of more representative democratic institutions.
D)Early economic activities played little role in the development of democratic institutions in North America.

Question 8

Which of the following countries would have the best geographical factors for economic development?

A)A country with no coastline
B)A country in a tropical region
C)A country in a temperate climatic region
D)A country where malaria is present

Question 9

For any given person in the world,which of the following regions are they least likely to live in?

A)Western Europe
B)Africa
C)South America
D)South Asia

Question 10

Why are secure property rights important for economic development?

A)Governments need to be able to make use of public lands for infrastructure projects.
B)Countries that are insecure and subject to invasions from neighboring countries are less likely to have the necessary economic and political environment for development.
C)When property owners think their assets are secure,they are more likely to invest in improvements to their land.
D)Countries cannot develop economically without a clearly written democratic constitution.

Question 11

We refer to countries that have relatively low levels of economic development as:

A)marginal countries.
B)less developed countries.
C)import-subsidizing countries.
D)export-oriented countries.

Question 12

Which of the following is NOT an example of physical infrastructure?

A)Businesses
B)Roads
C)Schools
D)Railroads

Question 13

What was one of the primary differences between North and South America that helped determine the difference in development?

A)North America was colonized by mostly European nations,while South America was not.
B)South America was more prone to democratic institutions that make decisions about development more difficult.
C)The countries that colonized North America were generally militarily more powerful than those that colonized South America.
D)The political institutions in North America tended to be more democratic than those
In South America.

Question 14

Which of the following best describes the development prospects of Zambia and South Korea in 1964?

A)Zambia's prospects for development were promising as Zambia was rich in copper and had a popular newly elected president,while South Korea's prospects for development were weak.
B)South Korea's prospects for development were strong as South Korea was experiencing an industrial revolution,supported by a democratically elected government,while Zambia's prospects for development were weak.
C)Both Zambia and South Korea faced weak prospects for development,as neither country possessed natural resources.
D)Both Zambia and South Korea faced strong prospects for development,as both countries possessed natural resources.

Question 15

What might have helped economic development in South Korea and Taiwan?

A)Both countries had significant natural resources.
B)Both countries had democratic governments.
C)Competition with North Korea and China helped create national unity.
D)Both countries carefully followed import-substituting industrialization policies.

Question 16

Why is geography alone insufficient for explaining why some countries remain poor?

A)There is substantial variation in development among countries within the same region.
B)Geography only has a negative effect on economic development for colonies; it has no effect once colonies become independent.
C)In general,geography does not have an effect on economic development.
D)Geography has little effect on economic growth because states are most likely to send aid to geographically disadvantaged countries.

Question 17

Which of the following is a good example of a less developed country?

A)Denmark
B)Canada
C)Angola
D)South Korea

Question 18

Why did African countries have policies that benefited the urban elite?

A)The urban elite were a politically important source of support for African governments.
B)International organizations forced them to implement these policies.
C)Most of the population of Africa lived in urban areas.
D)The traditionally conservative rural elite continually blocked attempted economic reforms.

Question 19

Which of the following best represents a government effort to provide social infrastructure as a public good in order to encourage development?

A)Argentina constructs an important port on its eastern coast.
B)Kenya develops an initiative to support free secondary education for all.
C)The Central African Republic establishes a central bank to ensure financial and monetary stability.
D)India builds several roads and bridges to connect rural and urban areas of the country.

Question 20

Which of the following best describes an environment where the government has an interest in pursuing policies that impede economic growth?

A)Workers are advocating for the expansion of education across the country.
B)Owners of labor-intensive plantations and mines are lobbying against urbanization and industrialization.
C)Poor farmers are lobbying for better protection of their property rights.
D)Skilled workers are lobbying for foreign aid to enhance the technical capacity of production.

Question 21

Why do most industrialized countries subsidize and protect their farmers?

A)Farmers are a politically important domestic interest group.
B)More developed countries want to hurt the economies of less developed countries.
C)Economic theory supports the idea that food should be protected.
D)The countries need lower-priced food to sustain industrialization.

Question 22

Which of the following best explains the "resource curse"?

A)Natural resources encourage civil conflict,which hinders economic development.
B)Countries with natural resources have few reasons to encourage productive activities outside those associated with the resource.
C)Countries with natural resource are more likely to adopt democratic institutions.
D)Natural resources provide revenue for the government to provide important social services.

Question 23

Which of these cases is an example of worsening terms of trade for a less developed country?

A)El Salvador signs a free-trade agreement with the United States that allows the United States to keep some tariffs on Salvadoran goods.
B)A group of foreign investors removes its money from Kenya because the government does not grant the group special concessions.
C)The price of Chilean copper decreases while the price of Japanese cars increases.
D)The amount of oil Nigeria can export decreases while the number of imported cars increases.

Question 24

We refer to a situation in which a few large firms can effectively control their industry as a(n):

A)monopoly.
B)primary product.
C)favorable term of trade.
D)oligopoly.

Question 25

How are less developed countries harmed by the protectionist policies of developed countries,such as subsidies for farmers?

A)Less developed countries have to pay more for agricultural goods.
B)Less developed countries are unable to import cheaper agricultural products from developed countries.
C)Less developed countries are unable to sell their cheaper products on developed country markets.
D)Developed countries are less likely to purchase agricultural goods from less developed countries because they are more expensive.

Question 26

According to Argentine economist Raúl Prebisch,________ countries are likely to benefit from the long-term trajectory of the terms of trade in the international economy.

A)militarily powerful
B)less developed
C)developed
D)democratic

Question 27

Which of the following is not a way that international economic institutions are biased against poor countries?

A)The World Trade Organization does not address rich countries' protectionist agricultural policies.
B)Rich countries can use the International Monetary Fund to reward the countries that are their allies.
C)The United States and the European Union can veto International Monetary Fund proposals.
D)Many poor countries are not allowed to join the International Monetary Fund.

Question 28

What is the Group of 77?

A)A coalition of democratic states lobbying for democratization as a necessary step toward development
B)A coalition of developed and developing countries in the United Nations with a common goal in global development
C)A coalition of developed countries in the United Nations seeking to advance developed country interests globally
D)A coalition of less developed countries using the power of numbers to push for economic reform

Question 29

Which of the following is an example of detrimental colonial policies?

A)Building roads to transport natural resources out of inland areas
B)Building ports where colonial powers could dock their naval vessels
C)Creating schools where students learned English or French
D)Colonial powers allowing their colonies to trade only with the colonizing country

Question 30

Why do rich countries sometimes promote policies that hurt less developed countries?

A)Rich countries want to keep poor countries poor so they have cheap sources of food imports.
B)Rich countries do not know that their policies hurt poor countries.
C)Rich countries want to keep poor countries poor so that they will never become military threats.
D)Rich countries often protect the interests of powerful domestic groups at the expense of poor countries.

Question 31

Which of the following best describes the impact of European settlers on economic growth in former colonies?

A)Europeans settled in colonies where they could live easily,and they set up institutions that were conducive to economic growth.
B)By settling in colonies,Europeans were able to engage in predation and extract resources,without setting up institutions conducive to economic growth.
C)European settlement created resentment and political unrest in colonies,hindering economic growth.
D)European settlement discouraged colonial governments from setting up institutions necessary for economic growth.

Question 32

Which of the following is an example of an oligopoly?

A)Oil producers restrict global oil supply in order to prop up the price of oil.
B)The automobile industry in the 1970s was dominated by four or five large firms.
C)Taiwan spurs exports to developed countries by subsidizing certain popular industries.
D)Mexico attempts to become self-sufficient by erecting trade barriers and developing domestic industry.

Question 33

Why did colonialism hamper the development of less developed countries?

A)Colonialism actually helped poor regions develop more than it hindered them.
B)Many European colonial powers became too poor to properly provide for their colonies.
C)The colonized populations did not understand how to implement policies that would help their economic growth,and the Europeans refused to help.
D)Colonial powers acted in their own interests,even when this conflicted with the interests of their colonies.

Question 34

Countries in which people live on less than $1,000 a year are generally concentrated in what region of the world?

A)North Asia
B)South America
C)Sub-Saharan Africa
D)Eastern Europe

Question 35

In what ways did colonialism lead to greater economic growth?

A)Some colonies built infrastructure that later contributed to colonial economic development.
B)Colonies traded only with the colonial power,creating an important trading partnership.
C)The colonial powers sent special elite administrators to their colonies.
D)The citizens of the colonial power had special economic privileges.

Question 36

Why did Argentine economist Raúl Prebisch think trade worked against the interests of less developed countries (LDCs)?

A)His research found that the experience of colonialism permanently damaged the chances of industrialization for LDCs.
B)His research found that international organizations were deliberately creating trade agreements that hurt LDCs' interests.
C)His research found that,over time,the price of LDCs' manufactured goods decreased relative to the price of developed countries' goods.
D)His research found that,over time,the price of LDCs' primary exports decreased relative to the price of developed countries' manufactured exports.

Question 37

All of the following are primary goods EXCEPT:

A)coffee.
B)automobiles.
C)copper.
D)oil.

Question 38

Why are lower settler mortality rates in former colonies associated with higher levels of economic development today?

A)Where climate allowed colonial settlers to survive,settlers set up social,political,and economic institutions conducive to economic growth.
B)Former colonies with tropical climates attracted European settlers,who were able to help treat tropical diseases,increasing the productive capacity of the colony.
C)More Europeans moved to colonies with temperate climates,where they could more easily survive,allowing settlers to more easily extract resources from the colony.
D)Former colonies where European settlers were most likely to die from diseases are the countries that now have the highest rates of economic growth.

Question 39

Which of the following represents a situation where there exists conflict between rich and poor countries' interests?

A)Citicorp makes several large loans to Turkey during a currency crisis.
B)International copper companies use cutting-edge technology to build mines in Chile.
C)El Salvador signs a free-trade agreement with the United States.
D)Ford does not increase worker training in Argentina because wages will increase.

Question 40

Which of the following is an example of the impact of the "resource curse" on economic development?

A)Botswana's diamond wealth provided the government with important revenue to focus on the provision of public goods,like economic infrastructure.
B)Zambia's copper wealth gave the government little incentive to focus on the productive capacity of the populace,including improving education and public health.
C)Revenue from petroleum exports in Kuwait has spurred international conflict.
D)Democratic institutions in Namibia encouraged the equitable distribution of diamond revenues in society.

Question 41

What is import-substituting industrialization (ISI)?

A)A policy of importing goods that are necessary for promoting industrialization
B)A policy of promoting industrialization to replace foreign goods with domestically produced goods
C)A policy of encouraging free trade as a means of industrializing quickly
D)A government policy of obtaining foreign technology as a means of encouraging industrialization

Question 42

What is the Washington Consensus?

A)A set of policies advocated by developed countries that are intended to help less developed countries grow their economies
B)A policy by the United States that allows for infant industry protection by emerging economies
C)An international movement to encourage democratization in less developed countries,
As democracy is a fundamental stepping stone to development
D)An international agreement by developed countries not to import goods from countries that have poor working conditions

Question 43

Which of the following would be consistent with the demands of the New International Economic Order?

A)Reducing U.S.tariffs on European automobiles
B)Allowing Zambia to join the United Nations
C)Reducing tariffs on Brazilian soybean exports to Europe
D)Improving the security of foreign direct investment in Botswana

Question 44

What was the purpose of the New International Economic Order?

A)European countries wanted to reduce the power of the United States.
B)Less developed countries wanted to make conditions more favorable for poor countries.
C)The United States wanted to reduce the amount of foreign aid it gave to poor countries.
D)Middle Eastern countries wanted to earn more profit from their oil exports.

Question 45

Which of the following would be a policy consistent with ISI?

A)Ghana attempts to reduce its dependence on imported oil by developing alternative energy sources.
B)Malaysia reduces regulations on its banks to encourage investment.
C)China keeps its currency undervalued to make Chinese exports cheaper.
D)Brazil places tariffs on cars made in the United States.

Question 46

Which of the following is consistent with the Washington Consensus?

A)Lowering tariffs
B)Increasing restrictions on foreign investment
C)Increasing government spending on infrastructure
D)Decreasing inflation

Question 47

Which of the following is NOT a reason that the Organization of the Petroleum Exporting Countries was more successful at affecting the price of oil than other commodity cartels?

A)There are a small number of countries with significant oil reserves.
B)Many oil-producing countries have cultural ties to one another.
C)Members were able to strictly enforce compliance with the organization's policies.
D)There are few alternative sources of energy to substitute for oil.

Question 48

Which of the following would be a desired result of ISI?

A)Zambia reduced its dependence on imported oil.
B)Argentina quadrupled the number of cattle raised for export to rich countries.
C)India became mostly self-sufficient in manufacturing the products it needed.
D)Unemployed urban workers in Ghana moved to rural areas to take advantage of the coffee boom.

Question 49

Which of the following represents a criticism of the turn toward globalization in the 1980s and 1990s?

A)There were a series of financial and currency crises in the 1990s that were exacerbated by the integration of the world market.
B)Globalization led to greater economic growth in developing countries,but at the expense of economic growth in developed countries.
C)Globalization has produced a politically powerful middle class in many developing countries.
D)Less developed countries have faced economic stagnation as a result of globalization.

Question 50

What powerful interests supported ISI in developing countries?

A)Producers of primary products,like plantation owners,supported ISI because developed countries were no longer interested in their products.
B)Former colonies faced significant pressure from colonial powers to pursue ISI.
C)When foreign markets collapsed,pro-industrial groups,like urban business and the middle class,gained influence and supported ISI.
D)The rural poor supported ISI because it provided opportunities to gain employment in urban manufacturing.

Question 51

Which of the following countries adopted export-oriented industrialization policies?

A)Mexico
B)Zambia
C)Singapore
D)Philippines

Question 52

Which of the following policies is consistent with export-oriented industrialization?

A)A Korean car company purchasing its computers from a U.S.firm
B)Mexico keeping tariffs on cars imported from the United States
C)Taiwan keeping its currency weak or undervalued
D)The Brazilian government creating and owning a power company to provide electricity for domestic industries

Question 53

What explains why developing countries abandoned ISI?

A)Other countries saw how fast Latin American countries had grown by encouraging exports and decided to adopt the same policies.
B)The "Asian Tigers" were devastated by the debt crisis and had to make significant reforms to recover.
C)The International Monetary Fund convinced indebted countries that the Washington Consensus had been wrong to advocate ISI policies.
D)International institutions,like the International Monetary Fund,pressured indebted countries to reduce trade protection and to privatize government enterprises.

Question 54

Which of the following does not represent a problem with ISI policies?

A)Manufacturers often lacked technical expertise and produced products of low quality.
B)Developing countries sold little on the international market,which limited the potential of many producers.
C)ISI limited the ability of developing countries to buy much from abroad,and this left developing countries vulnerable to crises.
D)ISI forced national manufacturers to meet international standards of quality and price that were too demanding.

Question 55

What is the global target for development aid from developed countries?

A)1 percent of GDP
B)0.5 percent of GDP
C)0.7 percent of GDP
D)7 percent of GDP

Question 56

Which of the following explains why the developed world became relatively uninterested in developing regions after 1914?

A)Two world wars and the Great Depression kept developed countries preoccupied at home.
B)Developed countries were threatened by the economic growth of developing countries.
C)Developing countries began to trade exclusively with other developing countries after 1914.
D)The developing world began jointly raising the prices of primary goods,which became too expensive for the developed world.

Question 57

Export-oriented industrialization is a policy of:

A)encouraging the consumption of high-tech foreign exports to fuel domestic industrialization.
B)promoting economic development by encouraging manufacturing for foreign consumption.
C)encouraging economic development by promoting foreign direct investment.
D)encouraging developed countries to reduce tariff barriers on developing countries' exports.

Question 58

How did the economic policies of poor countries change after 1914?

A)Poor countries changed from principally exporting primary products to encouraging industrialization.
B)Poor countries reduced previously high levels of trade protection and encouraged imports.
C)Poor countries began borrowing more money from international investors.
D)Poor countries reduced the level of government involvement in their economies in order to spur innovation.

Question 59

Which of the following countries pursued policies consistent with ISI?

A)The United States
B)Portugal
C)South Korea
D)Brazil

Question 60

How likely is it that foreign aid will solve the problems of development for poor countries?

A)Foreign aid is unlikely to solve poor countries' problems,since poor countries have been rejecting foreign donations.
B)It is unlikely that foreign aid will solve development problems,because rich countries have ended most of their foreign aid programs.
C)Foreign aid is likely to help spur economic growth,since the United States and Europe are significantly increasing the amount of donations to poor countries.
D)Foreign aid is unlikely to alleviate development problems,because much aid is misused by recipient governments.

Question 61

What did development prospects look like in Zambia and South Korea in 1964? What explains the divergence in their development stories?

Question 62

Why did governments in less developed countries implement policies that benefited the urban elite,even when these policies hurt the agricultural sector?

Question 63

Describe export-oriented industrialization (EOI)and explain the effect of EOI policies.

Question 64

Explain Raúl Prebisch's theory about the terms of trade for less developed countries and their effect on the development policies implemented by poor countries.

Question 65

How do developed country policies harm developing countries?

Question 66

In what ways did the form of colonialism have a long-term impact on economic development in former colonies?

Question 67

Is increased aid from developed countries likely to change the current state of the international system in regard to lesser developed countries? Why or why not?

Question 68

In what ways are international institutions biased against LDCs?

Question 69

How has geography affected the economic development of poor countries?

Question 70

Explain what international and domestic factors contributed to countries' abandonment of ISI.

Question 71

Why are governments sometimes unable or unwilling to implement policies that create favorable conditions for economic growth?

Question 72

Why did less developed countries adopt import-substituting industrialization (ISI)? What problems developed because of ISI policies?

Question 73

Why were Organization of the Petroleum Exporting Countries (OPEC)members more successful at creating international change than the wider group of less developed countries?

Question 74

How and why have the economic effects of colonization differed between North America and Latin America?

Question 75

What are some ways governments can encourage economic growth?