Question 1

Export promotion policies try to encourage firms to produce more of products the country has a comparative advantage in.

Accepted Answer

A) True 
 B)False

Question 2

In 2006, per capita income was roughly ________ times lower in low-income countries than in high-income countries.

Accepted Answer

A)  12 
B)  31 
C)  56 
D)  181

Question 3

Income distributions in developing countries are often so skewed that the richest households of very poor nations surpass the living standards of many high-income families in the developed economies.

Accepted Answer

A) True 
 B)False

Question 4

Which agency lends money to countries to help them stabilize their exchange rates?

Accepted Answer

A)  the International Monetary Fund 
B)  the World Bank 
C)  the Federal Reserve 
D)  the Bureau de Change

Question 5

Most authorities agree that the transition to a market economy can be achieved

Accepted Answer

A)  without external financial and technical assistance. 
B)  only with forceful central planning by the government. 
C)  only with external financial and technical assistance. 
D)  only with government controls on wages and prices.

Question 6

Which of the following characteristics is generally representative of developed countries relative to developing countries?

Accepted Answer

A)  a larger percentage of the labor force in rural areas 
B)  a lower infant mortality rate 
C)  lower productivity in the agriculture sector 
D)  a lower rate of literacy

Question 7

Which of the following characteristics is generally representative of developing counties relative to developed countries?

Accepted Answer

A)  a higher level of per-capita GNI 
B)  a larger percentage of the labor force in urban areas 
C)  a lower infant mortality rate 
D)  lower productivity in the agricultural sector

Question 8

Rapid population growth tends to make the population younger in developing economies.

Accepted Answer

A) True 
 B)False

Question 9

The population in developing countries grows at a rate of ________% a year.

Accepted Answer

A)  -0.8 
B)  0.5 
C)  1.7 
D)  8.0

Question 10

Which of the following factors has been suggested as an explanation for the lack of economic growth in many poor nations?

Accepted Answer

A)  insufficient capital formation 
B)  the supply of human resources is too high. 
C)  inadequate level of resources 
D)  a lack of dependence on the already developed nations

Question 11

In the distribution of world income, the richest one-fifth of the world's population earns about ________ of the world income.

Accepted Answer

A)  40% 
B)  65% 
C)  79% 
D)  98%

Question 12

Advocates of a gradualism transition approach from socialism to a market economy recommend

Accepted Answer

A)  moderate changes starting with the development of market institutions, the gradual decontrol of prices, and the privatization of only the cost efficient firms. 
B)  continued government controls over wages forever. 
C)  an immediate and total change in all economic conditions. 
D)  continued government controls over prices forever.

Question 13

The policy in which industrial production is oriented towards foreign consumers is called

Accepted Answer

A)  import substitution. 
B)  export promotion. 
C)  export orientation. 
D)  import promotion.

Question 14

When looking at the world population, the poorest one-fifth of families earns about _________ of total world income.

Accepted Answer

A)  one half of one percent 
B)  three percent 
C)  seven percent 
D)  twelve percent

Question 15

Capital flight refers to the fact that both human and financial capital

Accepted Answer

A)  flow into developing countries to build much needed infrastructure. 
B)  leave developing countries in search of a higher rate of return. 
C)  leave developed countries in search of a higher rate of return. 
D)  flow into developing countries to invest in risk free investments.

Question 16

Although the developed nations account for only about one-quarter of the world's population, they are estimated to consume what proportion of the world's output?

Accepted Answer

A)  one-quarter 
B)  one-half 
C)  two-thirds 
D)  three-quarters

Question 17

Economic growth guarantees economic development.

Accepted Answer

A) True 
 B)False

Question 18

In the distribution of world income, the poorest one-fifth of the world's population earns about ________ of the world income.

Accepted Answer

A)  0.5% 
B)  2% 
C)  5% 
D)  12%

Question 19

Building roads, power generators, and irrigation systems are projects that are referred to as

Accepted Answer

A)  social overhead capital. 
B)  human capital. 
C)  physical capital. 
D)  financial capital.

Question 20

Related to the Economics in Practice on page 722: In the Kerala region of India, fishermen used cell phones to help connect buyers and sellers, reducing waste. All of the following describe ways in which technology is likely to improve information flow and increase economic efficiency EXCEPT:

Accepted Answer

A)  Fax technology makes it possible to transmit signed contracts in seconds, allowing the parties to the contract to begin performing their contract duties more quickly. 
B)  High-speed Internet connections allow engineers in developing countries to collaborate with firms all around the world. 
C)  E-mail now makes criminals who commit certain kinds of fraud very difficult to identify and arrest. 
D)  Video conferencing decreases the need for expensive business travel.

Exam 21: Economic Growth in Developing and Transitional Economies

Export promotion policies try to encourage firms to produce more of products the country has a comparative advantage in.

In 2006, per capita income was roughly ________ times lower in low-income countries than in high-income countries.

Income distributions in developing countries are often so skewed that the richest households of very poor nations surpass the living standards of many high-income families in the developed economies.

Which agency lends money to countries to help them stabilize their exchange rates?

Most authorities agree that the transition to a market economy can be achieved

Which of the following characteristics is generally representative of developed countries relative to developing countries?

Which of the following characteristics is generally representative of developing counties relative to developed countries?

Rapid population growth tends to make the population younger in developing economies.

The population in developing countries grows at a rate of ________% a year.

Which of the following factors has been suggested as an explanation for the lack of economic growth in many poor nations?

In the distribution of world income, the richest one-fifth of the world's population earns about ________ of the world income.

Advocates of a gradualism transition approach from socialism to a market economy recommend

The policy in which industrial production is oriented towards foreign consumers is called

When looking at the world population, the poorest one-fifth of families earns about _________ of total world income.

Capital flight refers to the fact that both human and financial capital

Although the developed nations account for only about one-quarter of the world's population, they are estimated to consume what proportion of the world's output?

Economic growth guarantees economic development.

In the distribution of world income, the poorest one-fifth of the world's population earns about ________ of the world income.

Building roads, power generators, and irrigation systems are projects that are referred to as

Related to the Economics in Practice on page 722: In the Kerala region of India, fishermen used cell phones to help connect buyers and sellers, reducing waste. All of the following describe ways in which technology is likely to improve information flow and increase economic efficiency EXCEPT: