Question 1

In a developing economy,scarcity of capital may have more to do with a lack of incentive for citizens to save and invest productively than with any absolute scarcity of income available for capital accumulation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT a characteristic that is associated with developed countries?

Accepted Answer

A) a high per capita GNI 
B) low infant mortality rates 
C) high life expectancy 
D) an income distribution that is very close to being equal

Question 3

In 2006,the infant mortality rate was ________ per 1,000 births in low-income countries.

Accepted Answer

A) 6.9 
B) 29.9 
C) 39.8 
D) 114

Question 4

An alternative to random experiments is to rely on ________ to mimic the controlled experiment.

Accepted Answer

A) natural experiments 
B) mirror experiments 
C) manipulated experiments 
D) predetermined experiments

Question 5

In 2005,the number of Internet users was ________ per 1,000 people in high-income countries.

Accepted Answer

A) 194 
B) 523 
C) 774 
D) 851

Question 6

Transition from socialism by shock therapy is a gradual process.

Accepted Answer

A) True 
 B)False

Question 7

In 2012,the world population grew to ________ people.

Accepted Answer

A) over 6.9 billion 
B) just under 17 billion 
C) approximately 32 billion 
D) almost 1 trillion

Question 8

A policy in which a government actively picks industries to support as a base for economic development is known as

Accepted Answer

A) social policy. 
B) first-choice policy. 
C) preferential policy. 
D) industrial policy.

Question 9

An economy is not able to develop because of a lack of capital.Which of the following strategies would you suggest this economy pursue?

Accepted Answer

A) lower interest rates 
B) impose quotas on how much capital can be imported from other countries to reduce dependency on foreign capital 
C) increase the political stability of the economy 
D) nationalize private enterprises because the government sector is not motivated by profit maximization

Question 10

A developing economy is considering restricting the amount of money its citizens can invest abroad.What might the purpose of this restriction be?

Accepted Answer

A) to increase the dependency of the economy on developed economics 
B) to increase capital formation by forcing its citizens to invest in their own country 
C) to reduce the nation's trade deficit so that interest rates will be reduced and capital formation will increase 
D) to increase the degree of equality in the income distribution

Question 11

In some nations,the government pays parents to send their children to school.There is ________ that these payments ________ school attendance.

Accepted Answer

A) some evidence;actually decrease 
B) no evidence;increase or decrease 
C) no evidence;increase 
D) some evidence;increase

Question 12

Investment in social overhead capital refers to investment in areas like education and nutrition.

Accepted Answer

A) True 
 B)False

Question 13

The International Monetary Fund (IMF)makes loans to encourage economic development.

Accepted Answer

A) True 
 B)False

Question 14

The so-called tragedy of commons relates to the idea that

Accepted Answer

A) no one has an incentive to maintain collectively owned property. 
B) collectively owned resources tend to be under used. 
C) collective ownership provides the proper private incentives for efficiency because individuals bear the full costs of their own decisions and enjoy the full benefits. 
D) central planning sets all production and distribution targets.

Question 15

A very small percentage of GDP tends to come from the service sectors in poor countries.

Accepted Answer

A) True 
 B)False

Question 16

Related to the Economic in Practice on p.717: Corruption often leads to more efficient firms producing the goods and services in a society.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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

Accepted Answer

A) a higher level of per capita GNI 
B) a shorter life expectancy 
C) a higher rate of infant mortality 
D) a smaller percentage of children enrolled in school

Question 19

The government's role in a developing country is important during the country's development process for all of the following reasons EXCEPT

Accepted Answer

A) building social overhead capital cannot be taken on by the private sector. 
B) building infrastructure is a huge project that only the government can undertake. 
C) many social projects are associated with the free-rider problem,which minimizes the rate of return to the private sector. 
D) the government is the only institution with a vested interest in a country's development.

Question 20

The lack of capital in developing nations causes

Accepted Answer

A) labor productivity to remain low. 
B) the savings rate to be too high. 
C) output to be low in the present but high in the future. 
D) consumption rates to be too high.

Exam 21: Economic Growth in Developing and Transitional Economies

In a developing economy,scarcity of capital may have more to do with a lack of incentive for citizens to save and invest productively than with any absolute scarcity of income available for capital accumulation.

Which of the following is NOT a characteristic that is associated with developed countries?

In 2006,the infant mortality rate was ________ per 1,000 births in low-income countries.

An alternative to random experiments is to rely on ________ to mimic the controlled experiment.

In 2005,the number of Internet users was ________ per 1,000 people in high-income countries.

Transition from socialism by shock therapy is a gradual process.

In 2012,the world population grew to ________ people.

A policy in which a government actively picks industries to support as a base for economic development is known as

An economy is not able to develop because of a lack of capital.Which of the following strategies would you suggest this economy pursue?

A developing economy is considering restricting the amount of money its citizens can invest abroad.What might the purpose of this restriction be?

In some nations,the government pays parents to send their children to school.There is that these payments school attendance.

Investment in social overhead capital refers to investment in areas like education and nutrition.

The International Monetary Fund (IMF)makes loans to encourage economic development.

The so-called tragedy of commons relates to the idea that

A very small percentage of GDP tends to come from the service sectors in poor countries.

Related to the Economic in Practice on p.717: Corruption often leads to more efficient firms producing the goods and services in a society.

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

The government's role in a developing country is important during the country's development process for all of the following reasons EXCEPT

The lack of capital in developing nations causes