Question 1

Which of the following countries had the highest per capita income (on a purchasing power parity basis)  in 2017?

Accepted Answer

A)   China
B)   United States
C)   Japan
D)   BrazilE) A) and B)
F) A) and C)

Question 2

The industrially advanced countries (IACs)  had an average per capita income in 2017 of around

Accepted Answer

A)   $82,000 per person.
B)   $27,000 per person.
C)   $40,000 per person.
D)   $61,000 per person.E) B) and D)
F) A) and D)

Question 3

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

Accepted Answer

A)   increase by about $83.
B)   decrease by about $83.
C)   remained unchanged.
D)   decrease by about $19.E) B) and C)
F) A) and D)

Question 4

Developing countries (DVCs)  can be subdivided into the following groups except

Accepted Answer

A)   low-income economies.
B)   high-income economies.
C)   lower-middle-income economies.
D)   upper-middle-income economies.E) None of the above
F) A) and B)

Question 5

If population is expanding at the same rate as real output,

Accepted Answer

A)   real per capita output will increase.
B)   real per capita output will decrease.
C)   real per capita output will remain unchanged.
D)   living standards will increase.E) A) and B)
F) A) and C)

Question 6

The average per capita income in 2017 for low-income developing nations was about

Accepted Answer

A)   $775.
B)   $2,100.
C)   $1,990.
D)   $4,600.E) All of the above
F) A) and D)

Question 7

What are the three basic criticisms of foreign aid to DVCs?

Accepted Answer

(1) Dependency and incentives: A basic c...

Question 8

When economists refer to capital ﬂight, they are speaking of an

Accepted Answer

A)   outﬂow of ﬁnancial capital from a certain country.
B)   outﬂow of real capital from a certain country.
C)   outﬂow of ﬁnancial and real capital from a certain country.
D)   outﬂow of human capital from a certain country.E) All of the above
F) A) and B)

Question 9

A major criticism of foreign aid to developing nations is that it

Accepted Answer

A)   is capital saving rather than capital intensive.
B)   provides incentives for a brain drain.
C)   encourages corruption and misuse of funds.
D)   gives too much power and control to the International Monetary Fund.E) All of the above
F) C) and D)

Question 10

Deﬁne "developing countries."

Accepted Answer

Developing countries are the many countr...

Question 11

Capital ﬂight is a problem to DVCs because it

Accepted Answer

A)   causes the value of a DVC's currency to appreciate.
B)   reduces the volume of DVC investment.
C)   reduces the ﬂow of foreign aid from the IACs.
D)   causes inﬂation in the DVCs.E) All of the above
F) B) and C)

Question 12

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

A)   shift the production possibilities curve for a nation outward.
B)   increase the demand for and decrease the supply of productive resources.
C)   make a nation less productive because of the need to coordinate the increased quantity of resources.
D)   lead to increased population growth that will decrease the per capita growth in a nation.E) None of the above
F) All of the above

Question 13

A factor that limits the amount of saving in developing countries is the fact that

Accepted Answer

A)   the banking system does not encourage saving.
B)   there is too much foreign aid, so savings is not needed.
C)   the level of aggregate domestic output is low.
D)   the government controls ﬁnancial institutions and makes it diﬃcult for people to save.E) B) and C)
F) A) and D)

Question 14

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

Accepted Answer

A)   a capital-using technology.
B)   a capital-saving technology.
C)   capital consumption.
D)   private capital ﬂows.E) B) and D)
F) B) and C)

Question 15

List the three major human resource problems in developing nations.

Accepted Answer

The three major human resource problems ...

Question 16

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

Accepted Answer

A)   declining death rates.
B)   increasing birth rates.
C)   reduced infant mortality.
D)   decreasing life expectancy.E) None of the above
F) C) and D)

Question 17

Which of the following is most characteristic of developing nations?

Accepted Answer

A)   a small percentage of the labor force in agriculture
B)   a relatively equitable distribution of income
C)   low levels of labor productivity
D)   low rates of population growthE) C) and D)
F) A) and C)

Question 18

Reduction of tariff barriers against DVC imports would beneﬁt both the DVCs and the IACs.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a DVC policy likely to increase DVC economic growth?

Accepted Answer

A)   encouraging direct foreign investment
B)   opening economies to world trade
C)   establishing independent central banks
D)   encouraging emigration of highly skilled workersE) A) and B)
F) None of the above

Exam 22: The Economics of Developing Countries

If it is cheaper in the long run to use a new metal plow that lasts a long time than an inferior wooden plow that needs to be replaced often, then this is an example of

Correct AnswerverifiedShow Answer

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

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Developing countries (DVCs) can be subdivided into the following groups except

Correct AnswerverifiedShow Answer

Reduction of tariff barriers against DVC imports would beneﬁt both the DVCs and the IACs.

Correct AnswerverifiedShow Answer

Income gains in the poorest DVCs may increase population growth initially, at least for a while, due to the following reasons except

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Which of the following countries had the highest per capita income (on a purchasing power parity basis) in 2017?

Correct AnswerverifiedShow Answer

List the three major human resource problems in developing nations.

Correct AnswerverifiedThe three major human resource problems ...View AnswerShow Answer

The industrially advanced countries (IACs) had an average per capita income in 2017 of around

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Deﬁne "developing countries."

Correct AnswerverifiedDeveloping countries are the many countr...View AnswerShow Answer

Capital ﬂight is a problem to DVCs because it

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The average per capita income in 2017 for low-income developing nations was about

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A factor that limits the amount of saving in developing countries is the fact that

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A major criticism of foreign aid to developing nations is that it

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What are the three basic criticisms of foreign aid to DVCs?

Correct Answerverified(1) Dependency and incentives: A basic c...View AnswerShow Answer

If the real GDP of a DVC increases from $600 billion to $630 billion and its population increases from 200 million to 216 million, its real per capita GDP will

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When economists refer to capital ﬂight, they are speaking of an

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If population is expanding at the same rate as real output,

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Which of the following is not a DVC policy likely to increase DVC economic growth?

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

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Which of the following is most characteristic of developing nations?

Correct AnswerverifiedShow Answer

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The three major human resource problems ...
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Developing countries are the many countr...
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(1) Dependency and incentives: A basic c...
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