Question 1

An advantage of direct foreign investment (compared to foreign loans) is that management skill and technological knowledge often accompany such capital flows.

Accepted Answer

A) True 
 B)False

Question 2

Brazil, Mexico, and Thailand are referred to as

Accepted Answer

A)  industrially advanced countries.
B)  upper-middle-income developing countries.
C)  low-income developing countries.
D)  command economies.E) B) and D)
F) A) and D)

Question 3

State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of

Accepted Answer

A)  free immigration and emigration.
B)  privatizing state industries.
C)  central planning.
D)  free trade.E) B) and C)
F) A) and D)

Question 4

(Last Word)  Loans offered through microcredit programs

Accepted Answer

A)  are usually spent on food.
B)  suffer from low repayment rates.
C)  have very high repayment rates.
D)  have lifted borrowers out of poverty at a faster pace than nonrecipients of loans.E) B) and D)
F) B) and C)

Question 5

The demographic transition view of population and growth in DVCs is that

Accepted Answer

A)  the most important factor affecting population growth in DVCs is demographic changes among the elderly.
B)  slower population growth is neither desirable nor productive for DVCs given the state of the economies in these nations.
C)  reduced birth rates must come first in DVCs, and then higher per capita incomes will follow.
D)  higher per capita incomes must come first in DVCs, and then reduced birth rates will follow.E) C) and D)
F) A) and C)

Question 6

The United States in 2014 had about

Accepted Answer

A)  1.8 percent of the world's population and generated about 10 percent of the world's output.
B)  2.4 percent of the world's population and generated about 20 percent of the world's output.
C)  4.4 percent of the world's population and generated about 22 percent of the world's output.
D)  10 percent of the world's population and generated about 30 percent of the world's output.E) A) and C)
F) B) and C)

Question 7

The demographic transition view alleges that

Accepted Answer

A)  the DVCs must first accept the use of birth control techniques to increase their standards of living.
B)  population growth will decline only if mortality rates exceed birth rates.
C)  if incomes first rise, population growth will then decline.
D)  population growth has no bearing on a nation's per capita income.E) B) and C)
F) None of the above

Question 8

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) A) and B)
F) All of the above

Question 9

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

Accepted Answer

A) True 
 B)False

Question 10

An institutional change that is needed in most developing nations is

Accepted Answer

A)  the will to develop.
B)  reduced foreign aid.
C)  birth control.
D)  land reform.E) B) and D)
F) A) and B)

Question 11

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Accepted Answer

A)  all sponsored by local governments.
B)  done through the United Nations.
C)  launched by universities and colleges.
D)  focused on giving direct aid to poor individuals.E) A) and B)
F) A) and C)

Question 12

If the real output of a DVC increases from $200 billion to $260 billion and its population increases from 100 to 120 million, its real per capita output will have

Accepted Answer

A)  remained unchanged.
B)  increased by about $167.
C)  increased by about $55.
D)  decreased by about $20.E) None of the above
F) A) and C)

Question 13

The low per capita outputs of the DVCs are explained by

Accepted Answer

A)  insufficient saving and investment.
B)  overinvestment in human capital.
C)  slow population growth.
D)  excessively rapid technological advance.E) None of the above
F) All of the above

Question 14

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

Accepted Answer

A)  Cash transfers never worked, because the recipients just wasted the money on unproductive spending.
B)  These transfers have shown positive early results; the majority of the recipients spent the money as intended.
C)  Only conditional cash transfers worked.Unconditional cash transfers never worked.
D)  These cash transfers worked only if the aid providers frequently followed up on the recipients.E) All of the above
F) B) and C)

Question 15

Microfinance or microcredit can help directly support

Accepted Answer

A)  labor or workers.
B)  local governments.
C)  entrepreneurs.
D)  consumers.E) A) and D)
F) B) and C)

Question 16

A large portion of foreign aid from IACs to DVCs is provided on the basis of

Accepted Answer

A)  economic considerations.
B)  geographical considerations.
C)  humanitarian considerations.
D)  politico-military considerations.E) B) and C)
F) A) and D)

Question 17

Which of the following is not a way for industrially advanced countries (IACs)  to help developing countries (DVCs)  achieve faster economic growth?

Accepted Answer

A)  expanding trade
B)  admitting more temporary workers
C)  subsidizing their own (i.e., the IACs')  agricultural sectors
D)  discouraging arms salesE) All of the above
F) B) and C)

Question 18

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Accepted Answer

A) True 
 B)False

Question 19

The idea that a person's productive efforts and his or her economic rewards are unrelated

Accepted Answer

A)  is the neocolonialism view of economic development.
B)  describes the vicious circle of poverty.
C)  is the surplus labor theory of economic development.
D)  is the capricious universe view.E) All of the above
F) A) and D)

Question 20

Based on population and economic development trends, the world population is expected to in the last part of this century.

Accepted Answer

A)  explode
B)  increase mildly
C)  become stable and constant
D)  declineE) C) and D)
F) A) and B)

Exam 22: The Economics of Developing Countries

Which of the following is not a way for industrially advanced countries (IACs) to help developing countries (DVCs) achieve faster economic growth?

Correct AnswerverifiedShow Answer

Microfinance or microcredit can help directly support

Correct AnswerverifiedShow Answer

A large portion of foreign aid from IACs to DVCs is provided on the basis of

Correct AnswerverifiedShow Answer

The United States in 2014 had about

Correct AnswerverifiedShow Answer

(Last Word) Loans offered through microcredit programs

Correct AnswerverifiedShow Answer

An institutional change that is needed in most developing nations is

Correct AnswerverifiedShow Answer

The low per capita outputs of the DVCs are explained by

Correct AnswerverifiedShow Answer

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

In contrast to international development efforts in most of the 20th century, more recent projects like microfinance, microcredit, and cash transfers in the last few decades represent a major shift.That is because these recent projects are

Correct AnswerverifiedShow Answer

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Correct AnswerverifiedShow Answer

Brazil, Mexico, and Thailand are referred to as

Correct AnswerverifiedShow Answer

If the real output of a DVC increases from $200 billion to $260 billion and its population increases from 100 to 120 million, its real per capita output will have

Correct AnswerverifiedShow Answer

An advantage of direct foreign investment (compared to foreign loans) is that management skill and technological knowledge often accompany such capital flows.

Correct AnswerverifiedShow Answer

The demographic transition view alleges that

Correct AnswerverifiedShow Answer

State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of

Correct AnswerverifiedShow Answer

The idea that a person's productive efforts and his or her economic rewards are unrelated

Correct AnswerverifiedShow Answer

The demographic transition view of population and growth in DVCs is that

Correct AnswerverifiedShow Answer

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown which of the following results?

Correct AnswerverifiedShow Answer

Based on population and economic development trends, the world population is expected to in the last part of this century.

Correct AnswerverifiedShow Answer

Because families can afford to have more children, population growth is greater in the IACs than in the DVCs.

Correct AnswerverifiedShow Answer

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