Question 1

An example of direct foreign investment is:

Accepted Answer

A)   a U.S.bank granting a loan to a Guatemalan firm.
B)   General Motors building an auto production facility in China.
C)   a U.S.government foreign aid grant to Bangladesh.
D)   the purchase of debt issued by the Panamanian government.E) B) and C)
F) All of the above

Question 2

The World Bank:

Accepted Answer

A)   provides military assistance to those nations interested in improving national defense.
B)   makes and guarantees loans for basic development projects such as the construction of dams,roads,and schools.
C)   provides gold for DVCs that want to go on the gold standard.
D)   provides short-term loans to DVCs that are incurring balance of payments deficits.E) A) and D)
F) B) and C)

Question 3

An increasing share of the private capital flows to DVCs in recent years has been in the form of:

Accepted Answer

A)   interest-free government loans.
B)   educational and training assistance.
C)   direct foreign investment.
D)   bank loans.E) A) and B)
F) B) and C)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The World Bank:

Accepted Answer

A)   is also known as the International Monetary Fund (IMF) .
B)   lends money to developing nations for basic infrastructure projects such as dams,irrigation,health and sanitation,communications,and transportation.
C)   is an affiliate of the World Trade Organization (WTO) .
D)   provides subsidies to private firms so they can improve their wages and working conditions.E) A) and D)
F) None of the above

Question 6

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

A) True 
 B)False

Question 7

In recent decades:

Accepted Answer

A)   all countries classified as DVCs have had little or no economic growth.
B)   some nations classified as DVCs have grown rapidly while others have grown very slowly or not at all.
C)   all countries classified as DVCs have experienced rapid economic growth and rising living standards.
D)   all countries classified as low-income DVCs have had declining per capita GDPs.E) B) and D)
F) C) and D)

Question 8

Which of the following does not correlate positively with economic growth?

Accepted Answer

A)   Output per capita.
B)   Life expectancy.
C)   The percentage of the population engaged in agriculture.
D)   The literacy rate.E) C) and D)
F) A) and C)

Question 9

Famines in sub-Saharan Africa:

Accepted Answer

A)   are solely the result of unalterable weather conditions.
B)   have become less common in recent decades.
C)   are the result of drought,civil strife,large populations,and inappropriate public policies.
D)   are solely the result of government policies that overprice agricultural products.E) All of the above
F) B) and C)

Question 10

The populations of the developing nations are growing:

Accepted Answer

A)   at about 5 percent per year.
B)   at about the same rate as those of the industrially advanced nations.
C)   slower than those of the industrially advanced nations.
D)   faster than those of the industrially advanced nations.E) None of the above
F) A) and D)

Question 11

Which of the following includes only examples of industrially advanced countries (IACs) ?

Accepted Answer

A)   The United States,Canada,and Mexico.
B)   Pakistan,India,and China.
C)   Japan,South Korea,and China.
D)   Germany,Italy,and France.E) B) and C)
F) A) and B)

Question 12

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Accepted Answer

A) True 
 B)False

Question 13

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 14

In the 1990s:

Accepted Answer

A)   direct private investment to the DVCs increased and government-provided foreign aid decreased.
B)   both direct private investment and government-provided foreign aid to the DVCs increased.
C)   both direct private investment and government-provided foreign aid to the DVCs decreased.
D)   direct private investment to the DVCs decreased and government-provided foreign aid increased.E) A) and B)
F) C) and D)

Question 15

Which of the following is not inversely related to per capita income?

Accepted Answer

A)   Mortality rates for children under five years of age.
B)   Adult illiteracy rates.
C)   Per capita energy consumption.
D)   Population growth rates.E) None of the above
F) All of the above

Question 16

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC.If both nations realize a 4 percent growth of their real per capita outputs,after one year the absolute real per capita output gap will:

Accepted Answer

A)   remain unchanged at $19,000.
B)   increase by $760.
C)   decrease by $1,000.
D)   increase by $19,760.E) None of the above
F) A) and B)

Question 17

The "brain drain" problem in the DVCs refers to the fact the best-educated workers:

Accepted Answer

A)   are reluctant to become entrepreneurs.
B)   are concentrated in rural areas where their skills are underutilized.
C)   often immigrate to industrialized countries.
D)   are reluctant to work in the public sector.E) A) and B)
F) None of the above

Question 18

Approximately what percent of the world's income is received by the poorest one-fifth of the world's population?

Accepted Answer

A)   2.
B)   5.
C)   7.
D)   10.E) B) and D)
F) All of the above

Question 19

Most of the world's population lives in:

Accepted Answer

A)   North America.
B)   the DVCs.
C)   Western Europe.
D)   the IACs.E) A) and B)
F) All of the above

Question 20

In 2010,the GDP of the United States was approximately:

Accepted Answer

A)   $5 trillion less than the GDP of the 144 DVCs in that year.
B)   $5 trillion more than the GDP of the 144 DVCs in that year.
C)   twice the GDP of the 144 DVCs in that year.
D)   the same as the GDP of 144 DVCs in that year.E) B) and C)
F) A) and B)

Exam 41: The Economics of Developing Countries

Which of the following is not inversely related to per capita income?

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Approximately what percent of the world's income is received by the poorest one-fifth of the world's population?

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The populations of the developing nations are growing:

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The "brain drain" problem in the DVCs refers to the fact the best-educated workers:

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The World Bank:

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Which of the following includes only examples of industrially advanced countries (IACs) ?

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In recent decades:

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Most of the world's population lives in:

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

Correct AnswerverifiedShow Answer

In the 1990s:

Correct AnswerverifiedShow Answer

An example of direct foreign investment is:

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Which of the following does not correlate positively with economic growth?

Correct AnswerverifiedShow Answer

Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC.If both nations realize a 4 percent growth of their real per capita outputs,after one year the absolute real per capita output gap will:

Correct AnswerverifiedShow Answer

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Correct AnswerverifiedShow Answer

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

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

An increasing share of the private capital flows to DVCs in recent years has been in the form of:

Correct AnswerverifiedShow Answer

Famines in sub-Saharan Africa:

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In 2010,the GDP of the United States was approximately:

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The World Bank:

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