Question 1

Which of the following helps low-income countries grow rapidly relative to high-income countries?

Accepted Answer

A)   Low-income countries are in a better position to save a larger share of their income.
B)   Low-income countries can employ technologies and practices that have been successful in high-income countries.
C)   Low-income countries generally have legal systems that protect property rights and enforce contracts in a more evenhanded manner.
D)   Low-income countries generally have more favorable weather conditions.E) A) and B)
F) A) and C)

Question 2

Economic development encompasses which of the following measures?

Accepted Answer

A)   Economic growth.
B)   The political environment.
C)   Education.
D)   All of the above.E) A) and B)
F) All of the above

Question 3

Which of the following is most likely to be a major source of growth in per capita GDP?

Accepted Answer

A)   A high investment/GDP ratio
B)   A high rate of inflation
C)   Rapid population growth
D)   Rapid growth in the money supplyE) A) and B)
F) C) and D)

Question 4

A country cannot develop without a large natural resource base.

Accepted Answer

A) True 
 B)False

Question 5

If a country's population grows at the same rate as its real GDP, then real per capita GDP:

Accepted Answer

A)   grows at an increasing rate.
B)   grows at a constant rate.
C)   doesn't change.
D)   decreases at a decreasing rate.
E)   decreases at a constant rate.F) All of the above
G) A) and D)

Question 6

According to the text, Ireland and Israel are classified as industrially advanced countries (IACs).

Accepted Answer

A) True 
 B)False

Question 7

Most less-developed countries have sufficient infrastructure in place to become a developed country.

Accepted Answer

A) True 
 B)False

Question 8

The nation of Exland is considered a less-developed country and has the following characteristics. Which one is not typical of a less-developed country?

Accepted Answer

A)   High illiteracy.
B)   High unemployment.
C)   Rapid growth of technology.
D)   Low growth in technology.
E)   Rapid population growth.F) B) and D)
G) B) and C)

Question 9

Which of the following statements is true ?

Accepted Answer

A)   A less developed country (LD
C)   is a country with a low GDP per capita, low levels of capital, and uneducated workers.
B)   The vicious circle of poverty exists because GDP must rise before people can save and invest.
C)   LDCs are characterized by rapid population growth and low levels of investment in human capital.
D)   All of the above.E) B) and C)
F) All of the above

Question 10

The vicious circle of poverty refers to a condition where:

Accepted Answer

A)   c and d.
B)   c and e.
C)   people are poor because they cannot invest in capital goods and they cannot invest in capital goods because they are poor.
D)   people cannot invest in capital goods because they are poor and they are poor because they cannot invest in capital goods.
E)   poverty is relative and poor people remain poor because the wealthy grow wealthier.F) A) and C)
G) All of the above

Question 11

Economic development encompasses which of the following measures?

Accepted Answer

A)   Distribution of income.
B)   Legal system.
C)   Transportation structures.
D)   All of the above.E) B) and C)
F) A) and D)

Question 12

Which of the following is not generally considered to be an ingredient for economic growth?

Accepted Answer

A)   Investment in human capital.
B)   Political instability.
C)   High savings rate and investment in capital.
D)   Growth in technology.
E)   Investment in infrastructure.F) B) and C)
G) A) and B)

Question 13

The vicious circle of poverty is the trap in which the LDC is too poor to save and therefore it cannot invest and remains poor.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a true statement?

Accepted Answer

A)   The LDC classification is of the questionable accuracy.
B)   GDP per capita ignores the degree of income distribution.
C)   GDP per capita is affected by exchange rate changes.
D)   GDP per capita does not account for the difference in the cost of living among nations.
E)   All of the above are true.F) A) and E)
G) None of the above

Question 15

Receipt of foreign aid permits less-developed countries to move to a point outside their production possibilities curve.

Accepted Answer

A) True 
 B)False

Question 16

The world bank is the agency of the U.S. State Department that is in charge of U.S. loans to foreign countries.

Accepted Answer

A) True 
 B)False

Question 17

A country can develop without a large natural resource base.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an example of a country's infrastructure?

Accepted Answer

A)   Transportation system.
B)   Communications system.
C)   Political system.
D)   Educational system.
E)   Energy system.F) A) and C)
G) A) and D)

Question 19

Economic growth and development in LDCs are low because many of them lack:

Accepted Answer

A)   saving.
B)   infrastructure.
C)   a political environment favorable to growth.
D)   All of the above.E) All of the above
F) C) and D)

Question 20

Which of the following would be most likely to improve the standard of living of people in less-developed nations?

Accepted Answer

A)   the development of strong labor unions
B)   an increase in foreign investment
C)   an increase in the share of the population under 15 years of age
D)   higher tariffs and the imposition of other restraints designed to restrict international tradeE) A) and B)
F) All of the above

Exam 23: Growth and the Less-Developed Countries

The vicious circle of poverty is the trap in which the LDC is too poor to save and therefore it cannot invest and remains poor.

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Economic growth and development in LDCs are low because many of them lack:

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The vicious circle of poverty refers to a condition where:

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A country can develop without a large natural resource base.

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A country cannot develop without a large natural resource base.

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According to the text, Ireland and Israel are classified as industrially advanced countries (IACs).

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Which of the following is not an example of a country's infrastructure?

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Which of the following helps low-income countries grow rapidly relative to high-income countries?

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Economic development encompasses which of the following measures?

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Which of the following statements is true ?

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The world bank is the agency of the U.S. State Department that is in charge of U.S. loans to foreign countries.

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The nation of Exland is considered a less-developed country and has the following characteristics. Which one is not typical of a less-developed country?

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Which of the following is a true statement?

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If a country's population grows at the same rate as its real GDP, then real per capita GDP:

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Which of the following is most likely to be a major source of growth in per capita GDP?

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Economic development encompasses which of the following measures?

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Receipt of foreign aid permits less-developed countries to move to a point outside their production possibilities curve.

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Most less-developed countries have sufficient infrastructure in place to become a developed country.

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Which of the following would be most likely to improve the standard of living of people in less-developed nations?

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Which of the following is not generally considered to be an ingredient for economic growth?

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