Deck 19: Economic Development.

Question 1

Economically advanced capitalist countries, also known as developed countries and high-income economies, are classified by the World Bank as _____

A) developing countries.
B) low-income economies.
C) middle-income economies.
D) transitional economies.
E) industrial market countries.

Answer 1

industrial market countries.

Question 2

Which of the following is true about the GNI of the United States?

A) It includes profits earned by a Mercedes factory in Alabama.
B) It excludes profits earned by General Electric in India.
C) It includes profits earned by a Ford factory set up in India.
D) It stands for General Native Income.
E) It is the difference between the value of U.S. exports and imports.

Answer 2

It includes profits earned by a Ford factory set up in India.

Question 3

Developing countries usually have _____

A) lower rates of illiteracy.
B) lower unemployment.
C) lower population growth.
D) exports consisting mostly of agricultural products.
E) the efficient use of labor.

Answer 3

exports consisting mostly of agricultural products.

Question 4

The World Bank estimates GNI per capita and then adjusts figures across countries based on _____

A) the population growth rate in each country.
B) the unemployment rate in each country.
C) the purchasing power of the income in each country.
D) the inflation rate in each country.
E) the consumer price index in each country.

Question 5

Which of the following is true about the GNI of the United States?

A) It excludes profit earned by an American factory in Great Britain.
B) It includes profits earned by a Japanese factory in Kentucky.
C) It includes profit earned by an American factory in Great Britain.
D) It stands for General National Income.
E) It is the difference between the value of U.S. exports and imports.

Question 6

In 2016, low-income countries made up _____ of the world's population, but accounted for just _____ of world output.

A) 84 percent; 36 percent
B) 16 percent; 64 percent
C) 46 percent; 70percent
D) 12 percent; 2 percent
E) 70 percent; 46 percent

Question 7

What measures the value of the output produced by the resources of a country?

A) gross national product
B) real gross domestic product
C) nominal gross domestic product
D) gross national income
E) standard of living

Question 8

Low-income and middle-income countries are usually referred to as _____

A) developing countries.
B) low-income economies.
C) middle-income economies.
D) transitional economies.
E) industrial market countries.

Question 9

In 2016, high-income economies, home to less than _____ of the world's population, produced more than _____of the world's output.

A) one fifth; half
B) one tenth; half
C) one quarter; three quarters
D) half; three quarters

Question 10

Which of the following is not correct?

A) Differences in economic vitality among countries are huge.
B) Some of the world's 7.5 billion people have little housing or food.
C) Some of the world's 7.5 billion people have little clothing.
D) Some of the world's 7.5 billion people have no formal job.
E) Many of the world's 7.5 billion people can read or write.

Question 11

Which of the following is not true of the World Bank?

A) It is an economic development institution.
B) It is affiliated with the United Nations.
C) It offers low-fee checking accounts to anyone in the world.
D) It estimates output per capita figures.
E) It uses output per capita figures to classify economies.

Question 12

Developing countries usually have _____

A) lower rates of illiteracy.
B) lower unemployment.
C) faster population growth.
D) exports of only manufactured goods.
E) the efficient use of labor.

Question 13

The World Bank classifies countries into the three following major groups:

A) high-income economies, middle-income economies, and low-spending economies.
B) high-spending economies, middle-spending economies, and low-spending economies.
C) super-high-income economies, middle-income economies, and low-income economies.
D) high-income economies, middle-income economies, and zero-income economies.
E) high-income economies, middle-income economies, and low-income economies.

Question 14

The yardstick most often used to compare living standards across nations is _____

A) the average production cost per unit.
B) the sales revenue per month for all the firms in an economy.
C) the utility per capita.
D) the output per capita.
E) the volume of imports per year.

Question 15

High-income economies in 2016 made up only _____ of the world's population, but accounted for _____ of world output.

A) 84 percent; 36 percent
B) 16 percent; 64 percent
C) 46 percent; 70percent
D) 12 percent; 2 percent
E) 70 percent; 46 percent

Question 16

Which of the following is likely to be a characteristic of a developing country?

A) a high rate of illiteracy
B) a low rate of population growth
C) a high rate of economic growth
D) the export of only manufactured goods
E) the efficient use of labor

Question 17

Industrial market countries are also referred to as _____

A) developing countries.
B) low-income economies.
C) middle-income economies.
D) transitional economies.
E) high-income economies.

Question 18

In 2016, middle-income economies made up _____ of the world's population, but accounted for _____ of world output.

A) 84 percent; 36 percent
B) 16 percent; 64 percent
C) 46 percent; 70percent
D) 12 percent; 2 percent
E) 70 percent; 46 percent

Question 19

In 2016, low- and middle-income economies, or developing countries, made up _____ of the world's population but produced only _____ of the output.

A) 84 percent; 36 percent
B) 16 percent; 64 percent
C) 46 percent; 70percent
D) 12 percent; 2 percent
E) 70 percent; 46 percent

Question 20

Developing countries usually have _____

A) lower rates of illiteracy.
B) higher unemployment.
C) lower population growth.
D) exports of only manufactured goods.
E) the efficient use of labor.

Question 21

Developing countries have higher birth rates because _____

A) families with more children have higher levels of income.
B) children are viewed as economic and social security as parents age.
C) the opportunity cost of leisure for people in developing countries is less.
D) there are special government programs that encourage more children per family.
E) the infant mortality rate is low in developing countries.

Question 22

Compared to industrial market countries, developing countries usually have _____

A) exports consisting mostly of agricultural products and raw materials.
B) slow population growth.
C) low unemployment rates.
D) high rates of literacy.
E) a high standard of living.

Question 23

Which of the following countries has the highest infant mortality rate?

A) Japan
B) Congo
C) the United States
D) Norway
E) Germany

Question 24

Developing countries consist of _____

A) only low-income countries.
B) only middle-income countries.
C) both low-income and middle-income countries.
D) all industrial countries.
E) both industrial and middle-income countries.

Question 25

Which of the following is true of the agricultural sector in developing countries?

A) A very small percentage of the labor force is employed in agriculture.
B) Farm productivity is usually very low.
C) It relies heavily on technology.
D) It does not contribute to the exports of the countries.
E) It accounts for a high percentage of the national income.

Question 26

_____ is one of the clearest ways of distinguishing between industrial and developing countries.

A) The interest rate
B) The birth rate
C) The discount rate
D) The number of skyscrapers
E) The composition of the population

Question 27

Which of the following is true of the poorest countries of the world?

A) Children make up less than one-fifth of the population.
B) There are more people over the age of 65 than under the age of 15.
C) Children under the age of 15 make up nearly half the population.
D) Fertility rates are very low compared to those in industrial countries.
E) The growth rate in total production generally exceeds the population growth rate.

Question 28

Which of the following groups of countries has the highest incidence of HIV/AIDS?

A) Continental European countries
B) the Baltic countries
C) the Nordic countries
D) sub-Saharan African countries
E) Middle Eastern countries

Question 29

A trend in developing countries is that _____

A) the birth rate during a typical woman's lifetime has increased from three to six children.
B) attitudes toward family size are changing.
C) fertility rates increase when women have employment opportunities outside the home.
D) women earn less as they become better educated.
E) women tend to have fewer children if they are less educated.

Question 30

Nearly ____of the labor force in developing countries works in agriculture versus only about _____ in industrial market countries.

A) 50 percent; 3 percent
B) 6 percent; 4 percent
C) 46 percent; 7 percent
D) 12 percent; 2 percent
E) 70 percent; 6 percent

Question 31

Most developing countries are also known as _____

A) emerging market economies.
B) low-income economies.
C) middle-income economies.
D) transitional economies.
E) industrial market countries.

Question 32

In developing countries, farm productivity is low because _____

A) half of the labor force is involved in industrial activities.
B) half of the labor force is involved in the service sector.
C) more than half of the population consists of old people.
D) farming methods are generally primitive.
E) people prefer leisure over working.

Question 33

Which of the following regions has the lowest life expectancy at birth?

A) Continental European countries
B) the Baltic countries
C) the Nordic countries
D) sub-Saharan African countries
E) Middle Eastern countries

Question 34

Poverty can impose a special hardship on women because _____

A) they contribute more to GDP than men.
B) they have more employment opportunities compared to men.
C) they are generally more educated than men.
D) they have to work in their homes as well as in the labor market.
E) they have a higher productivity than men.

Question 35

Evidence from developing countries suggests that fertility rates decline when _____

A) households are headed by women.
B) the proportion of children in the population exceeds that of the young adults.
C) households are headed by men.
D) literacy among women declines.
E) women have employment opportunities outside their home.

Question 36

The World Health Organization (WHO) cites _____ as the biggest single threat to the world's public health.

A) malnutrition
B) female genocide
C) nuclear radiation
D) yellow fever
E) the H1N1 virus

Question 37

Gloria, who lives in a developing country, is likely to _____

A) be less educated than most men in her country.
B) be a graduate, and her brother is likely to drop out of school.
C) have more employment opportunities and earn higher wages than her male classmates.
D) work long hours on her farmland.
E) have special access to resources such as land, capital, and technology.

Question 38

_____ was one of the first countries to experience long-term economic growth during the nineteenth century.

A) New Zealand
B) India
C) Cambodia
D) Iran
E) Syria

Question 39

The primary factor that contributes to more than half of the deaths of children under the age of 5 in low-income countries is _____

A) female genocide.
B) nuclear radiation.
C) malnutrition.
D) yellow fever.
E) the H1N1 virus.

Question 40

In some developing countries, the standard of living, as measured by per capita income, has declined because _____

A) the population growth rate has exceeded the growth rate in total production.
B) the growth rate in total production has exceeded the population growth rate.
C) the infant mortality rate has exceeded the total growth rate.
D) the inflation rate has exceeded the total growth in production.
E) the growth rate in total production is not as high as the targeted growth rate.

Question 41

Unemployment is measured primarily in _____

A) rural areas.
B) urban areas.
C) industrialized nations.
D) developing countries.
E) high-income economies.

Question 42

Child labor in developing countries _____

A) means that children have to look after their grandparents.
B) pushes the government to invest in education.
C) limits educational opportunities.
D) means that children they prefer leisure over school.
E) leads the government to provide for child benefits.

Question 43

Labor productivity depends on _____

A) the effectiveness of government.
B) the size of the economy.
C) the proportion of the labor force that is unionized.
D) the amount of natural resources.
E) the risks taken by an entrepreneur.

Question 44

Which of the following leads to an inefficient use of labor?

A) underemployment
B) a high rate of economic growth
C) overemployment
D) a high rate of growth of income
E) a high rate of inflation

Question 45

Wages are low in poor countries because _____

A) businesses are poorly run.
B) the government invests in stocks and bonds.
C) more than half of the population consists of people above 65 years of age.
D) people in these countries prefer leisure over work.
E) the government provides for unemployment benefits that make workers less willing to work.

Question 46

One likely reason that a country is poor is that it _____

A) does not produce many goods and services.
B) has a low unemployment rate.
C) has a low birth rate.
D) enjoys a low infant mortality rate.
E) has a high literacy rate.

Question 47

Unemployment occurs _____

A) when skilled workers are employed in low-skill jobs.
B) when workers who are willing and able to work cannot find a job.
C) when workers drop out of the labor force in frustration.
D) only when a country adopts an export-promotion strategy.
E) only when a country adopts an import-substitution strategy.

Question 48

Labor productivity depends on _____

A) the effectiveness of government.
B) the amount of capital available in an economy.
C) the proportion of the labor force that is unionized.
D) the size of an economy.
E) the size of the labor force in an economy.

Question 49

A nation can raise its productivity by investing more in _____

A) both human and physical capital.
B) human capital only.
C) physical capital only.
D) stable foreign economies.
E) stocks and bonds rather than physical assets.

Question 50

Which of the following is true?

A) In low-income countries, 39 percent of those 15 and older were illiterate during the period of 2005 to 2009.
B) In middle-income countries, 25 percent of those 15 and older during the period of 2005 to 2009.
C) In high-income countries, 38 percent of those 15 and older during the period of 2005 to 2009.
D) Education bears little relationship to economic development in high-income countries.
E) Education is more important to the economic development of low-income countries than it is to high-income countries.

Question 51

Labor productivity depends on _____

A) the quality of labor.
B) the volume of imports.
C) the size of an economy.
D) the volume of exports.
E) the proportion of the labor force that is unionized.

Question 52

The unemployment rate in developing nations, on average, is about _____ of the urban labor force.

A) 5 percent to 10 percent
B) 10 percent to 15 percent
C) 15 percent to 20 percent
D) 20 percent to 25 percent
E) 25 percent to 30 percent

Question 53

Investing more in human and physical capital must be financed by _____

A) raising domestic taxes.
B) raising foreign taxes.
C) issuing domestic bonds.
D) issuing foreign bonds.
E) either domestic savings or foreign funds.

Question 54

In developing countries, unemployment among young workers is typically _____ that of older workers.

A) half
B) the same as
C) twice
D) 5 times
E) 10 times

Question 55

Which of the following is true?

A) In low-income countries, less than 5 percent of those 15 and older were illiterate during the period of 2005 to 2009.
B) In middle-income countries, 17 percent of those 15 and older were illiterate during the period 2005 to 2009.
C) In high-income countries, 38 percent of those 15 and older were illiterate during the period of 2005 to 2009.
D) Education bears little relationship to economic development in high-income countries.
E) Education is more important to the economic development of low-income countries than it is to high-income countries.

Question 56

Underemployment occurs _____

A) when skilled workers are employed in low-skill jobs.
B) when workers who are willing and able to work cannot find a job.
C) when workers drop out of the labor force in frustration.
D) only when a country adopts an export-promotion strategy.
E) only when a country adopts an import-substitution strategy.

Question 57

Workers are less productive in poor countries because _____

A) the wealthy minority invests in stable foreign economies.
B) the government invests in stocks and bonds.
C) more than half of the population consists of people above 65 years of age.
D) they prefer leisure over work.
E) the government provides for unemployment benefits that make workers less willing to work.

Question 58

One likely reason that a country is poor is that it _____

A) has low productivity.
B) has a low unemployment rate.
C) has a low birth rate.
D) enjoys a low infant mortality rate.
E) has a high literacy rate.

Question 59

Which of the following is true?

A) In low-income countries, 60 percent of those 15 and older were illiterate during the period of 2005 to 2009.
B) In middle-income countries, 25 percent of those 15 and older were illiterate during the period of 2005 to 2009.
C) In high-income countries, 2 percent of those 15 and older were illiterate during the period of 2005 to 2009.
D) Education bears little relationship to economic development in high-income countries.
E) Education is more important to the economic development of low-income countries than it is to high-income countries.

Question 60

Many children in developing countries drop out of school because _____

A) they have to look after grandparents.
B) the government invests in education.
C) their families can't afford it or would rather put the child to work.
D) they prefer leisure over school.
E) the government provides for child benefits.

Question 61

A primary requirement for development is _____

A) government control over the production of essential consumer products.
B) government control over the distribution of natural resources.
C) high confidence in foreign currency.
D) a low and predictable inflation rate that encourages saving.
E) the ability to print money to finance a large proportion of public outlays.

Question 62

One measure of banking presence in a nation is _____

A) the amount of credit provided by banks to that nation's agricultural sector.
B) the amount of savings that the banks set aside to meet their daily withdrawal needs.
C) the credit given out by banks to that nation's service sector.
D) the total profit of the banking sector.
E) the credit provided by banks as a percent of that nation's total output.

Question 63

Which of the following is not true for banks in developing countries?

A) Banks are often viewed with suspicion.
B) Many bank depositors withdraw their funds at the first sign of economic problems.
C) Banks often make loans for extended periods because they can easily rely on a continuous supply of deposits.
D) If financial institutions fail to serve as intermediaries between savers and borrowers, the lack of funds for investment becomes an obstacle to growth.
E) The credit provided by banks as a percentage of total output is one-fifth of that in high-income countries.

Question 64

The growth experiences of oil-rich countries indicate that _____

A) a large supply of natural resources helps in the industrialization of the countries.
B) natural resources are not enough to create a modern industrial economy.
C) low productivity is a result of low income.
D) unemployment and underemployment reflect inefficiencies of labor.
E) education makes people more receptive towards new ideas and methods.

Question 65

Unemployment occurs when _____

A) people do not work because they are not happy with the work environment.
B) people are unwilling to work at the prevailing market wage rate.
C) people prefer leisure over work.
D) people do not work because they are physically unable to work.
E) people are willing and able to work but cannot find jobs.

Question 66

Low income means less saving, and less saving means _____

A) more hard work and lower labor productivity
B) more investment in human capital.
C) more savings and less consumption.
D) more hard work and higher labor productivity.
E) less investment in human and physical capital.

Question 67

Which of the following groups of countries is most likely to have a high number of telephone lines per 1,000 people?

A) high-income industrial countries
B) countries with high birth rates
C) countries that import capital from abroad
D) low-income countries
E) middle-income countries

Question 68

In developing nations, about _____ of the combined urban and rural workforce is either unemployed or underemployed.

A) 5 percent
B) 10 percent
C) 15 percent
D) 20 percent
E) 30 percent

Question 69

Which of the following is a consequence of low income?

A) more hard work and lower labor productivity
B) more investment in human capital
C) more savings and less consumption
D) more hard work and higher labor productivity
E) less savings and less investment

Question 70

In the United States, farmers account for only _____ of the labor force but can work hundreds of acres.

A) 2 percent
B) 5 percent
C) 7 percent
D) 10 percent
E) 20 percent

Question 71

Which of the following resources is necessary to efficiently combine other resources to produce goods and services?

A) natural resources
B) capital
C) labor
D) entrepreneurial ability
E) financial institutions

Question 72

People can make better use of resources if they _____

A) have inherited family wealth.
B) are living in developed countries.
C) are a part of the government.
D) are educated.
E) have invested in stocks and bonds in other nations.

Question 73

Many developing countries were once under colonial rule, a system of government that _____

A) offered the local population large opportunities to develop entrepreneurial skills.
B) offered the local population fewer opportunities to develop entrepreneurial skills.
C) did not offer any opportunity to the local population to develop entrepreneurial skills.
D) believed in a free-market economy.
E) offered immigrants opportunities to become entrepreneurs.

Question 74

Which of the following countries has a limited stock of natural resources?

A) the United Arab Emirates
B) Chad
C) Qatar
D) Kuwait
E) Bahrain

Question 75

If Eddie Li is a skilled worker employed in a low-skill job, he is _____

A) underemployed.
B) unemployed.
C) overemployed.
D) fully employed.
E) a discouraged worker.

Question 76

Dominik Rosen, the finance minister of the country of Glassen, has concluded that entrepreneurs are unable to generate the kind of growth the country needs. His decision to create state enterprises might be motivated by the desire to _____

A) earn profit.
B) provide jobs for the friends and relatives of government officials.
C) take risks.
D) encourage a free market.
E) limit government's role in the economy.

Question 77

Most developing countries are in trouble whenever oil prices rise because _____

A) they are the major exporters of oil, and their export income falls.
B) it causes political instability in the countries.
C) it causes an increase in frictional unemployment.
D) higher oil prices drain the developing countries of foreign exchange.
E) it causes deflation in domestic economies.

Question 78

The average value added per U.S. farm worker is about _____ times that of farm workers in low- and middle-income countries.

A) twenty
B) fifteen
C) ten
D) seventy-five
E) five

Question 79

Japan's remarkable economic growth in the twentieth century was a result of _____

A) heavy imports of primary products from South Asian countries.
B) a growth in education, leading to a ready acceptance of technology.
C) a rise in the price of oil, as Japan is an oil-rich country.
D) the migration of workers from Japan.
E) an increase in employment in the agricultural sector.

Question 80

Although U.S. farmers compose only one-fiftieth of the labor force, they _____

A) are underemployed on the farms.
B) grow about the same as developing nations.
C) grow less than developing nations.
D) grow enough to feed the nation and to lead the world in exports of grain, oil seeds, and cotton.
E) grow enough to feed the nation but underproduce in exports of grain, oil seeds, and cotton.