Question 1

In 2014, the IACs (industrially advanced countries) had an average per capita income that was about 60 times as high as that of the low-income nations.

Accepted Answer

According to data from the World Bank, in 2014 the average per capita income of the high-income OECD countries was approximately 60 times that of the low-income countries.

Question 2

One way through which industrially advanced economies can help DVCs is known as "official development assistance (ODA)," or more simply,

Accepted Answer

Official development assistance (ODA) is a form of foreign aid provided by industrialized countries to developing countries. It involves the transfer of financial resources, technical assistance, and other forms of aid to support economic and social development. Foreign investment, international capital, and international trade may also benefit DVCs, but they are not the same as official development assistance.

Question 3

What is the immigration problem for DVCs?

Accepted Answer

The immigration problem for DVCs is that too few people are allowed to move from DVCs to IACs, and IAC policies tend to favor the movement of the most productive DVC workers. This creates a brain drain from DVCs, where the most educated and skilled workers leave for better economic opportunities in IACs, leaving behind a shortage of skilled workers in their home countries.

Question 4

The gap in the standards of living between the IACs (like the U.S., countries of Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been narrowing significantly over the decades.

Accepted Answer

The statement is incorrect. The gap between the standards of living of IACs and DVCs has been widening, not narrowing, over the decades.

Question 5

The demographic transition view of population growth believes that slower population growth will lead to rising incomes.

Accepted Answer

The answer of The demographic transition view of population growth...

Question 6

The richest 20 percent of the world's population receives more than 75 percent of the world's income, while the poorest 20 percent receives less than 2 percent of the world's income.

Accepted Answer

This is a well-known global income inequality statistic.

Question 7

The international organization, with 188 member nations, whose major objective is to help DVCs achieve economic growth is the

Accepted Answer

The World Bank is an international organization consisting of 188 member nations that focus on eradicating poverty and promoting economic growth in developing countries. The World Bank provides loans, policy advice, and technical assistance to developing nations to promote economic growth and reduce poverty. Therefore, the World Bank is the best choice for the given question.

Question 8

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

The recent projects like microfinance, microcredit, and cash transfers focus on giving direct aid to poor individuals rather than following the traditional approach of providing aid through governments or international organizations.

Question 9

China is close to catching up with the United States in its standard of living as measured by per capita income.

Accepted Answer

China has experienced rapid economic growth, but its per capita income remains significantly lower than that of the United States, indicating a gap in the standard of living between the two countries.

Question 10

Japan is a nation that achieved a high standard of living despite having a very limited supply of natural resources.

Accepted Answer

Japan has limited natural resources, but has still achieved a high standard of living through efficient use of technology, investment in education and infrastructure, and a strong work ethic.

Question 11

The presence of large and fast-growing populations in developing countries contributes to lower per capita incomes.

Accepted Answer

Large and fast-growing populations in developing countries often face challenges in providing basic services and infrastructure to their citizens, which can hinder economic growth and result in lower per capita incomes. The strain on resources can also lead to increased competition for jobs and resources, further driving down per capita incomes.

Question 12

The building of a new factory by a corporation would be an example of increasing the infrastructure in a developing nation.

Accepted Answer

Infrastructure typically refers to the fundamental facilities and systems serving a country, city, or area, including transportation and communication systems, utilities, and public institutions. A new factory built by a corporation is considered an investment in capital, not an increase in infrastructure.

Question 13

One suggested policy that industrially advanced nations could adopt to foster economic growth in less-developed nations would be to

Accepted Answer

Directing foreign aid to the poorest DVCs would provide necessary resources to help promote economic growth in these nations. This aid could be targeted towards infrastructure projects, education initiatives, and support for small businesses. This approach has been proven to be effective in the past, as seen in the success of programs like the Millennium Challenge Corporation, which provides aid to countries committed to good governance and economic freedom.

Question 14

A suggested policy for industrially advanced countries to adopt to encourage economic growth in developing countries would be

Accepted Answer

Reducing tariffs and import quotas on labor-intensive products would promote economic growth in developing countries by enabling them to compete in global markets and increase exports. This would create jobs and increase incomes for many people in these countries. Cutting debt relief, directing foreign aid only to the more affluent DVCs, or restricting immigration of low-skilled workers would not be effective policies for promoting economic growth in developing countries.

Question 15

When technological advances are of the capital-using kind, it is possible for an economy to increase its productivity without any net investment in capital goods.

Accepted Answer

Technological advances of the capital-using kind typically require additional investment in capital goods to implement and utilize the new technology effectively, thus increasing productivity. Without this investment, the full potential of the technological advances cannot be realized.

Question 16

Without an abundant endowment of natural resources, a nation cannot achieve rapid economic growth.

Accepted Answer

While natural resources can play a role in economic growth, they are not the only factor. Innovation, technology, skilled labor, and strong institutions also contribute to economic growth. There are many examples of countries with limited natural resources, such as Singapore and Japan, that have achieved rapid economic growth through other means.

Question 17

Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use.

Accepted Answer

In general, Domestic Savings as a percentage of GDP can vary widely among Developing and Industrialized countries, but it's not accurate to say that savings are always a larger percentage of domestic output in Developing Countries (DVCs) than in Industrialized Advanced Countries (IACs). Moreover, the effectiveness of how savings are utilized (investment efficiency) can also vary significantly within both groups and does not universally apply as stated.

Question 18

Trade barriers that restrict imports from developing countries tend to be

Accepted Answer

Trade barriers tend to be highest for those products in which developing countries (DVCs) have a comparative advantage, often to protect domestic industries in developed countries from competition.

Question 19

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

Accepted Answer

Recent efforts at providing direct cash transfers to poor individuals in DVCs have shown positive early results in which the majority of the recipients spent the money as intended. This shows that cash transfers can be effective in reducing poverty and improving livelihoods of the poor in developing countries.

Question 20

Capital flight from DVCs (developing countries) tends to offset much of the foreign loans and aid that they receive from IACs (industrially advanced countries).

Accepted Answer

Capital flight refers to the outflow of financial assets from a country. When developing countries receive foreign loans and aid, these funds may be used to finance imports or investment projects, but they may also be hoarded or siphoned off by wealthy individuals and corporations who seek to invest their money abroad. This reduces the amount of capital that is available for domestic economic development and can even lead to currency devaluation, inflation, and debt crises. Therefore, capital flight limits the potential benefits of foreign aid and loans for developing countries.

Quiz 22: The Economics of Developing Countries