Question 1

Trade barriers that restrict imports from developing countries tend to be

Accepted Answer

Trade barriers are often highest for those products in which developing countries (DVCs) have a comparative advantage, such as agricultural goods and labor-intensive manufactured products. This is because developed countries aim to protect their domestic industries from competition.

Question 2

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 less-developed countries (DVCs) can help to alleviate poverty and promote economic growth. This aid can be used to build infrastructure, improve education and healthcare, and support small businesses in these nations. Additionally, aid can help to promote stability and reduce conflict, which are also necessary for economic growth. By targeting aid to the poorest nations, industrial nations can help to ensure that their aid is having a meaningful impact where it is needed most.

Question 3

What is the immigration problem for DVCs?

Accepted Answer

The passage suggests that 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. Therefore, choice C is the correct answer.

Question 4

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 type of foreign aid provided by developed countries to developing and vulnerable countries (DVCs) in order to promote economic and social development. This assistance can come in the form of grants, loans, technical assistance, and other forms of support. ODA is an important tool for supporting DVCs in their efforts to reduce poverty, improve healthcare, education, and infrastructure, and promote sustainable economic growth. Foreign investment, international capital, and international trade are also important sources of development financing and can complement ODA, but they are not synonymous with ODA.

Question 5

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

Unlike international development efforts of the past, which often involved large-scale infrastructure projects aimed at improving the overall economy of a country or region, microfinance, microcredit, and cash transfer projects are focused on providing direct aid and support to individual members of impoverished communities. These projects aim to provide individuals with the resources needed to improve their own lives, rather than relying on large-scale economic changes to trickle down to the poor.

Question 6

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 lead to increased demand for these products from developing countries, which in turn would increase economic growth and job creation in those countries. This would also benefit the industially advanced countries by providing them with cheaper imports and potentially new markets for their own exports. Cutting debt relief, directing aid only to affluent countries, and restricting low-skilled immigration would all likely have negative impacts on economic growth for developing countries.

Question 7

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 gap in the standards of living between the IACs and the DVCs have not been narrowing significantly, it has been widening over the years.

Question 8

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 statement is true based on data from the World Bank.

Question 9

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

Accepted Answer

The World Bank's primary goal is to help developing countries achieve sustainable economic growth and reduce poverty by providing loans, technical assistance, and policy advice. The World Trade Organization primarily focuses on regulating international trade, while the G8 Nations is a political forum for the world's major industrialized democracies. The United Nations has various goals, one of which is promoting economic and social development, but it is not solely focused on helping DVCs achieve economic growth.

Question 10

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 economy cannot fully leverage the benefits of the technological advances.

Question 11

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

Accepted Answer

With a higher population, there is often more competition for resources, which can lead to lower wages and a lower standard of living. Additionally, large populations can put strain on infrastructure and government resources, making it difficult to sustain high levels of economic growth.

Question 12

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

This statement is true according to World Bank data from 2014. The average per capita income of IACs was around $41,000, while that of low-income nations was around $680. This means IACs had a per capita income that was about 60 times higher than low-income nations.

Question 13

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 such as fossil fuels, metals, and minerals. However, it has managed to achieve a high standard of living through its strong focus on technology, innovation, and high-quality manufacturing. Japan has also established strong trade partnerships with other countries to import the resources it needs.

Question 14

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 movement of large amounts of money from one country to another, often due to instability or lack of confidence in the economy. This outflow of capital can significantly reduce the impact of foreign loans and aid received by developing countries, causing their economies to suffer. Therefore, it is true that capital flight from DVCs tends to offset much of the foreign loans and aid that they receive from IACs.

Question 15

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 and has made significant strides in improving its standard of living. However, its per capita income still significantly lags behind that of the United States, primarily due to the vast population size and uneven wealth distribution.

Question 16

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 17

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. The majority of the recipients spent the money as intended, indicating that these transfers are effective in improving the financial situation of the poor.

Question 18

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

Accepted Answer

While natural resources can certainly contribute to economic growth, a nation can achieve rapid economic growth through other means such as human capital development, technological innovation, efficient institutions, and trade. Examples of countries without significant natural resources but with high economic growth rates include Singapore, South Korea, and Taiwan.

Question 19

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, Developed Countries (DCs) or Industrialized Advanced Countries (IACs) tend to have higher savings rates compared to Developing or Less Developed Countries (DVCs or LDCs), mainly due to higher income levels and more developed financial markets that encourage saving. The assertion that saving is put to poor use in DVCs is overly broad and does not accurately reflect the diverse economic contexts and investment climates across different countries.

Question 20

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.

Quiz 19: The Economics of Developing Countries