Question 1

In recent years, many DVCs have come to realize that

Accepted Answer

Many DVCs have realized that private capital investment is essential for economic growth. This is because private capital investment creates jobs, increases productivity, and encourages innovation. In contrast, government involvement in economic development can be inefficient and bureaucratic. While international trade can have some negative consequences for DVCs, expanding trade can also provide new opportunities for economic growth. The IMF does play a significant role in shaping economic policies in DVCs, but it is not the only institutional barrier to economic growth. Overall, the importance of private capital investment for economic growth is widely recognized among DVCs.

Question 2

The World Bank seeks to

Accepted Answer

The World Bank's primary goal is to provide assistance and funding to developing countries to achieve economic growth, reduce poverty and increase living standards. The other options listed are not the primary objectives of the World Bank.

Question 3

A large portion of foreign aid from IACs to DVCs is provided on the basis of

Accepted Answer

The answer of A large portion of foreign aid from...

Question 4

Microcredit refers to

Accepted Answer

Microcredit specifically refers to the practice of providing small loans to individuals, particularly those in developing countries, who do not have access to traditional banking services. This helps small-business owners and entrepreneurs to start or expand their businesses and can have a significant positive impact on poverty reduction and economic development. Therefore, the correct choice is B.

Question 5

Which organization primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools?

Accepted Answer

The World Bank is the primary organization that makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools. It is a specialized agency of the United Nations and consists of two institutions - the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

Question 6

The World Bank operates primarily as a

Accepted Answer

The World Bank is primarily a lender of last resort to low- and middle-income countries, providing financial and technical assistance to support development efforts.

Question 7

Industrially advanced countries can best help DVCs by

Accepted Answer

Adopting policies that expand trade with DVCs can help them by increasing their export markets and creating new industries. This can lead to job creation and economic growth, ultimately helping to reduce poverty and improve living standards in DVCs. This approach also focuses on empowering DVCs to become self-sufficient and independent, rather than relying only on external aid.

Question 8

Development experts are less enthusiastic than they used to be about three decades ago about the positive role of DVC governments in promoting economic growth in their less-developed nations
Because of the

Accepted Answer

Development experts have found that corruption in DVC governments often hinders economic growth by reducing transparency, accountability, and efficiency in public institutions. This limits foreign investment, decreases public trust in government, and diverts resources away from productive economic activities.

Question 9

Many of the major projects of the World Bank have been for

Accepted Answer

The World Bank is known for providing loans to developing countries for infrastructure projects such as building roads, bridges, and power plants. These projects aim to stimulate economic growth and reduce poverty in these countries. The World Bank also provides technical assistance and policy guidance to governments in developing countries to help them manage their economies effectively. However, the World Bank does not usually make direct loans to private citizens. Instead, its loans are usually made to governments or state-owned enterprises. Therefore, option B is the best choice.

Question 10

Which two of the following countries had the worst score in the Corruption Perceptions Index in 2015?

Accepted Answer

Somalia and Afghanistan had the worst score in the Corruption Perceptions Index in 2015 with a score of 8 out of 100.

Question 11

Industrially advanced countries can help developing countries by

Accepted Answer

Increasing the flows of private capital to DVCs can help them in their economic development and growth. This can be done through foreign direct investment, portfolio investment, and other financial flows. It can provide the necessary capital to invest in infrastructure, technology, and education, which can help boost the productive capacity of the country and stimulate economic growth. Options A and B can limit the market access for DVCs and discourage their export earnings. Option D can impede the autonomy and control of DVCs over their own economic policies and financial sector.

Question 12

Which of the following is not a reason why government may play a key role in the early stage of economic development in developing nations?

Accepted Answer

While government regulation may be necessary to prevent exploitation and promote fair competition, the abundance of entrepreneurs is not a reason for government to play a key role in economic development. Rather, government may play a key role in providing infrastructure, encouraging saving and investment, and ensuring law and order.

Question 13

Avenues for the government to foster economic growth and development include the following, except

Accepted Answer

Nationalization and protection of domestic industries may actually hinder economic growth by reducing competition and innovation. The other options, B, C, and D, have been proven to be effective in fostering economic growth and development.

Question 14

The role of government in fostering economic growth in DVCs has been criticized because

Accepted Answer

Poor administration and corruption in government can hinder economic growth instead of fostering it. This includes misallocation of resources, nepotism, and lack of transparency which can scare away investors and discourage business activity. Therefore, the role of government in economic growth must be balanced with effective governance and anti-corruption measures.

Question 15

Microﬁnance or microcredit can help directly support

Accepted Answer

Microfinance or microcredit provides financial services to entrepreneurs who lack access to traditional banking services. These services include loans, savings accounts, and insurance. Therefore, choice C - entrepreneurs - is the best answer. While microfinance indirectly benefits labor and consumers by creating jobs and improving access to products and services, it does not directly support local governments.

Question 16

Government can play a major positive role in the early stage of economic development by

Accepted Answer

Providing adequate infrastructure, such as roads, ports, and utilities, is crucial for attracting investment, facilitating trade and commerce, and promoting economic growth. Establishing price controls or subsidies can distort markets and lead to inefficiencies. Creating marketing boards may also hinder competition and innovation. Therefore, A is the best choice.

Question 17

Which of the following is not a way for industrially advanced countries (IACs) to help developing countries (DVCs) achieve faster economic growth?

Accepted Answer

Subsidizing their own agricultural sectors would actually harm the economic growth of DVCs by making it difficult for them to compete and develop their own agriculture industries. The other options, expanding trade, admitting more temporary workers, and discouraging arms sales, can all potentially help DVCs achieve faster economic growth.

Question 18

Which two of the following countries had the best score in the Corruption Perceptions Index in 2015?

Accepted Answer

According to the Corruption Perceptions Index 2015, Denmark and Singapore had the best score with 91 out of 100 points, while Japan and Spain scored 75 and 58 points respectively, China and Russia scored 37 and 29 points respectively, and the United States and Canada scored 76 and 83 points respectively.

Question 19

Economists would most likely suggest that advanced nations can best assist in the economic development of developing nations by

Accepted Answer

Economists generally support reducing trade barriers and increasing private and public capital to assist in the economic development of developing nations. This allows for increased market access and investment opportunities, which can lead to economic growth and development. Increasing trade barriers or military aid may not address the underlying problems facing developing nations and could potentially worsen their economic situation. Decreasing private capital or foreign aid may also limit the resources available for development.

Question 20

One of the major objectives of the World Bank is to

Accepted Answer

The World Bank's primary objective is to provide financial and technical assistance to developing countries (DVCs) in order to reduce poverty and improve living standards. While the World Bank has a diverse range of programs and initiatives, its overall focus is on helping countries and communities achieve sustainable development. Providing financial backing for the United Nations or maximizing profits for shareholders are not among the World Bank's primary objectives, and it does not play a direct role in exchange rate stabilization.

Quiz 22: The Economics of Developing Countries