Question 1

Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by

Accepted Answer

Large agricultural subsidies for food and fiber in IACs lead to overproduction and lower world agricultural prices, which in turn reduces the export income of the DVCs. This has a negative impact on the economies of the DVCs as they heavily depend on agriculture as a source of income.

Question 2

Which of the following DVC policies is not likely to increase DVC economic growth?

Accepted Answer

Restricting direct foreign investment from abroad is not likely to increase economic growth as it limits the inflow of capital and technology that can be beneficial for development. The other options have a direct positive impact on economic growth. Privatizing state industries can increase efficiency and innovation, controlling population growth can enhance human capital and reduce resource constraints, and building human capital can increase productivity and innovation.

Question 3

State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firm to set up their own businesses.This statement is an argument in favor of

Accepted Answer

The statement suggests that state industries are not conducive to developing entrepreneurial individuals who are focused on making a profit and may encourage such individuals to start their own businesses. Therefore, the best choice is to privatize state industries, which would create a more competitive environment and encourage entrepreneurship, leading to economic growth. Free immigration and emigration, central planning, and free trade are not directly related to the issue highlighted in the statement.

Question 4

Most nations of the world are now IACs, not middle- and low-income DVCs.

Accepted Answer

Most nations of the world are classified as middle- and low-income developing countries (DVCs), not high-income advanced countries (IACs).

Question 5

Foreign aid to the DVCs has been criticized

Accepted Answer

All of the given reasons are valid criticisms of foreign aid to the DVCs. Aid may create a dependency on IACs, encourage centralized government power over the economy, and be misused due to government corruption in the receiving countries.

Question 6

(Last Word) Providing poor families with grants if they send their children to school and get proper medical care is known as

Accepted Answer

Providing poor families with grants if they send their children to school and get proper medical care is a form of conditional cash transfer. This means that the grants are given on the condition that certain criteria are met, such as children attending school or receiving medical care. Unconditional cash transfers, on the other hand, are given without any conditions attached. In-kind transfers refer to the provision of goods or services instead of cash, and microcredit is a form of lending to help people start small businesses.

Question 7

Development assistance as a percentage of GDP is greatest for which of the following industrialized nations (as of 2015)?

Accepted Answer

The answer of Development assistance as a percentage of GDP...

Question 8

Economic growth in the DVCs might increase if IACs

Accepted Answer

If IACs reduce their tariffs and import quotas, it will lead to an increase in trade between IACs and DVCs. This will result in an increase in demand for DVC products, which will drive the economic growth in the DVCs.

Question 9

Which of the following is not a DVC policy likely to increase DVC economic growth?

Accepted Answer

Encouraging emigration of highly skilled workers would not increase DVC economic growth because it could lead to a brain drain, where the most talented and educated individuals leave the country for opportunities abroad, reducing the pool of skilled workers available to contribute to the economy. The other policies listed, such as encouraging direct foreign investment, opening up to world trade, and establishing independent central banks, are all commonly recognized as policies that contribute to economic growth.

Question 10

(Last Word) Early experiments with unconditional cash transfers have revealed that

Accepted Answer

Early experiments with unconditional cash transfers have shown that a majority of recipients use the money for training and equipment that results in a higher long-term income. This suggests that unconditional cash transfers can have a positive impact on the long-term earning power of individuals.

Question 11

An example of direct foreign investment is

Accepted Answer

Direct foreign investment involves a company investing in and owning a foreign company or establishing a new foreign subsidiary. General Motors building an auto production facility in China is a clear example of direct foreign investment, as they are establishing a new subsidiary company in China to produce vehicles. The other options involve different types of financial transactions or aid, but do not involve direct ownership or control of a foreign entity.

Question 12

DVCs tend to have permanent shortages of farm labor.

Accepted Answer

The answer of DVCs tend to have permanent shortages of...

Question 13

Most of the DVCs of the world are located in Western Europe.

Accepted Answer

Most of the Developed Countries (DVCs) are spread across different regions including North America, Western Europe, and parts of Asia and Oceania, not predominantly in Western Europe.

Question 14

Which of the following is a true statement?

Accepted Answer

The answer of Which of the following is a true...

Question 15

(Last Word) Loans offered through microcredit programs

Accepted Answer

Studies have shown that microcredit loans have a very high repayment rate, often above 95%. This success has been attributed to the fact that microcredit programs provide more than just loans, but also include training and support for the borrowers. These loans have also been successful in lifting borrowers out of poverty at a faster pace than nonrecipients of loans. While borrowers may use the loans for a variety of expenses, including food, there is no evidence to suggest that food is the primary use of microcredit loans.

Question 16

The vast majority of the labor forces of the low-income DVCs are engaged in agriculture.

Accepted Answer

According to the World Bank, in low-income DVCs, about 60-70% of the labor force is engaged in agriculture.

Question 17

An increasing share of the private capital flows to DVCs in recent years has been in the form of

Accepted Answer

Direct foreign investment has been an increasingly common form of private capital flows to DVCs in recent years, as investors seek new markets and sources of growth. This involves investing in companies or setting up subsidiaries in the DVCs to take advantage of lower costs, favorable regulations, or other opportunities. Interest-free government loans and educational/training assistance may be forms of aid or development assistance, but they are not typically considered private capital flows. Bank loans may be a source of financing as well, but they are typically more limited in scope than direct foreign investment.

Question 18

In recent years, the governments of the IACs have

Accepted Answer

In recent years, some IACs have forgiven a portion of the debt owed by some low-income DVCs to promote economic development and reduce poverty. This has been done through debt relief initiatives such as the Heavily Indebted Poor Countries (HIPC) program and the Multilateral Debt Relief Initiative (MDRI).

Question 19

(Last Word) Early experience with conditional cash transfers has revealed that

Accepted Answer

Early experience with conditional cash transfers has shown that while they do encourage school enrollment, the limited quality of schools can limit their effectiveness in lifting people out of poverty. There is no evidence to support A or B, and while D may be true to some extent, it is not the main finding of early experience with these transfers.

Question 20

In recent years, U.S.foreign aid has been

Accepted Answer

The answer of In recent years, U.S.foreign aid has been
...

Quiz 22: The Economics of Developing Countries