Question 1

One major path that leads to growth in both developing nations (DVCs) as well industrially advanced nations (IACs) is that productive resources must be

Accepted Answer

In both developing and industrially advanced nations, the efficient use of productive resources is essential for growth. This includes optimizing inputs such as labor, capital, and natural resources, as well as increasing productivity through innovation and technological advancements. Simply redistributing resources or focusing solely on export industries may have short-term benefits, but sustainable growth ultimately depends on efficient resource allocation. Public sector ownership and management can sometimes be beneficial, but it is not the sole factor that leads to growth in these countries.

Question 2

The two paths to economic development, which are the same for both developing countries and industrially advanced economies, are

Accepted Answer

Both developing countries and industrially advanced economies can achieve economic development by using existing resources more efficiently and expanding the available resources. This can be done through improved technology, education and training, infrastructure development, and investment in research and development. Expanding the government sector and preserving all available resources, enhancing regulation and taxation, and redistributing income to reduce income disparity may have some positive impacts but are not necessarily the most effective paths to economic development. Likewise, expanding the money supply and eliminating budget deficits may lead to short-term economic growth but can also lead to inflation and long-term economic instability.

Question 3

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will

Accepted Answer

Expanding the supplies of raw materials, capital equipment, effective labor, and technological knowledge will increase the productive capacity of a nation, allowing it to produce more goods and services. This will cause the production possibilities curve to shift outward.

Question 4

One common measure of the "standard of living" in a nation is

Accepted Answer

Per capita real income is a more accurate measure of the standard of living as it takes into account the purchasing power of the average person in the country. Unemployment rate and population size have no direct correlation with the standard of living, while real GDP only measures the total output of goods and services in a country and does not factor in inequality or distribution of wealth.

Question 5

Most developing countries (DVCs) exhibit a low level of

Accepted Answer

Most developing countries exhibit a low level of life expectancy due to factors such as inadequate healthcare, poor nutrition, and higher rates of diseases.

Question 6

Over the next 15 years, roughly what percentage of the increase in world population will come from DVCs?

Accepted Answer

Over the next 15 years, approximately 90 percent of the increase in world population is expected to come from developing countries (DVCs), reflecting higher birth rates and younger populations in these regions compared to developed countries.

Question 7

Which of the following countries had the highest per capita energy consumption in 2013?

Accepted Answer

The United States had the highest per capita energy consumption in 2013, at approximately 309 million British thermal units (Btu) per person. India, China, and Japan all had lower per capita energy consumption levels in 2013.

Question 8

At the beginning of the year, one developing country (DVC) has a real income per capita of $800.In a developed country (IAC), the real income per capita is $30,000.Both countries experience a 4 percent growth rate for the year.At the end of the year, the absolute income gap between these two countries will have increased from $29,200 to

Accepted Answer

The absolute income gap increases because both countries grow at the same percentage rate, but the base amounts are vastly different. For the DVC, a 4% increase on $800 is $32, making its new income $832. For the IAC, a 4% increase on $30,000 is $1,200, making its new income $31,200. The new gap is $31,200 - $832 = $30,368, which is an increase from the original $29,200 gap.

Question 9

Which of the following countries had the highest per capita income (on a purchasing power parity basis) in 2014?

Accepted Answer

According to the World Bank, the United States had the highest per capita income (on a purchasing power parity basis) in 2014, with $54,597. China had $13,416, Japan had $38,894, and Brazil had $15,737.

Question 10

Assume the total real output of a developing country increases from $8 billion to $8.2 billion, while its population expands from 14 to 15 million people from one year to the next.Over the year, per capita income has

Accepted Answer

The answer of Assume the total real output of a...

Question 11

One of the essential paths to economic growth is

Accepted Answer

Using existing resources more efficiently is essential to economic growth because it allows for increased productivity and output without the need for additional resources. This can lead to cost savings, increased competitiveness, and ultimately, economic growth. Increasing population growth, expanding the role of government, and expanding tax credits for business investment may have some impact on economic growth, but they are not as essential as using existing resources more efficiently.

Question 12

Which of the following factors contributes most to the high per capita incomes in developed nations?

Accepted Answer

High rates of economic growth contribute most to the high per capita incomes in developed nations. This growth often comes from a combination of factors such as technological advancements, investments, and efficient allocation of resources, leading to increased productivity and higher levels of income. High rates of population growth, low rates of investment, and low rates of saving can all have negative impacts on economic growth and therefore, do not contribute to high per capita incomes.

Question 13

If the per capita incomes of DVCs (developing countries) grew at the same annual rate as those of IACs (industrially advanced countries), then the absolute income gap between rich and poor nations over the years would

Accepted Answer

If both developing and industrially advanced countries grow at the same percentage rate, the absolute dollar amount of growth in the richer countries will be larger because they are growing from a higher base. This results in the absolute income gap between rich and poor nations widening over time.

Question 14

Per capita income in the United States in 2014 was how many times greater than that in China?

Accepted Answer

According to the World Bank, the per capita income in the United States in 2014 was approximately $54,629, while in China it was approximately $7,260. This means that the per capita income in the United States was approximately 7.5 times greater than that in China ($54,629 / $7,260 = 7.53). Therefore, the correct answer is C)7.5 times.

Question 15

An IAC (industrially advanced country) had a per capita income of $28,200, while a DVC (developing country) had a per capita income of $1,200 in a given year.If both countries experience a per-capita-income growth of 2 percent, then their respective per-capita-income levels one year later will become

Accepted Answer

A 2 percent increase in $28,200 results in $28,200 * 1.02 = $28,764. Similarly, a 2 percent increase in $1,200 results in $1,200 * 1.02 = $1,224.

Question 16

Which of the following is not a characteristic of human resources in the poorest DVCs?

Accepted Answer

The statement "Population growth is low" is not a characteristic of human resources in the poorest DVCs. In fact, many of these countries have high population growth rates due to factors such as lack of access to family planning and high infant and child mortality rates. The other characteristics listed - large populations, widespread unemployment and underemployment, and low labor productivity - are commonly seen in the poorest DVCs.

Question 17

Per capita income in the United States in 2014 was about

Accepted Answer

According to the United States Census Bureau, the per capita income in the United States in 2014 was $55,200 per person.

Question 18

Assume that the real output of a developing nation increases from $120 billion to $140 billion, while its population expands from 100 to 110 million.As a result, real income per capita has increased by about

Accepted Answer

The answer of Assume that the real output of a...

Question 19

Low-income developing countries generally have the following characteristics except

Accepted Answer

Low-income developing countries typically have high population growth rates, in some cases due to limited access to family planning and healthcare resources. B, C, and D are all common characteristics of low-income developing countries.

Question 20

Which of the following factors contributes to the weak economic growth in DVCs?

Accepted Answer

A decrease in the prices of natural resources in DVCs can lead to a decline in export revenues and reduced investment in the natural resource sector, thereby contributing to weak economic growth. Increases in labor productivity, decreases in international debts, and increases in saving can all contribute positively to economic growth.

Quiz 22: The Economics of Developing Countries