Question 1

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 2

Per capita income in the United States in 2014 was about

Accepted Answer

According to the Bureau of Economic Analysis, the per capita personal income in the United States in 2014 was approximately $55,200.

Question 3

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, followed by Japan, China, and India.

Question 4

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, roughly 90 percent of the increase in world population is expected to come from developing countries (DVCs). This is due to higher birth rates and younger populations in these regions compared to developed countries.

Question 5

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 developing country, a 4% increase is $32 ($800 * 0.04), making its new income $832. For the developed country, a 4% increase is $1,200 ($30,000 * 0.04), making its new income $31,200. The new gap is $31,200 - $832 = $30,368.

Question 6

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 would lead to a decrease in exports and revenue, which would negatively impact economic growth. The other factors listed would all contribute positively to economic growth.

Question 7

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 8

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 9

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 promote economic development by using existing resources more efficiently and expanding the available resources. This can be achieved through various measures such as investing in education, infrastructure, and technology, implementing policies that encourage entrepreneurship and innovation, and promoting trade and international cooperation. Expanding the government sector, enhancing regulation and taxation, and redistributing income can also play a role in economic development, but these approaches may have limitations and potential trade-offs. Similarly, expanding the money supply and eliminating budget deficits may have short-term benefits, but may also lead to inflation and other macroeconomic challenges in the long run. Therefore, the best path to economic development may vary depending on the specific context and priorities of each country.

Question 10

Low-income developing countries generally have the following characteristics except

Accepted Answer

Low-income developing countries generally have high population growth rates, which can lead to resource scarcity and difficulty in providing basic necessities such as food, housing, and healthcare. The other characteristics listed in options B, C, and D are commonly found in low-income developing countries.

Question 11

One of the essential paths to economic growth is

Accepted Answer

Using existing resources more efficiently is a sustainable way to increase economic growth without depleting natural resources or relying on population growth. This can include investing in technology and innovation to make processes more efficient, reducing waste and pollution, and finding alternative sources of energy. Expanding the role of government or offering tax credits can also stimulate economic growth, but may not necessarily result in sustainable or equitable growth.

Question 12

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

Accepted Answer

Per capita real income is a measure of the average income earned by individuals in a country, adjusted for inflation. It takes into account the number of people living in the country and provides a more accurate picture of the overall standard of living than simply looking at the total GDP or population size. The unemployment rate is also an important measure, but it only focuses on one aspect of the labor market and does not necessarily reflect the overall standard of living.

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 the per capita incomes of developing countries (DVCs) and industrially advanced countries (IACs) grow at the same rate, the absolute income gap would widen because the same percentage increase from a larger base (IACs' income) results in a larger absolute increase compared to that from a smaller base (DVCs' income).

Question 14

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, population growth is often high in these countries, which contributes to the large population and widespread unemployment/underemployment. Low labor productivity is also a common characteristic.

Question 15

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 order for both DVCs and IACs to experience growth, it is imperative that productive resources are used more efficiently. This means maximizing the use of resources, minimizing waste, and improving productivity. By doing so, nations can increase output and revenue, which can lead to economic growth. Ownership and management by the public sector, distribution across business sectors, and reallocation to export industries can also be important factors in economic growth, but efficient use of resources is a fundamental requirement for sustained growth.

Question 16

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 is because sustained economic growth leads to increased productivity, job opportunities, and higher wages, all of which contribute to higher incomes. High rates of population growth, low rates of investment, and low rates of saving, on the other hand, can hinder economic development and lower per capita incomes.

Question 17

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 shift outward the production possibilities curve for a nation. This means that the nation can produce more output using the same resources or produce the same output using fewer resources. Therefore, the nation becomes more productive and efficient.

Question 18

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

Accepted Answer

According to the International Monetary Fund's World Economic Outlook Database from October 2020, the United States had the highest per capita income on a purchasing power parity basis in 2014, with a value of $54,597. China, Japan, and Brazil had per capita incomes of $14,107, $38,434, and $15,634, respectively.

Question 19

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

Accepted Answer

According to World Bank data, per capita income in the United States in 2014 was $54,629, while in China it was $7,590. Therefore, the ratio of per capita income in the US to China is approximately 7.2, which means that per capita income in the US is around 7.2 times greater than in China. The closest answer choice is C, which is 7.5 times, making it the best option.

Question 20

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

The correct calculation for a 2 percent increase in per capita income for both countries is: For the IAC, $28,200 * 1.02 = $28,764. For the DVC, $1,200 * 1.02 = $1,224.

Quiz 19: The Economics of Developing Countries