Question 1

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

Accepted Answer

Economists generally suggest reducing trade barriers and increasing the amount of private and public capital as the best way for advanced nations to assist in the economic development of developing nations. This can help improve the flow of goods and services between countries and encourage investments that can create jobs and increase economic growth. Military aid and decreasing private capital or foreign aid can often have negative consequences such as the perpetuation of conflict or the reduction of support for development initiatives. Increasing trade barriers can also limit the potential benefits of economic interdependence and cooperation between nations.

Question 2

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

Accepted Answer

According to the Corruption Perception Index 2015 by Transparency International, Russia had the worst score among the given countries with a score of 29 out of 100. Italy scored 44, China scored 37, and Mexico scored 35.

Question 3

Microfinance or microcredit can help directly support

Accepted Answer

Microfinance is a financial service that provides low-income individuals with access to small loans and other financial services to help them start or expand a business. These small loans are usually provided to individuals who do not have access to traditional banking. Therefore, microfinance or microcredit can help directly support entrepreneurs.

Question 4

Most of the flow of foreign aid goes to

Accepted Answer

Most of the flow of foreign aid does not necessarily target the poorest populations or countries. Instead, it often benefits the more affluent segments within developing countries, due to factors such as political interests, strategic alliances, and the capacity of those segments to utilize the aid effectively.

Question 5

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 can lead to increased competition for DVCs, making it more difficult for them to enter and succeed in the global market. Therefore, it is not a way to help them achieve faster economic growth. A, B, and D are all ways that IACs can help DVCs achieve faster economic growth, such as by providing more opportunities for trade, allowing more temporary workers to come into the country, and decreasing military spending and arms sales in the region.

Question 6

The World Bank operates primarily as a

Accepted Answer

The World Bank primarily operates as a lender of last resort to less-developed nations. It provides financial assistance, usually in the form of loans, to help these countries with their economic development projects. This is commonly known as development financing. While the World Bank is not a deposit institution for nations' gold supplies and does not coordinate private banks, it is an international organization and not a U.S. government agency.

Question 7

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

Accepted Answer

According to the Corruption Perception Index in 2015, Canada had the highest score of 83 out of 100, indicating low levels of corruption. Japan had a score of 75, the United States had a score of 76, and China had a score of 37, all indicating higher levels of perceived corruption compared to Canada.

Question 8

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

Accepted Answer

Poor administration and corruption in government have hindered the effectiveness of government efforts to foster economic growth in DVCs. This has led to inefficiencies, misallocation of resources, and distorted incentives that undermine economic development. While some governments may be supportive of business at the expense of labor or use forced savings to stimulate investment, these issues are not as pervasive as poor administration and corruption.

Question 9

The World Bank seeks to

Accepted Answer

The World Bank's primary goal is to help developing countries achieve sustainable economic growth and reduce poverty through loans, technical assistance and other resources.

Question 10

Which of the following IACs (industrially advanced countries) was the leading provider of development assistance to DVCs (developing countries) in 2015, in terms of absolute dollar amounts?

Accepted Answer

According to the Organization for Economic Cooperation and Development (OECD) data, in 2015, the United States was the leading provider of development assistance to developing countries, with a total of $31.1 billion, followed by the United Kingdom, Japan, Germany, and France. Therefore, option A is the correct answer.

Question 11

One of the major objectives of the World Bank is to

Accepted Answer

The World Bank's main objective is to provide technical assistance to Developing and Less Developed Countries (DVCs). This assistance comes in various forms such as providing loans, grants and technical support to help these countries develop their economies and reduce poverty. Providing financial backing to the United Nations or maximizing profits for shareholders is not the primary focus of the World Bank. While maintaining stable exchange rates is important, it is not the primary objective of the World Bank.

Question 12

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

Accepted Answer

One of the main purposes of the World Bank is to provide funding for infrastructure projects in developing nations, such as building roads, bridges, and power plants. These projects are intended to help promote economic growth and reduce poverty.

Question 13

Microcredit refers to

Accepted Answer

Microcredit is a system of providing credit to small-business owners, particularly in developing countries, who may not have access to traditional banking services. It involves small loans that are repaid in installments, usually at higher interest rates than traditional loans, but with more flexible terms.

Question 14

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 primarily makes and guarantees loans to developing nations for basic development projects such as the construction of dams, roads, and schools. The New Economic Order is a set of proposals put forth by developing nations in the 1970s, the Federal Reserve System is the central banking system of the United States, and the Committee on Economic Development is a non-profit, non-partisan American organization focused on promoting sustainable economic growth.

Question 15

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 16

Industrially advanced countries can best help DVCs by

Accepted Answer

Adopting policies that expand trade with DVCs is the best way for industrially advanced countries to help DVCs. This can create economic opportunities and increase employment in these countries, which can lead to improved living standards and greater economic security. Additionally, increased trade can help DVCs develop their own economies and become more self-sufficient in the long term. The other options do not address the root causes of poverty and underdevelopment in DVCs in the same way.

Question 17

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

Government may play a key role in the early stage of economic development in developing nations by providing infrastructure, encouraging saving and investment, and providing law and order. However, entrepreneurs should not be regulated but encouraged as they are the driving force behind economic growth and development.

Question 18

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 become less enthusiastic about the positive role of DVC governments due to corruption in government, which has hindered economic growth in less developed countries.

Question 19

In recent years, many DVCs have come to realize that

Accepted Answer

Many DVCs have realized the importance of private capital investment for their economic growth. Government involvement alone may not be enough to spur development, and many DVCs need foreign investment to build new infrastructure, create jobs, and expand their economies. Additionally, private investment can bring in expertise and technology that may be lacking in the DVC.

Question 20

Industrially advanced countries can best help developing countries by

Accepted Answer

Increasing the flows of private capital to DVCs allows for more investment in their economies, which can lead to employment opportunities, infrastructure development, and overall economic growth. This can ultimately help these developing countries become more self-sufficient and less dependent on aid or support from other countries. Options A and B could potentially harm the economies of DVCs by not allowing them to compete fairly in the global market, while option D may lead to exploitation and loss of control over their own resources and capital.

Quiz 42: The Economics of Developing Countries