Question 1

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 2

Because families can afford to have more children,population growth is greater in the IACs than in the DVCs.

Accepted Answer

Population growth is generally higher in developing countries (DVCs) due to factors such as higher fertility rates and younger populations, whereas industrialized advanced countries (IACs) tend to have lower population growth rates due to factors like lower fertility rates and aging populations.

Question 3

The most important growth obstacle common to all DVCs is the lack of desire to increase their standards of living.

Accepted Answer

The most important growth obstacle common to all DVCs is not the lack of desire to increase their standards of living, but rather a combination of factors such as poor infrastructure, lack of access to credit, limited technology, inadequate education and training, political instability, corruption, and other institutional constraints.

Question 4

The differences in the per capita incomes of the IACs and the DVCs have diminished sharply since the Second World War because of U.S.aid programs.

Accepted Answer

The statement is false. The differences in per capita incomes between the IACs (industrially advanced countries) and the DVCs (developing countries) have actually widened since the Second World War, despite U.S. aid programs.

Question 5

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 6

Famines in sub-Saharan Africa:

Accepted Answer

Famines in sub-Saharan Africa are the result of a combination of factors including drought, civil strife, large populations, and inappropriate public policies. While weather conditions such as drought may play a role, they alone are not the sole cause of famines. Moreover, famines have not become less common in recent decades, but have remained a persistent problem in some areas of sub-Saharan Africa. Government policies that overprice agricultural products could contribute to food scarcity, but this is not the sole cause of famines.

Question 7

Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.

Accepted Answer

Capital flight refers to the rapid outflow of capital from a country, often due to economic instability or the expectation of political turmoil, rather than the use of export earnings to pay interest on external debts.

Question 8

If the real outputs per capita of a rich nation and a poor nation grow at the same percentage rate,the absolute income gap between the two nations will shrink.

Accepted Answer

While the percentage rate of growth may be the same, the starting point of the rich nation is likely much higher than that of the poor nation. Therefore, the absolute income gap may still widen or remain the same despite both nations experiencing growth.

Question 9

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 low-income DVCs as a way to alleviate their economic struggles. Option B, reducing foreign aid, would have the opposite effect and exacerbate the problem. Option C, reducing contributions to the World Bank, would also not address the issue of assisting DVCs. Option D, discouraging skilled DVC workers from emigrating, is not a common policy among IACs and would not necessarily address the economic struggles of DVCs. Hence, option A is the best choice.

Question 10

DVCs tend to have permanent shortages of farm labor.

Accepted Answer

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

Question 11

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

Privatizing state industries would introduce market competition and reward entrepreneurship, creating a more desirable environment for individuals to develop their skills and potentially launch their own businesses. Central planning, free immigration and emigration, and free trade may have different impacts on this issue, but the best choice is privatization in this context.

Question 12

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 DVC economic growth as it limits opportunities for foreign businesses to invest in local industries, create jobs, and contribute to the country's overall economy. Privatizing state industries, controlling population growth, and building human capital are all policies that have been shown to facilitate economic growth in developing countries.

Question 13

Saving is low in many DVCs primarily because income is very equally distributed.

Accepted Answer

The low savings rate in many DVCs is attributable to a variety of factors, including limited access to financial services, low levels of financial literacy, high levels of debt, and other structural issues. While income inequality can be a factor in some cases, it is not the primary cause of low savings rates.

Question 14

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

Accepted Answer

Encouraging emigration of highly skilled workers is not likely to increase DVC economic growth as it can result in a brain drain and loss of talent within the country. The other options, such as encouraging direct foreign investment, opening up to world trade, and establishing independent central banks, can all contribute to increased economic growth in the DVC.

Question 15

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

Accepted Answer

Large agricultural subsidies in IACs lead to oversupply and low prices for their agricultural products, which reduces world agricultural prices and hurts the export income of DVCs who rely heavily on agricultural exports. This further perpetuates poverty and inequality in these countries.

Question 16

Economic growth in the DVCs might increase if IACs:

Accepted Answer

By reducing tariffs and import quotas, IACs would increase importation of goods and services from DVCs, thus boosting their economic growth through increased exports.

Question 17

The capricious universe view is the idea that the IACs are exploiting the DVCs.

Accepted Answer

The capricious universe view is not directly related to the exploitation of DVCs by IACs. It is a belief that the universe operates randomly and unpredictably, without any inherent meaning or purpose.

Question 18

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

Accepted Answer

This statement is true, as agriculture is typically the primary economic activity in many low-income developing countries (DVCs).

Question 19

In many of the sub-Saharan African nations:

Accepted Answer

All three choices have been observed in many sub-Saharan African nations. The population is growing rapidly, putting pressure on food production and natural resources. This has resulted in deforestation and soil degradation. Moreover, governments have often prioritized investments in industries and security sectors over agriculture, which has further aggravated the situation.

Question 20

Which of the following is a true statement?

Accepted Answer

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

Quiz 41: The Economics of Developing Countries