978-1259723223 Test Bank TBChap042 Part 5

of its GDP to foreign aid or development assistance to DVCs (developing countries) in

2015?

209. Which of the following IACs (industrially advanced countries) gave the largest share

of its GDP to foreign aid or development assistance to DVCs (developing countries) in

2015?

210. Making “soft loans”—loans that may not be self-liquidating—to the very poorest of

the developing countries on relatively liberal terms is the primary function of the

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Di f f i c ult y :

02 Medium

Learning Objective: 42-05 Describe how industrial nations attempt to aid low-income countries.

Test Bank: II

Topic:

The Role of Advanced Nations

211. The basic role of the International Finance Corporation is to

212. A major criticism of foreign aid to developing nations is that it

213. A major criticism of foreign aid to developing nations is that it

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214. Which of the following would be an example of direct foreign investment in DVCs?

215. A major complaint of DVCs about foreign aid from IACs is that it

216. A recommended policy for DVCs to implement that promotes economic growth is

217. Which of the following is a recommended policy for industrially advanced countries

to adopt in order to foster economic growth in DVCs?

218. Which of the following is considered to be a severe obstacle to economic growth for

DVCs?

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written consent of McGraw-Hill Education.

Learning Objective: 42-05 Describe how industrial nations attempt to aid low-income

countries.

Test Bank: II

Topic:

The Role of Advanced Nations

219. A recommended policy for developing countries to stimulate economic growth would

be

220. To stimulate economic growth, it would be best if developing countries adopted

policies to

221. One way through which industrially advanced economies can help DVCs is known as

“official development assistance (ODA),” or more simply,

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C.

foreign aid.

D. international trade.

222. One suggested policy that industrially advanced nations could adopt to foster

economic growth in less-developed nations would be to

223. The international organization, with 188 member nations, whose major objective is to

help DVCs achieve economic growth is the

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Topic:

The Role of Advanced Nations

224. A suggested policy for industrially advanced countries to adopt to encourage

economic growth in developing countries would be

225. Trade barriers that restrict imports from developing countries tend to be

226. What is the immigration problem for DVCs?

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favor the movement of the least productive DVC workers.

227. In contrast to international development efforts in most of the 20th century, more

recent projects like microfinance, microcredit, and cash transfers in the last few decades

represent a major shift. That is because these recent projects are

228. Recent efforts at providing direct cash transfers to poor individuals in DVCs have

shown which of the following results?

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Learning Objective: 42-04 Discuss the role of government in promoting economic development

within low-income nations.

Test Bank: II

Topic:

The Role of Government

True / False Questions

229. The richest 20 percent of the world’s population receives more than 75 percent of the

world‘s income, while the poorest 20 percent receives less than 2 percent of the world’s

income.

230. In 2014, the IACs (industrially advanced countries) had an average per capita income

that was about 60 times as high as that of the low-income nations.

231. Japan is a nation that achieved a high standard of living despite having a very limited

supply of natural resources.

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Di f fi c u l ty :

02 Medium

Learning Objective: 42–01 Describe how the World Bank distinguishes between industrially

advanced countries and developing countries.

Test Bank: II

Topic:

The Rich and the Poor

232. China is close to catching up with the United States in its standard of living as

measured by per capita income.

233. The gap in the standards of living between the IACs (like the U.S., countries of

Western Europe, and Japan) and the DVCs of Africa, Latin America, and Asia have been

narrowing significantly over the decades.

234. The presence of large and fast-growing populations in developing countries

contributes to lower per capita incomes.

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Test Bank: II

Topic:

Obstacles to Economic Development

235. The demographic transition view of population growth believes that slower

population growth will lead to rising incomes.

236. Without an abundant endowment of natural resources, a nation cannot achieve rapid

economic growth.

237. Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving

is put to poor use.

238. Capital flight from DVCs (developing countries) tends to offset much of the foreign

loans and aid that they receive from IACs (industrially advanced countries).

239. When technological advances are of the capital-using kind, it is possible for an

economy to increase its productivity without any net investment in capital goods.

240. The building of a new factory by a corporation would be an example of increasing the

infrastructure in a developing nation.

241. Developing nations tend to have a large entrepreneurial class but not sufficient capital

investment.

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Blooms: Remember

Di ffi c ul t y:

01 Easy

Learning Objective: 42-02 List some of the obstacles to economic development.

Test Bank: II

Topic:

Obstacles to Economic Development

242. Land reform (or the reform of land ownership) is a relatively minor institutional

obstacle to economic growth in many developing countries.

243. The vicious circle of poverty is based on the connections between low income, low

saving, low investment, and low productivity.

244. The vicious circle of poverty implies that there is no way to break the circle; the poor

nations will always remain poor.

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245. The creation of an adequate infrastructure in a nation is primarily the responsibility of

the public sector.

246. The corruption and poor administration that are common to the public sectors of many

DVCs suggest that government may not be very effective in promoting economic growth.

247. The industrially advanced nations can assist developing nations by reducing trade

barriers and by providing both private and public capital.

248. An example of direct foreign investment would be the building of a motorcycle

factory in China by Honda Motors.

249. In recent years, a greater proportion of private capital flows to DVCs has been direct

foreign investment rather than loans to DVC governments.

250. The World Bank is the organization to which DVCs turn as a “last-resort” lending

agency for projects that private institutions will not fund.

251. One reason why foreign aid is viewed as harmful is that it promotes dependency.

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Ac c e s s i b i l i t y :

Keyboard Navigation

Blooms: Understand

Di f fi c u l ty :

02 Medium

Learning Objective: 42-05 Describe how industrial nations attempt to aid low-income

countries.

Test Bank: II

Topic:

The Role of Advanced Nations

252. One policy recommended by most economists for promoting economic growth in

DVCs is the nationalization and protection of domestic industries.

253. One recommended policy that IACs could adopt to help DVCs is to recruit and hire

skilled workers from DVCs for businesses in IACs.

254. One effective way that IACs can help DVCs is to lower trade barriers on products

produced by DVCs.

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written consent of McGraw-Hill Education.

Learning Objective: 42-05 Describe how industrial nations attempt to aid low-income

countries.

Test Bank: II

Topic:

The Role of Advanced Nations