Chapter 23 Which The Following Not Example Microfinance

81. Which of the following is not an example of microfinance?

82. Which of the following is not an example of microfinance?

A. A loan to a restaurant owner for an indoor grill.

83. In the poorest nations, agriculture is likely to contribute as much as ______ percent to total output.

84. Which of the following does not contribute to low farm productivity in poor nations?

85. In order for poor nations to grow out of Stage 1, farm productivity must rise beyond subsistence levels so that

workers can

86. Output per unit of input measures

A. Productivity.

87. Output per labor-hour is used to measure the ________ of labor.

88. Which of the following contributes to an institutional structure that promotes economic growth?

A. Comparative advantage.

89. Which of the following does not contribute to an institutional structure that promotes economic growth?

A. Policy uncertainty.

90. Which of the following does not contribute to a pro-business climate for investors?

A. Secure property rights.

91. In general, countries with well-defined property rights, less government regulation, and lower taxes have

92. Which of the following statements is true concerning comparative advantage?

A. Poor nations typically have a comparative advantage in high-tech but not agricultural goods.

93. The ability of a country to produce a specific good at a lower opportunity cost than its trading partners is

known as

94. Poor nations typically have a competitive advantage in agricultural goods because of

A. Entrepreneurial incentives.

95. A limit on the quantity of a good that may be imported in a given time period is

A. An import quota.

96. Import quotas have a negative impact on poor nations because they make it difficult for poor nations

97. Women in poor countries are more likely to experience all of the following except

A. Restricted property rights.

98. According to Hernando de Soto, poor countries should focus their development policies on all of the following

except

A. Reducing bureaucratic barriers.

99. Which of the following is not part of Hernando de Soto’s The Other Path?

100. De Soto’s The Other Path encourages poor countries to use their development policies to do all of the

following except

101. In his book The Other Path, de Soto suggests that the key to economic development is

A. Entrepreneurship and market forces.

102. A World View article, “Glaring Inequalities,” says that income inequality tends to diminish as a nation develops.

The distribution of income answers the ________ question.

103. One World View article is titled “Glaring Inequalities.” Of the countries listed, the greatest inequality in the

distribution of income is likely to occur in

A. Namibia.

104. One World View article is titled “Glaring Inequalities.” Of the countries listed, the least inequality in the

distribution of income is likely to occur in

A. United States.

105. A World View article, “The Female ‘Inequality Trap,'” says that in many poor nations the “… returns on female

human capital investment is low.” When women are not allowed to work outside the home or to receive an

education, this is referred to as

106. One World View article in the text is titled “Dying for a Drink of Clean Water.” By 2015 the U.N.’s Millennium

water goal expects to reduce the percentage of people in the world without safe drinking water by

107. According to Bill Gates, from the World View article titled “The Way We Give: Philanthropy Can Step In Where

Market Forces Don’t,” more than 90 percent of the money devoted to health research is spent on those who

108. According to the World View article titled “The Way We Give: Philanthropy Can Step In Where Market

Forces Don’t,” in which of the following ways does philanthropy not improve the market outcome?

109. According to the World View titled “Muhammad Yunus: Microloans,” who won the Nobel Peace Prize for

developing microcredit?

110. According to the World View titled “Jeffrey Sachs: Big Money, Big Plans,” how does Columbia University

economics professor Jeffrey Sachs expect global poverty rates to be reduced by half by 2015?

A Rich nations must double their foreign aid flows now and then double them again in 10 years, while poor

111. The official U.S. poverty standard was set in 1963 at $3,000 per year for a family of four.

112. The U.S. inflation adjusted poverty threshold in 2014 was set at $35,000 per year for a family of four.

113. According to the official U.S. threshold, 35 percent of Americans live in poverty.

114. The U.S. government counts both cash income and in-kind transfers when determining the poverty rate.

115. In-kind transfers include housing subsidies and food stamps.

116. If the U.S. government considers the value of in-kind transfers, the U.S. poverty rate decreases.

117. American poverty is more about absolute deprivation, and poverty in the rest of the world is more about relative

deprivation.

118. The World Bank defines extreme poverty as income of less than $1.25 per day per person.

119. According to the World Bank definitions, there are more people in the world living in extreme poverty than there

are living in severe poverty.

FALSE

120. According to the World Bank, almost 2.5 billion people are classified as being in severe poverty.

121. Over half of the people in the world who live in extreme poverty live in China and India combined.

122. Poverty is considered to be more permanent in the United States than it is in other nations.

123. The U.N. has established a Millennium Poverty Goal of cutting in half by 2015 the number of people in extreme

global poverty.

FALSE

124. The U.N.’s Millennium Poverty Goal is to reduce the global rate of extreme poverty to 15 percent by 2015, but

125. The two general approaches to reducing global poverty include the redistribution of incomes and

economic growth.

126. The redistribution of private income and wealth within poor nations is sufficient to eliminate global poverty.

127. The U.N.’s Millennium Aid Goal is for nations to increase their foreign aid levels to 0.7 percent of donor country

GDP.

TRUE

128. Currently most developed countries meet or exceed the U.N.’s Millennium Aid Goal for donor country GDP.

129. Denmark and Norway are two countries that currently exceed the U.N.’s Millennium Aid Goal for

donor country’s contribution of GDP.

130. If all developed countries were willing to meet the U.N.’s Millennium Aid Goal for foreign aid, this

would eliminate global poverty.

FALSE

131. Economic growth is the key to ending global poverty.

132. Because poverty is so pervasive, poor countries are not able to experience economic growth.

133. The standard of living for poor countries will not increase if the population growth exceeds economic growth.

134. If women are not allowed to own property or inherit wealth but men are, this is an example of

comparative advantage.

135. An inequality trap has a negative impact on human capital development.

136. Lack of access to sanitation and inadequate medical care have a negative impact on the development of

human capital.

TRUE

137. According to Rostow’s stages of economic development, in order to move beyond Stage 1, a poor country

must improve education and health care for the masses.

TRUE

138. Providing basic health care and education for poor countries is cost-prohibitive.

139. By reducing consumption expenditures, poor nations should be able to completely finance their own capital

investment.

FALSE

140. According to Rostow’s stages of economic development, poor nations must increase their farm productivity so

that some workers can leave farming and move into other industries.

141. For poor countries, a lack of capital and poorly developed infrastructure contribute to low farm productivity.

142. Well-established property rights and a pro-business climate are a step in the right direction, but ultimately they

do little to encourage economic growth.

143. Free trade with other countries allows poor nations the opportunity to exploit their comparative advantage

in agricultural goods.

144. In his book The Other Path, de Soto suggests that countries will grow more quickly if governments

limit entrepreneurship.

FALSE

145. In his book The Other Path, de Soto suggests that countries will grow more quickly if bureaucratic barriers to

free enterprise are reduced.

TRUE

146. Developing infrastructure and ensuring that property rights will be protected can help a poor country grow

more quickly according to de Soto’s book The Other Path.

147. The developing world has been adamant that rich nations abandon farm subsidies in order to get a global trade

deal both sides say they want.

TRUE

149. Explain the difference between poverty in the United States and poverty in the rest of the world.

149. What is the U.N.’s goal for foreign aid to poor countries? Are most countries currently meeting this

goal? Explain.

150. How do population growth and economic growth impact global poverty?

151. What is human capital, and what factors contribute to human capital development?

152. What is microfinance, and how can it contribute to economic growth?

Chapter 23 Test Bank Summary