Chapter 22W – The Economics of Developing Countries
97. The basic role of the International Finance Corporation is to:
98. A major criticism of foreign aid to developing nations is that it:
99. A major criticism of foreign aid to developing nations is that it:
Chapter 22W – The Economics of Developing Countries
100. Which would be an example of direct foreign investment in DVCs?
101. A major complaint of DVCs about foreign aid from IACs is that it:
102. A suggested policy for DVCs to implement that promotes economic growth is:
Chapter 22W – The Economics of Developing Countries
103. Which is a suggested policy for industrially advanced countries to adopt to foster
economic growth in DVCs?
104. Which is considered to be a severe obstacle to economic growth for DVCs?
105. A suggested policy for developing countries to stimulate economic growth would be:
Chapter 22W – The Economics of Developing Countries
106. To stimulate economic growth, it would be best if developing countries adopted policies
to:
107. One suggested policy that industrially advanced nations could adopt to foster economic
growth in less developed nations would be to:
108. A suggested policy for industrially advanced countries to adopt to encourage economic
growth in developing countries would be:
Chapter 22W – The Economics of Developing Countries
109. Trade barriers that restrict imports from developing countries tend to be:
110. What is the immigration problem for DVCs?
111. Which of the following is considered to be one of the more ill-advised public policies
that has contributed to Africa’s famine?
Chapter 22W – The Economics of Developing Countries
112. Which of the following is considered a factor contributing to famine in Africa?
113. The richest 20% of the world’s population receives more than 80% of the world’s income
while the poorest 20% receives less than 2% of the world’s income.
114. Low-income nations had an average per capita income of $925 or less in 2008.
Chapter 22W – The Economics of Developing Countries
115. Japan is an example of a nation that achieved a high standard of living with a small
supply of natural resources.
116. The presence of large and fast-growing populations in developing countries contributes
to lower per capita incomes.
117. The demographic transition view of population growth believes that slower population
growth will lead to rising incomes.
118. Most DVCs suffer from unemployment and underemployment.
Chapter 22W – The Economics of Developing Countries
119. Without an abundant endowment of natural resources, a nation cannot achieve rapid
economic growth.
120. Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is
put to poor use.
121. When technological advances are capital-using, it is possible for an economy to increase
its productivity without any net investment in capital goods.
122. The term “infrastructure” refers to the amount of production and office space available in
DVC cities.
Chapter 22W – The Economics of Developing Countries
123. Land reform is a relatively minor institutional obstacle to economic growth in many
developing countries.
124. The building of a new factory by a corporation would be an example of increasing the
infrastructure in a developing nation.
125. The creation of an adequate infrastructure in a nation is primarily the responsibility of
the public sector.
126. Developing nations tend to have a large entrepreneurial class but not sufficient capital
investment.
Chapter 22W – The Economics of Developing Countries
127. The vicious circle of poverty is based on the connections between income, saving,
investment, and productivity.
128. The vicious circle of poverty implies that there is no way to break the circle; the poor
nations will always remain poor.
129. 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.
130. The industrially advanced nations can assist developing nations by reducing trade
barriers and by providing both private and public capital.
Chapter 22W – The Economics of Developing Countries
131. The World Bank is the organization to which DVCs turn as a “last-resort” lending
agency for projects private institutions will not fund.
132. One reason why foreign aid is viewed as harmful is that it promotes dependency.
133. An example of direct foreign investment would be the building of a motorcycle factory
in China by Honda Motors.
134. In recent years, a greater proportion of private capital flows to DVCs has been direct
foreign investment rather than loans to DVC governments.
Chapter 22W – The Economics of Developing Countries
135. One policy recommended by most economists for promoting economic growth in DVCs
is the nationalization and protection of domestic industries.
136. One suggested policy that IACs could adopt to help DVCs would be to recruit and hire
skilled workers from DVCs for businesses in IACs.
137. One effective way that IACs can help DVCs is to lower trade barriers on products
produced by DVCs.