Learning Objective: 22-05 Describe how industrial nations attempt to aid low-income countries.
Test Bank: I Topic: The Role of AdvancedNations
The World Bank
A. is also known as theInternational Monetary Fund(IMF).
B. lends money to developing nationsfor basic infrastructure projects such as dams,irrigation, health and sanitation,communications, and transportation.
is an affiliateof the World Trade Organization (WTO).
provides subsidies to privatefirms so they can improvetheir wages and working conditions.
Learning Objective: 22-04 Discuss the role of government in promoting economic development within low-income nations.
Test Bank: I Topic: The Role of Government
State industries are notoriously poor "incubators" for the development of profit-focused, entrepreneurial persons who may leave the firmto set up their own businesses. This statement is an argumentin favor of
Learning Objective: 22-04 Discuss the role of government in promotingeconomic development within low-income nations. Learning Objective: 22-05 Describehow industrial nations attempt to aid low-income countries.
Test Bank: I Topic: The Role of Advanced Nations Topic: The Role of Government
Large agricultural subsidies for food and fiber in IACs hurt the economies of the DVCs by
causing higher prices for imported foodproducts.
lowering saving rates in theDVCs.
encouraging "brain drains" from theDVCs.
D. reducing world agricultural prices and thus export income of the DVCs.
Learning Objective: 22-04 Discuss the role of government in promoting economic development within low-income nations. Learning Objective: 22-05 Describehow industrial nations attempt to aid low-income countries.
Test Bank: I Topic: The Role of Advanced Nations Topic:The Role of Government
In recent years, the governments of the IACs have
A. forgiven a portion of the debtowed by some low-income DVCs.
substantially reduced foreign aid to the DVCs.
substantially reduced their contributions to the World Bank.
discouraged skilled DVC workers from emigrating totheIACs.
Learning Objective: 22-04 Discuss the role of government in promoting economic development within low-income nations. Learning Objective: 22-05 Describehow industrial nations attempt to aid low-income countries.
Test Bank: I Topic: The Role of Advanced Nations Topic: The Role of Government
(Last Word) Loans offered through microcredit programs
are usually spent on food.
suffer from low repayment rates.
C. have very high repaymentrates.
D. havelifted borrowers out of poverty at a faster pace than nonrecipients of loans.
Learning Objective: 22-02 List some of the obstaclesto economic development.
Test Bank: I Topic: Obstaclesto Economic Development
(Last Word) Early experiments with unconditional cash transfershave revealed that
most of these cash transfers are repaid within a very short time.
although the money is usuallyspent on education and capital, cultural obstaclesgenerally prevent this spending from translating intolong-term earnings gains.
C. a majority of recipients use the money for trainingand equipment that results in a higher long-term income.
D. most recipients spendthe money on current consumption and realize no long-term gain in earning power.
Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.
Learning Objective: 22-02 List some of the obstaclesto economic development.
Test Bank: I Topic: Obstacles to Economic Development
Topic: The Rich and the Poor
If the real outputs per capita ofa rich nation and a poor nation grow at thesame percentage rate, the absoluteincome gap between the two nations will shrink.
Learning Objective: 22-02 List some of the obstaclesto economic development.
Test Bank: I Topic: Obstacles to Economic Development
An advantage of direct foreign investment (comparedtoforeign loans) is that management skill and technological knowledge often accompany such capitalflows.
Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.
Test Bank: II Topic: The Rich and the Poor
If the per capita incomes of DVCs (developing countries) grew at the same annual rate as those ofIACs (industrially advanced countries), then the absolute income gap between rich and poor nations over the years would
Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.
Test Bank: II Topic: The Rich and the Poor
An IAC (industrially advanced country) had a per capita income of $28,200,while a DVC (developing country) had a per capita income of $1,200 in a given year. If both countries experience a per-capita-income growth of 2 percent, then their respective per-capita-income levels one year later will become
A. $33,840 and$1,440. B. $28,764and $1,224. C. $33,840 and $1,224.D. $28,764and $1,440.
Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.
Test Bank: II Topic: The Rich and the Poor
At the beginning of the year,one developing country(DVC) has a real income per capita of $800.Ina developed country (IAC), the real income per capita is $30,000. Both countriesexperience a 4 percent growth rate for the year.At the end of theyear, the absolute income gap betweenthese two countries will have increased from $29,200 to