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EXAMS ECON 201 TEST BANK

efer to the table. Which of the following might reduce the per capita incomegap between countries A and E?


faster population growth in country A than in countryE

greater investment relative to GDP in countryE than in countryA

C. morerapid improvement in literacy and education in country A than in country E

D. increased capital flight from country A relative tothat from country E


AACSB: Knowledge Application

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

Type: Table


Which of the following is not inversely related to per capita income?


mortality rates for children under fiveyears of age

adult illiteracy rates

C. per capita energy consumption

D. population growth rates


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

Which of these sets of nations consists of high-income economies?


Brazil, Thailand, and South Africa

China, India, and Russia

C. Canada,Switzerland, and France

D. UnitedStates, South Korea, and Mexico


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Which of these sets of nations consists of low-income developing nations?


A. Brazil,Australia, and South Africa

B. Uganda, Madagascar,andBurkina Faso

Canada, Switzerland, and France

Germany, South Korea, andMexico


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

In 2014, the United States had about percent of the world's population andproduced about percentof the world output. A. 20; 30

B. 3.6; 31

C. 10; 28

D. 4.4; 22


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


In 2014, the GDP of the United States was approximately


A. $8trillion less than the GDPofthe 135 DVCs in that year.

$8 trillion morethan the GDP of the 135 DVCs in that year.

twice the GDP of the 135 DVCs in that year.

the same asthe GDP of 135 DVCs in that year.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Which of the following includes only examples of industrially advanced countries(IACs)?


the United States, Canada, and Mexico

Pakistan, India, and China

Japan, South Korea, and China

D. Germany,Italy, and France


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

To be classified as a low-income developing country,annual per capita income in 2014 needed to be


A. $1,045 or less.

$628 or less.

$2,018 or less.

$925 or less.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Examples of low-income developing countries are


Switzerland, New Zealand, and Australia.

Germany, Austria, and Italy.

C. Chad,Bangladesh, and Ethiopia.

D. Mexico,South Korea, and Brazil.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


The very poorest low-income DVCs typically have relatively


A. low rates of economic growth and relatively high rates of population growth.

high rates of economic growth and relatively low rates of population growth.

low rates of both population growth and economic growth.

high rates of both population growth and economic growth.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


If two nations have differentper capita income levels andtheir rates of economic growth are identical, then the absolute per capita income differential


will remain constant.

may either widen or diminish.

will diminish.

D. will widen.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Most of the world's population lives in


A. North America.

B. the DVCs.

Western Europe.

the IACs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

Which of the following does not correlate positively with economic growth?


output per capita

life expectancy

C. thepercentage of thepopulation engaged in agriculture

D. the literacy rate


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


The exports of the DVCs consist largely of


A. high-technology goods.

B. raw materials and farm products.

manufactured goods.

services and financial capital.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


The DVCs are


located primarily in Northern Europe.

located primarily in Western Europe.

C. located primarily in Africa, Asia, and Latin America.

D. moreorless evenly distributed over the various continents.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


The absolute income gap between the IACs and theDVCs has


A. remained constant over time.

B. increased over time.

decreased over time.

increased in nominal terms but decreased inreal terms.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Assume a DVC has a real per capita output of $1,000 as compared to $20,000 for an IAC. If both nations realize a 4 percent growth of their real per capita outputs, after oneyearthe absolute real per capitaoutput gap will


A. remain unchanged at $19,000.

B. increase by$760.

decrease by $1,000.

increase by $19,760.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

If the real GDP of a DVC increases from $600billion to $630 billion and its population increases from 200 million to 216 million,its real per capita GDP will


A. increase byabout $83.

B. decrease by about $83.

remained unchanged.

decrease by about $19.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


In recent decades,


A. all countries classifiedas DVCs have had little or no economic growth.

B. some nations classified as DVCs have grown rapidly,while others have grown very slowly or not at all.

all countries classified as DVCs have experienced rapid economic growth and rising living standards.

all countries classified as low-income DVCs have haddeclining per capita GDPs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


If population is expanding at the same rate as real output,


real per capita output will increase.

real per capita output will decrease.

C. real per capita output will remainunchanged.

D. living standards will increase.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


If the real output of a DVC increases from $200 billion to $260 billion and its population increases from 100 to 120 million, its real per capita output will have


A. remained unchanged.

B. increased by about $167.

increased by about $55.

decreased by about $20.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor


Suppose that Alpha's real output rose from $400 billionin year 1 to $428 billion in year 2. Its growthrate for this period was


14 percent.

12 percent.

9 percent.

D. 7 percent.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Understand Difficulty: 02 Medium

Learning Objective: 22-01 Describe how the World Bank distinguishes between industrially advancedcountries and developing countries.

Test Bank: I Topic: The Rich and the Poor

Over the next 15 years, out of every10 people added tothe world's population will be bornin developing countries.


6

7

8

D. 9


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Which attitude or custom is the most conducive tolong-term economic growth?


a focus on groupcontentment rather than individual achievement

the belief that there is little orno correlation between an individual's economic actions and her or his economicfortunes

C. thebelief that there is a direct connectionbetween individual efforts (including educational efforts) and economicrewards

D. theuseof the majority of resourcesfor religious structures andceremonies


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Which of the following is typicallynot a problem for low-incomeDVCs?


capital flight

"brain drain"

C. high saving rates that slow aggregate demand growth

D. poor infrastructure


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


Increases in the total real output of many DVCs do not increase thenation's standard of livingbecause


A. diminishing returns may beencountered in increasing total output.

B. population increases may dissipate the increase in real output.

disguised unemployment in agriculture will persist.

surplus farm labor may move from rural areas to industrial areas, causing unemployment.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


At the present time,the largest percentage of the national incomesof the low-income DVCs is used for


A. imports of the finishedproducts of foreign industries.

B. food.

infrastructure.

industrial development.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

The populations of the developing nations are growing


at about 5 percent per year.

at about the same rate as those of the industrially advanced nations.

slower than those of the industrially advanced nations.

D. faster than thoseofthe industrially advancednations.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Underemployment occurs


when workers do not have jobs.

when farm workers become more productive.

C. when workers are working fewer hours than they desire orwhen they areworking less productively than they are capable of.

D. in IACs but not in the DVCs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Rapid population growth can be an obstacle to economicdevelopment


because it can translate a relatively large increase in real output into a small increase in real output percapita.

because more investment will be required to simplymaintain thequantity of capitalgoods per person.

because it may leadtothe overutilization and therefore ecological degradation of farmland.

D. for all of these reasons.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


Population growth remains high in most DVCs


because religious and sociocultural considerations favor largefamilies.

because children may provide economicsecurity for aging parents.

because children provide agricultural labor in rural areas.

D. for all of these reasons.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


The demographic transition view alleges that


the DVCs must first accept the use of birth control techniques to increase their standards of living.

population growth will decline only if mortality rates exceed birth rates.

C. if incomes first rise, population growth will then decline.

D. population growth has no bearingon a nation'sper capita income.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

For DVC per capita incomesto rise, birth rates must first be reduced.Thisstatement describesthe


A. human capital view of population growth.

B. traditional view of population growth.

capricious universe view.

demographic transition view of population growth.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Per capita incomes must first grow for birth rates to decline. This statementdescribes the


human capital view of population growth.

traditional view of population growth.

capricious universe view.

D. demographictransition view of population growth.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


The demographic transition concept suggests that


A. effective birth control is theprimary prerequisite of DVC incomegrowth.

B. income growth must first occur before DVC birth rates will decline.

children are economic assets in the IACs but economic liabilities in the DVCs.

the IACs will have higher birth rates than theDVCs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


The demographic transition view of population growth argues that, on average (and as perceived by parents),the marginal


benefits of extra children are larger in IACs than in DVCs.

costs of extra children are lower in IACs than in DVCs.

C. costs of extra children are larger in IACs than in DVCs.

D. benefits of extra children are the same in DVCs and IACs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


In the DVCs, underemployment frequentlytakes the form of


factory workers who are workinglonger hours than they would prefer.

workers who areemployed inefficiently in small industrywhen they could be highly productiveinagriculture.

C. farmers whose productivity is very low.

D. craft workersand artisans who arereplaced by simplemachinery and equipment.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

Which of the following is characteristic of DVCs?


A. A large percentage of the labor forceis in agriculture.

There are high levels of saving and investment.

They have high labor productivity.

There are high levels of training.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


The "brain drain" problem in the DVCs refers to the fact that the best-educated workers


are concentrated in the public, rather than the private, sector.

are concentrated in the private,rather than the public,sector.

are concentrated in urban, rather than rural, areas.

D. haveemigrated from theDVCs to theIACs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Capital flight from the DVCs may be caused by


a fear of government privatization efforts.

slow domestic inflation.

low rates of domestic taxation.

D. risks of severe fluctuations in exchangerates.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


When economists refer to capital flight, they are speakingof an


A. outflow of financialcapital from a certaincountry.

outflow of real capital from a certaincountry.

outflow of financial and real capital from a certaincountry.

outflow of human capital from a certaincountry.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


Capital flight is a problemto DVCs because it


A. causes the value of aDVC's currency to appreciate.

B. reduces the volume of DVC investment.

reduces the flow of foreign aid from the IACs.

causes inflation in the DVCs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

Capital flight refers to


A. thetendency of large corporations of IACs to build new plants in the DVCs because labor is cheaper.

B. DVC citizens accumulating or investing their savings in the IACs.

the high international mobility of speculative funds caused by variations in exchange rates.

the tendencyof DVCs to overinvest in commercialaircraft.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Most of the DVCs find it difficult to accumulate capital goods because


A. theterms of trade prohibit the inflow of private capital from theadvanced nations.

B. it is very difficult to restrictconsumption and thus to free resourcesfor capital goods production.

domestic monetary policies designed to achieve price stability resultin low interestrates, thereby discouraging investment.

investment is interest inelastic in DVCs.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


All of the following contributeto low investment spendingin DVCs except


low rates of saving.

inadequacy of public capital goods (infrastructure).

political instability.

D. expensivelabor.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


Which of the following is not part of a nation's infrastructure?


communications facilities

roads, highways, and bridges

the electrical power system

D. industrial plants and equipment


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


Infrastructure is best illustrated by


A. farm equipment.

B. school buildings and highways.

machinery and equipment for the production of consumer goods.

government tax revenues.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

Investment in-kind refers tothe possibility that


DVCs will invest for the purpose of becomingless dependent on world markets.

a DVC will overinvest in industries in which it has a comparative advantage,disrupting its development program.

newly established manufacturing firms may expandbyreinvesting their profits.

D. surplus labor in, say, agriculture can be diverted to the production of simple capital goods such as earthen dams.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of


foreign aid.

capital-saving investment.

C. in-kind investment.

D. technological advance.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


If a technological advance expands output and requires a smaller investment in capitalgoods, this technological advance


is capital-using.

must involve nonfinancial investment.

C. is capital-saving.

D. must pertain to the infrastructure.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


The ability of the DVCs to use the technologies of the IACs is somewhatlimited because


A. theIACs have patentson most of their technologies.

B. the IACs and theDVCs have much differentresource endowments.

the technologies of the IACs rely heavilyon unskilled labor.

IAC technologies are labor-intensive, while DVC technologies are capital-intensive.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development


It is sometimes difficult to transfer the advanced technologies of the industrializednations to the DVCs because


A. thetechnologies of the IACs are frequently based on relatively expensive labor and relatively cheap capital.

the resourceendowments of theIACs and the DVCs are highly similar.

international patent laws prohibit such transfers.

the technologies of the IACs are frequently based on relatively cheap labor and relatively expensive capital.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstacles to Economic Development

The low per capita outputs of the DVCs are explained by


A. insufficient saving andinvestment.

overinvestment in human capital.

slow population growth.

excessively rapidtechnological advance.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


An economy's infrastructure refers to its


A. public capital goods, such as roads, schools,andpower facilities.

financial and banking institutions.

land and natural resources.

surplus supplies of unskilled labor.


AACSB: Knowledge Application Accessibility: Keyboard Navigation

Blooms: Remember Difficulty: 01 Easy

Learning Objective: 22-02 List some of the obstaclesto economic development.

Test Bank: I Topic: Obstaclesto Economic Development


The "brain drain" problem in the DVCs refers to the fact the best-educated workers


are reluctant to become entrepreneurs.