Problem 1
True or False: The term developing country (DVC) is applied to rich nations like the United States and Germany because their economies are always growing quickly by developing new technologies.
Problem 2
True or False: A DVC that has little in the way of natural resources is destined to remain poor.
Problem 3
Suppose a country's total output is growing 10 percent per year, but its population is growing 11 percent per year. What will happen to living standards? a. Rise. b. Fall. c. Remain the same.
Problem 4
A DVC's population is growing 2 percent per year and output is growing 3 percent per year. If the government wants to improve living standards over coming decades, which of the following would probably be the best savings rate for the economy? a. 0 percent. b. 2 percent. c. 5 percent. d. 10 percent.
Problem 5
Compare a hypothetical DVC with a hypothetical IAC. In the DVC, average per capita income is \(\$ 500\) per year. In the IAC, average per capita income is \(\$ 40,000\) per year. If both countries have a savings rate of 10 percent per year, the amount of savings per capita in the DVC will be _____ per person per year, while in the IAC it will be _____ per person per year. a. \(\$ 50 ; \$ 4,000\) b. \(\$ 5 ; \$ 400\) c. \(\$ 450 ; \$ 36,000\) d. None of the above.
Problem 6
Which of the following policies would economists consider to be actions that a DVC government might take that would improve growth prospects? Choose one or more answers from the choices shown. a. Helping to extend the banking system to the rural poor. b. Passing high tariffs against foreign products. c. Constructing better ports, roads, and Internet networks. d. Charging high fees for public elementary schools.
Problem 7
True or False: Economists are unanimous that foreign aid greatly helps DVCs.
Problem 8
True or False: Some economists argue that the single best thing that IACs could do for DVCs in terms of economic growth would be to eliminate trade barriers between IACs and DVCs.
