Download CHPATER 8: TEST BANK

CHAPTER 8: TEST BANK
SOME ANSWERS AND COMMENTS ON THE TEXT DISCUSSION QUESTIONS
1. GNP per capita fails to account for the composition of GNP and the distribution of
income. Better indicators focus on the end results of economic conditions and policy,
such as average life expectancies, infant mortality rates, and literacy rates.
2. Table 7-1 in Chapter 7 indicates that the poorest fifth of the population received 3.7%
and the 2nd poorest fifth of the population received 9.0% of total money income in the
U.S. in 1999. This amounts to 12.7% for the poorest 40% of the population. This
figure compares with numbers in the LDCs cited in Chapter 8 ranging from 8% in
Brazil to 23% in Laos.
3. There is hunger in a world of plenty because unequal income distribution prevents
many poor people and poor countries from purchasing food (there is plenty of food
available on the worldwide basis).
4. Land reform is difficult to achieve, in part because larger landowners tend to be
politically powerful. Some countries have found success by developing new land or
by the government “selling off” its land, and awarding it to landless people or small
landowners. Government confiscation of land without payment is probably most
controversial.
5. These programs can directly improve people’s well-being, while at the same time
improving their productivity and the productivity of the country.
6. Far too many development projects have failed because people, including women,
have not been active participants in the process, including determining whether the
program is desirable in the first place, and how it can best be designed in order to
meet their needs.
7. China is notorious for its one- or two-child policies, with stringent coercion through
economic sanctions and forced contraceptive use and abortions. While this has been
effective, it raises very serious ethical issues and runs contrary to the development
objectives in the text.
8. Efforts to improve conditions in LDC cities may encourage greater rural-urban
migration, creating even worse urban problems. It is important to emphasize
agricultural development and rural amenities along side of urban improvements, in
order to encourage many rural residents to stay in the rural sector.
9. Developed countries can play an important role through development assistance, debt
relief, emergency food relief, fair trade and investment policies, environmental
assistance, among others. Individuals can become involved through individual
charity, letters to legislators, and citizens’ lobby organizations that keep members
aware of legislation and action to reduce poverty.
SUGGESTED TEST QUESTIONS
Multiple-Choice Questions
1. Which of the following is not true? The less developed regions of the world include:
a. Eastern Europe.
b. Latin America.
c. Africa.
d. Asia.
2. GNP per capita is calculated as:
a. GNP minus population.
b. GNP plus population.
c. GNP times population.
d. GNP divided by population.
3. According to the textbook, what country has the lowest GNP per capita?
a. Mexico
b. Brazil
c. Haiti
d. Ethiopia
4. According to the textbook, what country has the highest GNP per capita?
a. Switzerland
b. Japan
c. United States
d. Brazil
5. The average annual growth rate of GDP per capita (i.e. economic growth) is
calculated as:
a. average annual growth of GDP minus average annual population growth.
b. average annual growth of GDP plus average annual population growth.
c. average annual growth of GDP times average annual population growth.
d. average annual growth of GDP divided by average annual population growth.
6. Which of the following countries does not have among the highest average annual
growth rates of GDP in the world?
a. Vietnam
b. China
c. Chile
d. Congo
7. “Growth in GNP per capita over time” is the proper definition for:
a. economic growth.
b. economic development.
c. infrastructure growth.
d. human resource development.
8. The growth rate of GNP per capita:
a. can be positive.
b. can be zero.
c. can be negative.
d. can be all of the above.
9. The composition of GNP refers to:
a. the distribution of income.
b. the distribution of GNP.
c. what GNP consists of.
d. how rapidly GNP increases.
10. The country with the greatest inequality in income distribution is:
a. The United States.
b. Laos.
c. Brazil.
d. Bangladesh.
11. Which of the following is not an element of a proper definition of economic
development?
a. growth in GNP per capita
b. industrialization
c. improvements in standards of living
d. reductions in poverty
12. Sierra Leone has:
a. the world’s lowest life expectancy.
b. the world’s highest infant mortality rates.
c. extremely low standards of living.
d. All of the above.
13. “NICs” refers to:
a. newly incorporated countries.
b. non-income classified countries.
c. newly industrializing countries.
d. non-incorporated countries.
14. Capital intensive technology:
a. utilizes much capital relative to labor.
b. has been part of many industrialization strategies.
c. may not be appropriate for countries with high levels of unemployment.
d. All of the above.
15. The agricultural sector is important in many LDCs because:
a. it is where most of the poor live.
b. it often offers the greatest potential for development.
c. it often offers great potential for employment.
d. All of the above.
16. Price ceilings on food products in LDCs contribute to:
a. shortages of food.
b. reduced incentives for food production.
c. reduced incomes of farmers.
d. all of the above.
17. The situation whereby managers buy up grain in years of high production and sell off
grain in years of low production refers to:
a. export cropping.
b. export management.
c. buffer stocks.
d. land reform.
18. Social overhead capital is the definition of:
a. industry.
b. infrastructure.
c. education.
d. government.
19. Which of the following is not an investment in human capital?
a. education
b. training
c. industry
d. health care
20. Women in LDCs often:
a. have much lower literacy rates than men.
b. are responsible for production of subsistence food crops.
c. lack access to extension services and credit opportunities.
d. All of the above.
21. According to the textbook, what city has the largest population?
a. Tokyo, Japan
b. Mexico City, Mexico
c. New York, U.S.
d. Bombay, India
22. Which of the following is not generally a characteristic of informal sector
employment?
a. low incomes
b. industrial production
c. irregular work hours
d. service work
True-and-False Questions
F
1. The United States has the world’s highest GNP per capita.
F
2. Infant mortality rates show the number of babies who die before age two, per
1,000 live births.
F
3. Brazil has lower life expectancy than China because Brazil is a much poorer
country.
F
4. Costa Rica has a higher life expectancy than Botswana because Costa Rica
has a higher GNP per capita than Botswana.
T
5. South Korea is classified as a newly industrializing country.
T
6. Export cropping refers to a pattern of agricultural production for export.
F
7. Agricultural price ceilings generally create surpluses.
T
8. A major issue for indigenous people in Chiapas is the right to land.
T
9. Investments in human capital improve productivity and standards of living.
T
10. Health and education are investments in human capital.
T
11. Social overhead includes roads and communications.
F
12. The clearing of trees in forested areas is the definition of desertification.
T
13. Desertification may result from deforestation.
T
14. Informal employment consists primarily of service occupations.
T
15. Economic development generally results in lower birthrates.
T
16. Women in LDCs typically have literacy rates below those of men.
T
17. Underemployment includes the situation where people work a limited number
of hours.
F
18. Rural-urban migration is the movement of people from the urban sector to the
rural sector as they search for more peaceful lifestyles.
T
19. Labor-intensive technology utilizes large amounts of labor relative to capital.
T
20. Conservative economists generally favor a growth-oriented strategy for
economic development.
Short-Answer Questions
1. Consider the market for sugar cane in Mexico. Label a price ceiling along the price
axis. Label the new quantity demanded (QD) and quantity supplied (QS) along the
quantity axis. What is the problem that results? ____________
2. Suppose that a small Asian country has 2002 GNP equal to $10 million and 1997 real
GNP equal to $8 million. Calculate the growth rate of real GNP over the five-year
time period.
(25%)
Calculate the average annual growth rate of real GNP
(5%)
.
3. Suppose a Latin American country has an average annual GNP growth rate of 10%,
and an average annual population growth rate of 3%. Calculate the average annual
GNP per capita growth rate
(7%)
.