ECONOMIC PROBLEMS...DEVELOPING COUNTRIES

	The term 'Fourth World' has been coined to describe:    the newly industrialised countries, like Korea, Taiwan, Malaysia.    countries that still have a communist government, like China and Cuba.    the republics of the former Soviet Union.    countries that have fallen far behind the economic advances of the rest of the world.

	Developing countries, if compared with other countries, have:    a lower rate of illiteracy.    a lower infant mortality rate.    a greater degree of equality in the income distribution.    a smaller percentage of the labour force in urban areas.

	85% of the world's population lives in developing countries and receives about _____ of the world's income.    10%    30%    40%    20%

	The developed nations have only about 15% of the world's population, but they are estimated to consume ____of the world's output.    25%    80%    50%    65%

	A policy of developing local industries that can compete with imports is referred to as:    import substitution.    unbalanced growth.    industrial promotion.    export promotion.

	Many developing countries instituted import-substitution policies because:    the prices of the goods they exported were increasing.    their terms of trade were deteriorating.    the prices of the goods they imported were falling.    their terms of trade were improving.

	The idea that suggests that poverty is self-perpetuating because poor nations are unable to save and invest enough to accumulate the capital stock that would help them grow is:    the dependency theory.    the vicious-circle-of-poverty hypothesis.    neo-colonialism.    the under-consumptionist hypothesis.

	Which of the following factors has been suggested as an explanation for the lack of economic growth in many poor nations?    An adequate level of social overhead capital.    The supply of human resources is too high.    The constraints imposed by dependency on the already-developed nations.    A steady rate of capital formation.

	Experience over the last three decades has suggested that in order for economic development to occur, it is necessary for an economy to:    promote industrial development over agriculture.    stress the importation of agricultural products and the export of manufactured goods.    use a balanced strategy that promotes both agricultural and industrial development.    stress agricultural development over industrial development.

	One of the benefits of putting resources into agricultural projects is that:    agricultural investment will prevent the flight of capital abroad.    export prices for agricultural products are more stable than those for industrial products.    successful agricultural projects produce surplus food to support urban development.    agricultural projects usually have very low import requirements.

	Low agricultural productivity in developing countries is mainly caused by:    migration from rural areas to urban areas.    an over-investment in farm equipment.    a lack of effective demand for food products.    shortages of inputs, including land.

	The policy that has been the most successful in increasing agricultural output in developing countries is:    mechanisation.    produce-marketing boards.    land reform.    import substitution.

	The main reason why land reform increases agricultural output is that it: allows the farmers to set the prices for their agricultural products. makes farmers owners of the land instead of tenants and owner farmers are more productive than tenant farmers. encourages mechanisation. enables farmers to escape the problem of diminishing returns.

	Which of the following is NOT one of the problems facing most developing nations?    Food shortages.    Rapid population growth.    Labour shortages.    Foreign debt.

	When economists say that developing countries have a 'dualistic' economy, the 2 parts referred to are:    men and women.    town and country.    modern sector and traditional sector.    rich people and poor people.

	Structuralist economists who study developing countries focus their attention on:    specific barriers to development and how to overcome them.    the impact of international trade structures on developing countries.    changes in industrial structure over time.    the caste or class structure and discrimination in the labour market.

	Most of the Third World/Fourth World debt was incurred in:    the early 1950s.    most debt was incurred during the 'oil-shocks' of the 1970s.    the early 1960s.    the colonial period.

	Debt re-scheduling is:    a change in debt repayment due to inability to pay.    a programme of austerity measures agreed with the IMF to make repayment possible.    an agreement with the World Bank to turn some of a debt into other forms.    regular payments of interest and repayments of capital.

	An agreement between a borrower country and the International Monetary Fund in which the country agrees to revamp its economic policies to provide incentives for higher export earnings and lower imports is a:    debt rescheduling agreement.    program for growth.    stablilisation program.    debt service agreement.

	When economists talk about developing countries experiencing 'flight of capital' they mean:    money moving around financial institutions rather than being invested in production.    people investing their money in urban businesses rather than agriculture.    money lent to the country being immediately invested abroad.    people investing money abroad rather than in their own country.