economic problems of developing countries Mcqs
1. Which of the following is NOT one of the problems facing most developing nations ?
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A. Food shortages

B. Foreign debt

C. Rapid population growth

D. Labor shortages
2. The main reason why land reform increase agricultural output is that is ?
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A. makes farmers owners of the land instead of tenants and owners farmers are more productive than tenant farmers

B. allows the farmers to set the prices for their agricultural products

C. encourages mechanization

D. enables farmers to escape the problem of diminishing return

3. 85% of the worlds population lives in developing countries and receives about _____ of the worlds income?
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A. 20%

B. 10%

C. 40%

D. 30%

4. When economists talk about developing countries experiencing flight of capital they mean?
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A. people investing money abroad rather than in their own country

B. money lent to the country being immediately invested abroad

C. People investing their money in urban business rather than agriculture

D. money moving around financial institutions rather than being invested in production

5. When economists say that developing countries have a dualistic economy the 2 parts referred to are ?
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A. men and women

B. town and country

C. rich people and poor people

D. modern sector and traditional sector
6. 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 ?
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A. neo-colonialism

B. the under-consumptionist hypothesis

C. the dependency theory

D. the vicious circle of poverty hypothesis
7. One of the benefits of putting resources into agricultural projects is that ?
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A. agricultural projects usually have low import requirements

B. agricultural investment will prevent the flight of capital abroad

C. export prices for agricultural products are more stable than those for industrial products

D. Successful agricultural projects produce surplus food to support urban development

8. The developed nations have only about 15% of the worlds population, but they are estimated to consume _______ of the worlds output ?
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A. 80%

B. 50%

C. 65%

D. 25%

9. Most of the Third World/Fourth World debt was incurred in ?
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A. the early 1960s

B. The colonial period

C. most debt was incurred during the oil shocks of the 1970s

D. The early 1950s

10. 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 ?
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A. program for growth

B. debt rescheduling agreement

C. stabilization program

D. debt service agreement

11. Structuralist economists who study developing countries focus their attention on ?
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A. changes in industrial structure over time

B. the caste of class structure and discrimination in the labor market

C. specific barriers to development and how to overcome them

D. The impact of international trade structures on developing countries

12. A policy of developing local industries that can compete with imports is referred to as ?
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A. export promotion

B. industrial promotion

C. unbalanced growth

D. import substitution
13. Many developing countries instituted import substitution policies because ?
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A. their terms of trade were deteriorating

B. their terms of trade were improving

C. the price of goods they exported were increasing

D. the prices of the goods they imported were falling

14. Which of the following factors has been suggest as an explanation for the lack of economic growth in many poor nations ?
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A. An adequate level of social overhead capital

B. The supply of human resources is too high

C. The constraints imposed by dependency on the already-developed nations

D. A steady rate of capital formation

15. Developing countries, if compared with other countries, have ?
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A. a greater degree of equality in the income distribution

B. a lower rate of illiteracy

C. a lower infant mortality rate

D. a smaller percentage of the labor force in urban areas
16. The term Fourth World has been coined to describe ?
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A. Countries that still have a communist government like China and Cuba

B. countries that have fallen far behind the economic advances of the rest of the world

C. The republics of the former Soviet Union

D. the newly industrialized countries like Korea, Taiwan Malaysia

17. Low agricultural productivity in developing countries is mainly caused by ?
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A. shortages of inputs including land

B. an over-investment in farm equipment

C. a lack of effective demand for food products

D. migration from rural areas to urban areas

18. The term Fourth World has been coined to describe ?
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A. countries that have fallen far behind the economic advances of the rest of the world

B. Countries that still have a communist government like China and Cuba

C. the newly industrialized countries like Korea, Taiwan Malaysia

D. The republics of the former Soviet Union

19. The policy that has been the most successful in increasing agricultural output in developing countries is ?
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A. produce marketing boards

B. import substitution

C. land reform

D. mechanization

20. Debt-re-scheduling is ?
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A. regular payments of interest and repayments of capital

B. a program of austerity measures agreed with the IMF to make repayment possible

C. a change in debt repayment due to inability to pay

D. an agreement with the World Bank to turn some of a debt into other forms

21. Experiences over the last three decades has suggested that in order for economic development to occur, it is necessary for an economy to ?
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A. stress agricultural development over industrial development

B. promote industrial development over agriculture

C. use a balanced strategy that promotes both agricultural and industrial development

D. stress the importation of agricultural products and the export of manufactured goods