Developing Economies test

1

Which of the following is a primary characteristic of a developing economy?

High capital formation and savings

Surplus labor in modern manufacturing

Low per capita real income

A dominant tertiary sector in the initial stages

2

The term "disguised unemployment" refers to:

People actively seeking jobs but unable to find them

Marginal productivity of labor being zero or near-zero

Wages below the poverty line

Workers changing jobs frequently

3

According to the vicious circle of poverty theory:

Trade makes rich countries poor

Government spending eliminates poverty automatically

Low income leads to low savings and low investment

Population growth reduces poverty

4

A typical developing economy depends heavily on:

Manufacturing sector

Agricultural sector

Service sector

Foreign exports

5

Which of the following is a primary characteristic of a developing economy?

Low per capita real income

A dominant tertiary sector in the initial stages

High capital formation and savings

Surplus labor in modern manufacturing

6

The Prebisch-Singer Hypothesis suggests that:

Population growth exceeds food production

Foreign aid reduces savings

Terms of trade for primary commodity exporters decline over time

Inflation destroys currency value

7

Capital flight refers to:

Import of luxury goods

Export of machinery abroad

Transfer of financial assets to foreign countries

Migration of skilled workers

8

Economic dualism means:

High imports and low exports

Two political systems in one country

Coexistence of modern and traditional sectors

Government and private ownership together

9

Capital formation remains low in developing countries mainly because:

Low national income and savings

Lack of natural resources

Restrictions on business ownership

High savings rate

10

Population explosion in developing economies occurs because:

Governments encourage larger families

Immigration rises sharply

Birth rates remain high while death rates fall

Birth and death rates both increase

11

Calculation Correction

12

Score