Comparative Advantage
all of the following except
a. sustainable development has many objectives
b. development policies are interdependent
c. processes are as important as policies
d. democracy and capitalism should be the basis for all models of government
e. All of the above constitute the consensus that has developed
_____ 21. Many argue that growth in per capita income is an inadequate measure of development success since
a. exchange rates are constantly fluctuating
b. the effects of inflation cannot be accounted for
c. many non-market amenities are not accounted for in the cash economy and the incomes of rich and poor countries continues to diverge
d. all of the above
_____ 22. Why should poor countries grow faster than rich ones, ceteris paribus?
a. A smaller base gives a smaller percentage increase
b. Developing countries can copy new technology and production processes
c. Because developing countries are eligible for more aid programs than industrialized countries
d. all of the above
e. none of the above - history tells is that “small” economies will never catch up to “big” economies
_____ 23. The success of many East Asian countries has been attributed to many things. Which of the following is not an accepted element of successful development strategies?
a. high savings and investment rates
b. heavy investment in education, particularly science and engineering education
c. global integration including market and trade liberalization
d. heavy reliance on financial aid, rather than loans, from the IMF and World Bank
_____ 24. From the reading “Whither the North-South Gap”, Broad and Landi argue that
a. the North-South gap is closing as many developing countries adhere to World Bank policies
b. with the exception of the BEMs, the North-South gap is actually increasing
c. net private financial flows to the BEMs continues to decline
d. the International Monetary Fund is more important than the World Bank
_____ 25. Many developing countries overvalue their exchange rates because
a. an artificially stronger domestic currency makes it “cheaper” to import goods and “easier” to repay foreign loans, if this overvalued exchange rate is accepted
b. continued expansionary monetary policies in many developing countries has artificially strengthened their currencies
c. overvaluing is an attempt to weaken exchange rates
d. of conditionalities placed upon them by the IMF