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Multiple Choice Quiz
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1

Which of the following statements about the least developed countries is true?
A)Trade-to-GDP ratios are low in the least-developed countries.
B)Trade is an important component of GDP in the typical least developed country.
C)Least developed countries generally have closed trade regimes.
D)Least developed countries almost never export manufactures.
E)All of the above are true.
2

Annual per capita GNP is about __________ times higher in high-income countries than in low-income countries, and GNP growth rates are on average __________ in high-income countries than in low-income countries.
A)10; higher
B)10; lower
C)60; higher
D)60; lower
3

According to Hla Myint, when a country's production capabilities exceed its domestic demand, international trade can serve as a(n)
A)vent for surplus.
B)roadblock to industrialization.
C)road to poverty.
D)buffer to export instability.
4

The debt service ratio (that is the ratio of payments on long-term debt plus interest payments on total debt as a percentage of exports) is
A)above 80% on average for developing countries.
B)highest for developing countries in the western hemisphere.
C)lowest for developing countries in Africa.
D)all of the above.
5

Which of the following is not a cause of the debt problem faced by developing countries?
A)falling real interest rates during the 1980s
B)declining prices of primary products during the 1980s
C)capital flight from developing countries
D)recessions in the developed world in the early 1980s
6

Solutions to the debt problem may include
A)debt rescheduling.
B)currency devaluation.
C)debt relief.
D)debt-for-equity swaps.
E)all of the above.
7

The Prebisch-Singer hypothesis is the notion that
A)earnings from exports of manufactured products steadily decrease for most developing countries.
B)developing countries' terms of trade tend to deteriorate over time.
C)developing countries' terms of trade tend to improve over time.
D)capitalists in developed countries form cabals with elites in developing countries in order to perpetuate the economic dependency of developing countries.
8

Which of the following strategies have developing countries not used to cope with export instability?
A)export quota agreements
B)international buffer stock agreements
C)commodity concentration agreements
D)compensatory financing
9

The development strategy that emphasizes participation in international trade by encouraging resource allocation by "getting prices right" is called
A)import promotion.
B)outward-looking.
C)inward-looking.
D)economic integration.
10

Which of the following are potential problems with an outward-looking trade strategy?
A)Export prices may rise if many developing countries follow an outward-looking strategy.
B)The developing world still faces formidable trade barriers when trying to export to industrialized countries.
C)There are no examples of countries that have successfully used this strategy.
D)All of the above.





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