Chapter 7
Economic Development
07.01 Which of these factors is involved in the
international movement of money and financial
securities?
1. U.S. trade deficit
2. oil money
3. bank secrecy laws
4. laundered money
5. all of the above
07.01 Which of these factors is involved in the
international movement of money and financial
securities?
1. U.S. trade deficit
2. oil money
3. bank secrecy laws
4. laundered money
5. all of the above
Explanation: All of the above are factors in the
international geography of finance, in which money
moves around the globe in search of greater profits from
investments.
07.02 Which of these is an example of a very
low income country?
1. South Korea
2. South Africa
3. Saudi Arabia
4. Ethiopia
5. all of the above
07.02 Which of these is an example of a very low income
country?
1. South Korea
2. South Africa
3. Saudi Arabia
4. Ethiopia
5. all of the above
07.03 Cost advantages that accrue to individual
firms because of their location among
functionally related activities are called:
1. agglomeration effects
2. agglomeration diseconomies
3. ancillary activities
4. backwash effects
5. autarky
07.03 Cost advantages that accrue to individual firms because of
their location among functionally related activities are called:
1. agglomeration effects
2. agglomeration diseconomies
3. ancillary activities
4. backwash effects
5. autarky
Explanation: When firms cluster geographically, they can take
advantage of the proximity of related activities. Silicon Valley, in
California, is an example of agglomeration effects, with hardware,
software, and research firms all located near each other; these firms
can benefit from the availability of each other’s products and
services.
07.04 The gap between the world’s rich and
poor:
1. is decreasing steadily
2. is increasing steadily
3. is staying the same
4. has increased, but is now decreasing
5. has decreased, but is now increasing
07.04 The gap between the world’s rich and poor:
1. is decreasing steadily
2. is increasing steadily
3. is staying the same
4. has increased, but is now decreasing
5. has decreased, but is now increasing
07.05 In which of these regions is a very high
percentage of the population engaged in
agriculture, forestry, and fishing?
1. South America
2. Africa
3. Australia
4. Europe
5. Middle East
07.05 In which of these regions is a very high percentage of the
population engaged in agriculture, forestry, and fishing?
1. South America
2. Africa
3. Australia
4. Europe
5. Middle East
07.06 The situation in which countries have to
constantly borrow money in order to finance
development is known as:
1. monetarism
2. autarky
3. inflation
4. debt trap
5. backwash effects
07.06 The situation in which countries have to constantly
borrow money in order to finance development is known
as:
1. monetarism
2. autarky
3. inflation
4. debt trap
5. backwash effects
Explanation: Some countries, such as Brazil, have had
to borrow more money to finance development as well
as meet interest payments on existing debt.
07.07 Which of these is not an example of an
offshore financial center?
1. Hawaii
2. Panama
3. Cayman Islands
4. Bahrain
5. Nauru
07.07 Which of these is not an example of an offshore
financial center?
1. Hawaii
2. Panama
3. Cayman Islands
4. Bahrain
5. Nauru
Explanation: Offshore financial centers are places that
offer secrecy and shelter from taxation and regulation;
they are not necessarily islands or “off shore.”
07.08 Which of these countries has a very low
index of gender empowerment?
1. Canada
2. Australia
3. Saudi Arabia
4. Japan
5. Peru
07.08 Which of these countries has a very low index of gender
empowerment?
1. Canada
2. Australia
3. Saudi Arabia
4. Japan
5. Peru
Explanation: The gender empowerment index measures women’s
participation in a society and how their wages compare with those of
men.
07.09 The final stage in W. W. Rostow’s stages
of growth model is:
1. traditional society
2. preconditions for take-off
3. take-off
4. drive to maturity
5. high mass consumption
07.09 The final stage in W. W. Rostow’s stages of growth model is:
1. traditional society
2. preconditions for take-off
3. take-off
4. drive to maturity
5. high mass consumption
07.10 Which of these countries gives the lowest
percentage of its Gross National Income (GNI)
to poorer countries as international development
assistance?
1. Norway
2. United States
3. Ireland
4. Australia
5. Spain
07.10 Which of these countries gives the lowest percentage of its
Gross National Income (GNI) to poorer countries as international
development assistance?
1. Norway
2. United States
3. Ireland
4. Australia
5. Spain
Explanation: The United States, while giving the largest amount in
absolute dollars, gives only 0.15 percent of its GNI as development
assistance. All of the other countries listed here give 0.23 percent or
more, with Norway giving as much as 0.92 percent.
07.11 In which of these cities does the vast
majority of European advertising agencies
congregate?
1. Paris
2. London
3. Frankfurt
4. Amsterdam
5. Zurich
07.11 In which of these cities does the vast majority of
European advertising agencies congregate?
1. Paris
2. London
3. Frankfurt
4. Amsterdam
5. Zurich
07.12 The idea of carrying capacity is best
described by:
1. the maximum number of sheep that can graze
on a field
2. the human pressures from irrigation in a
desert
3. the number of potential people that can be
born in a country
4. the number of acres there are in a forest
5. all of the above
07.12 The idea of carrying capacity is best described by:
1. the maximum number of sheep that can graze on a
field
2. the human pressures from irrigation in a desert
3. the number of potential people that can be born in a
country
4. the number of acres there are in a forest
5. all of the above
Explanation: Carrying capacity is the maximum
population that can be maintained in a place without
damaging long-term productivity.
07.13 Maquiladoras are manufacturing plants
that are located in which region?
1. in coastal areas of Brazil
2. in Mexico near the U.S. border
3. in central Mexico
4. in states such as Texas and California
5. in Caribbean islands
07.13 Maquiladoras are manufacturing plants that are
located in which region?
1. in coastal areas of Brazil
2. in Mexico near the U.S. border
3. in central Mexico
4. in states such as Texas and California
5. in Caribbean islands