MCQOPTIONS

Explore topic-wise MCQs in Economics.

This section includes 19 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.

1.	Which of the following is NOT one of the problems facing most developing nations ?
A.	Food shortages
B.	Foreign debt
C.	Rapid population growth
D.	Labor shortages
Answer» E.

2.	Which of the following factors has been suggest as an explanation for the lack of economic growth in many poor nations ?
A.	The constraints imposed by dependency on the already-developed nations
B.	A steady rate of capital formation
C.	An adequate level of social overhead capital
D.	The supply of human resources is too high
Answer» B. A steady rate of capital formation

3.	When economists talk about developing countries experiencing flight of capital they mean?
A.	money lent to the country being immediately invested abroad
B.	People investing their money in urban business rather than agriculture
C.	money moving around financial institutions rather than being invested in production
D.	people investing money abroad rather than in their own country
Answer» E.

4.	When economists say that developing countries have a dualistic economy the 2 parts referred to are ?
A.	modern sector and traditional sector
B.	town and country
C.	men and women
D.	rich people and poor people
Answer» B. town and country

5.	The term Fourth World has been coined to describe ?
A.	the newly industrialized countries like Korea, Taiwan Malaysia
B.	The republics of the former Soviet Union
C.	Countries that still have a communist government like China and Cuba
D.	countries that have fallen far behind the economic advances of the rest of the world
Answer» E.

6.	The policy that has been the most successful in increasing agricultural output in developing countries is ?
A.	mechanization
B.	land reform
C.	import substitution
D.	produce marketing boards
Answer» C. import substitution

7.	The main reason why land reform increase agricultural output is that is ?
A.	encourages mechanization
B.	allows the farmers to set the prices for their agricultural products
C.	enables farmers to escape the problem of diminishing return
D.	makes farmers owners of the land instead of tenants and owners’ farmers are more productive than tenant farmers
Answer» E.

8.	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 ?
A.	the vicious circle of poverty hypothesis
B.	the dependency theory
C.	neo-colonialism
D.	the under-consumptionist hypothesis
Answer» B. the dependency theory

9.	The developed nations have only about 15% of the world’s population, but they are estimated to consume _______ of the world’s output ?
A.	80%
B.	65%
C.	50%
D.	25%
Answer» B. 65%

10.	One of the benefits of putting resources into agricultural projects is that ?
A.	Successful agricultural projects produce surplus food to support urban development
B.	agricultural investment will prevent the flight of capital abroad
C.	agricultural projects usually have low import requirements
D.	export prices for agricultural products are more stable than those for industrial products
Answer» D. export prices for agricultural products are more stable than those for industrial products

11.	Most of the Third World/Fourth World debt was incurred in ?
A.	The colonial period
B.	The early 1950s
C.	most debt was incurred during the oil shocks of the 1970s
D.	the early 1960s
Answer» D. the early 1960s

12.	Many developing countries instituted import substitution policies because ?
A.	the prices of the goods they imported were falling
B.	the price of goods they exported were increasing
C.	their terms of trade were deteriorating
D.	their terms of trade were improving
Answer» D. their terms of trade were improving

13.	Low agricultural productivity in developing countries is mainly caused by ?
A.	shortages of inputs including land
B.	an over-investment in farm equipment
C.	migration from rural areas to urban areas
D.	a lack of effective demand for food products
Answer» B. an over-investment in farm equipment

14.	Experiences over the last three decades has suggested that in order for economic development to occur, it is necessary for an economy to ?
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
Answer» D. stress the importation of agricultural products and the export of manufactured goods

15.	Developing countries, if compared with other countries, have ?
A.	a lower rate of illiteracy
B.	a greater degree of equality in the income distribution
C.	a lower infant mortality rate
D.	a smaller percentage of the labor force in urban areas
Answer» E.

16.	Debt-re-scheduling is ?
A.	an agreement with the World Bank to turn some of a debt into other forms
B.	a change in debt repayment due to inability to pay
C.	regular payments of interest and repayments of capital
D.	a program of austerity measures agreed with the IMF to make repayment possible
Answer» C. regular payments of interest and repayments of capital

17.	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 ?
A.	debt rescheduling agreement
B.	debt service agreement
C.	program for growth
D.	stabilization program
Answer» B. debt service agreement

18.	A policy of developing local industries that can compete with imports is referred to as ?
A.	export promotion
B.	industrial promotion
C.	import substitution
D.	unbalanced growth
Answer» D. unbalanced growth

19.	85% of the world’s population lives in developing countries and receives about _____ of the world’s income?
A.	40%
B.	10%
C.	20%
D.	30%
Answer» D. 30%