MCQ questions

Technology has widened the gap between rich and poor countries for which of the following reasons?

• Most of the recent technological innovations have been labor saving innovations complementary to high levels of capital.
• Technological innovations have had the largest productivity gains in the agricultural and primary commodity industries.
• Poor countries do not have access to the technology used in rich countries.
• International organizations like the IMF and World Bank insist that developing countries limit their use of technology to maintain their cultural heritage.

Which of the following best characterizes population trends over the past forty years?

• Developing countries are set to receive a demographic dividend, that is guaranteed to lead a higher economic growth rate.
• Fertility rates in developing countries have been falling
• Developed countries are experiencing larger old-age dependency ratios because fewer people are choosing to retire at the age 65.
• Population growth rates are highest in rich countries, since these are the countries that have the capacity to support large population growth.

As countries become more and more developed, the size of its shadow economy relative to GNI tends to shrink. Given this fact, the failure by GNI to fully count economic activity in the shadow economy is likely to...

• Cause us to overestimate the standard of living in a country measure at a given point in time.
• not make any problem since all shadow economy activities are illegal and should not be counted
• Lead us to compute GNI as smaller than GDP
• cause us to overestimate economic growth rates