Finals Reviewer Compilation of Quizzes

Multiple Choice
1. Increased productivity from manufactured exports is a key issue in international trade.

How is this increased productivity achieved?
A. By increasing the volume of the imports
B. By utilizing the best practices of world technology
C. By exerting more domestic effort
D. By implementing inward-oriented trade policies
2. High-Performing Asian economies refer to the following countries, except
A. Indonesia C. Japan
B. Singapore D. Philippines
3. Which theory/theorem states that the countries will specialize in and trade in goods which
are relatively abundant in their territory?
A. Theory of imperfect competition C. Heckscher-Ohlin-Samuelson theory
B. Ricardian theory D. Theory of comparative advantage
4. Which of the following best characterizes stage 5 of the Product Cycle Theory?
A. Imposition of import substitution policy
B. Reduction of protection by the government
C. Decline of foreign direct investment
D. Slowdown of production and exports
5. Which of the following are gains from international trade?
A. Capital investment gains and return on invested capital
B. Consumption and production gains
C. Marginal return gains and investment gains
D. Consumption possibilities gain and production possibilities gain
6. Which theory establishes a linkage between economic efficiency, factor endowments and,
direction of international trade?
A. Heckscher-Ohlin-Samuelson theorem C. Theory of absolute advantage
B. Theory of comparative advantage D. Theory imperfect competition
7. When the demand for foreign currency falls, what happens to the currency?
A. Depreciates C. It is impossible to predict
B. Remains the same D. Appreciates
8. It refers to the percentage at which the value-added of a product at a particular stage of
processing in a domestic industry exceeds its true value when there is no protection
A. Effective rates of production C. Effective balance of trade
B. Effective rates of exchange D. Effective rates of protection
9. Currency exchange rate directly affects the profitability of firms producing for the
international market. As such, currency exchange rate is by far the most important factor in
deciding trade policy. Which of the following statement holds?
A. The first statement is false. The second statement is true
B. The first and second statements are false
C. The first and second statements are true
D. The first statement is true. The second statement is false
10. As free trade agreement, which of the following regional associations belongs to AFTA?
A. MERCOSUR C. ASEAN
B. SAARC D. EU
11. Who is the founder or designer of Flying Geese Development paradigm?
A. Kaname Akamatsu C. Tadeusz Rybczynski
B. Joseph Stiglitz D. David Dollar
12. What happens to the demand for foreign currency as the demand for imports
decreases?
A. Cannot be determined C. Decreases
B. Remains constant D. Increases
13. Which theory/theorem talks about oligopoly or monopoly?
A. Theory of imperfect competition C. Theory of Absolute advantage
B. Ricardian theory D. Heckscher-Ohlin-Samuelson theory
14. The Foreign Trade Agreement are trade agreements that include preferential tariffs for
products that are produced in the countries that meet country of origin rules. Among these
FTAs is the NAFTA. What does NAFTA stand for?
A. North America Foreign Trade Agreement
B. North America Foreign Trade Association
C. North America Free Trade Association
D. North America Free Trade Agreement
15. What could be the reason for the increase in share of intra-Asian trade in the total Asian
trade?
A. Trade stimulated in countries that are distant from each other
B. There has been a stable exchange rate
C. Countries that produce on differential products are likely to engage in trade
D. There has been a rapid growth of regional cooperation arrangements that have
facilitated trade
16. Which statement best describes the banking regulations in the Philippines in the mid-
1990s in terms of interest controls and government debt purchase requirements?
A. Interests controls were stiff and strict
B. There were no interest controls like in Malaysia
C. Interests controls were highly regulated
D. Interests controls relaxed as some bond holdings were required
17. Holding other things constant, how are financial stability and liberalization related?
A. Positively related C. Relationship is statistically significant
B. Negatively related D. Relationship is not statistically significant
18. It refers to a non-governmental organization which became successful and turned to
rural banking cooperative. One prominent feature of this bank is that it is owned by its
depositors who are the primary borrowers.
A. Green bank of Bangladesh C. Gadang bank of Bangladesh
B. Gradang bank of Bangladesh D. Grameen bank of Bangladesh
19. It refers to a money lending institution that has started as a small money lending
business founded by a local shoemaker and his wife based in Indonesia
A. Grameen bank of Indonesia C. Bank gadang Indonesia
B. Grameen bank of Bali D. Bank dagang Bali
20. According to the Keynes model, in which of the following does consumption may
depend upon
A. Income C. Residual
B. Profit D. Savings
21. Which of the following best describes the banking regulations in Korea in the mid-1990s
according to Asian development bank Asian development outlook 1997?
A. Bank ownership is controlled by credit cooperatives
B. Bank ownership is mostly government
C. Entry is for both domestic and foreign firms
D. Entry is restricted to firm foreign firms alone
22. Which of the following reasons best explains why informal finance exists in a developing
country?
A. Lending institutions are exclusive for business sectors only
B. Access to banking facilities is limited for informal settlers in some areas of of the
rural economy
C. Lending institutions are for large scale businesses only
D. Financial institutions do not trust the character of the borrower
23. One of the determinants of savings are real interest rates. What stimulates saving
through higher financial returns for abstaining from consumption through the substitution
effect?
A. Lower revenue C. Higher interest rates
B. Lower real interest rates D. Higher consumption costs
24. There is peer pressure to repay loans in micro financing. Peer pressure works when the
other members cannot available own due to non-payment of the loan made by the other
members. Which of the following statements holds?
A. Both statements are true
B. The first statement is true. The second statement is false
C. The first statement is false. The second statement is true
D. Both statements are false
25. The income smoothing models allow to ease out consumption over some time without
constraints. Therefore, families can borrow and save at will in order to sort out their
consumption patterns to compensate for fluctuations in income. Which of the following
statements holds?
26. Empirical tests show that no relationship exists between growth in income and savings.
Thus, the growth and income does not affect savings. Which of the state statements holds?
27. The bank ownership of the following countries are mostly government, except
A. Malaysia C. Bangladesh
B. Taiwan D. India
28. Which of the following is not an informal finance that lends to many borrowers?
A. Credit unions C. Landlords
B. Money lenders D. Pawnshops
29. Which of the following best describes the banking regulations in the Philippines in the
mid-1990s according to Asian development bank Asian development outlook 1997?
A. Entry restriction is limited with quick easing
B. Entry restriction is a complex process
C. Bank ownership is mostly private
D. Bank ownership is mostly government
30. In the simple models of consumption behavior, the consumption function is presented
as a linear function of income. Which of the following is formed by saving?
A. Residual C. Operating profit
B. Net profit D. Surplus
31. The bank ownership of the following countries are mostly private, except
A. Indonesia C. Pakistan
B. Thailand D. Philippines
32. To address the problem of credit access to the formal financial system by marginalized
sectors of society among Asian economies like the Philippines, different credit schemes
were developed one of them was the so-called Roscas. Which of the following best describes
Roscas?
A. A micro financing scheme offered by a lender which is collected on a daily basis
B. A scheme where members offer valuable belongings in exchange for the amount
of money being borrowed
C. A form of group finance where individual members accumulate savings within the
group and then blend two members and also to outside groups
D. A form of collateralized micro financing
33. In which situation does financial repression exist?
A. The financial system does not allocate credit to the public
B. The banking sector plays a negligible role in a more competitive and freer
environment
C. The financial institution offers prohibitive interest on loans
D. There is no micro financing service for farmers
34. It refers to the total number of a children a woman is expected to have over her lifetime
if she bears children at the current age-specific birth rates
A. Death rate C. Birth rate
B. Population growth rate D. Total fertility rate
35. One of the reasons for the high demand for children in developing countries is that they
are considered the principal providers of old age security for the parents. In many
developing countries, retirement funds, pensions, and other systems to support the elderly
outside the family are not well developed. Which of the following statements holds?
B. Both statements are false
C. The first statement is true. The second statement is false
D. Both statements are true
36. Fertility rates in the Philippines are much higher compared in Thailand and Indonesia.
The government itself does not have a well-funded comprehensive program for population
control. This is because of the pressure coming from which of the following?
A. Philippine Statistics Authority C. World Health Organization
B. United Nations D. Culture
37. Which stage in the demographic transition is characterized by an economy that is fully
industrialized, and where birth rates begin to fall and catch up with the declining death rate?
A. Stage 1 C. Stage 2
B. Stage 3 D. Stage 4
38. Most of the countries in Asia have reached the stage of demographic transition where
the working-age population is growing faster than the child population. This movement in
human population is most apparent in East Asia and Central Asia
39. Which of the following stages in the demographic transition shows a relatively rapid rise
in population?
40. Which factors determine population growth?
A. Life expectancy and morbidity ratio C. Total fertility rate and infant mortality
B. Population and labor ratio D. Birth rate and death rate
41. Age structure within the population provides important insights about gross employment
and other issues affecting particular economies. A rapidly growing population is normally
characterized by having a high proportion of persons under 15 years old. Which of the
following statements holds?
42. An increase in the value of raising children can come up through the increase in the
price of direct “children expenditure”. Sending women to college increases the opportunity
cost of raising children. Which of the following statements holds?
43. In the theory of demographic transition, which of the following characterizes stage 1?
A. Fully industrialized economy high life expectancy rate
B. Primarily an agrarian economy with high birth and death rates
C. Fully industrialized economy both birth and death rates drop
D. The beginning of industrialization birth rate continues to be high but death rate
drops
44. In which theory our children treated like any other consumer for which there are costs to
their consumption?
A. Theory of population growth C. Supply-demand model of fertility
B. Demand for children D. Economics of fertility
45. Which of the following stages in the demographic transition is mainly agrarian and both
birth and death rates are high?
46. Direct costs on children include clothes, medication, food, and education. Indirect or
opportunity cost is measured in terms of time, effort, and resources foregone in the process
of bringing up children. Which of the following statements holds?
47. This trend is most apparent and East Asia and Central Asia
A. High life expectancy rates C. High birth rate
B. Low death rate D. Demographic dividend
48. It represents the number of deaths per thousand people
A. Total Fertility Rate C. Birth rate
B. Population growth D. Death rate
49. It is defined as the three stages of population growth
A. Total fertility rate C. Birth rate
B. Demographic transition D. Life expectancy rate
50. There are some basic measures used in poverty assessment. What is the first natural
measure of poverty?
A. The proportion of healthy life expectancy in the population
B. The proportion of poor people in the population
C. The proportion of the unemployed in the population
D. The proportion of unemployed in the employed population
51. Which theory explains why countries situated in colder places in the world have attained
industrial success and that the country situation provides environment that is conducive for
economic growth?
A. Solow growth theory C. Climate Structuralist theory
B. Global warming theory D. Climate theory of development
52. In situations where the poor have very low level of income, they cannot afford to buy in
bulk. Thus, the cost of goods per unit they buy is higher than the cost of goods when
purchased in bulk. Which of the following markets is affected by this buying pattern?
A. Labor market C. Securities market
B. Credit market D. Goods market
53. To address rural poverty, the government should create and enforce policies pertaining
to land and property rather than pursue further land reform program. Which of the following
best describes this government policy?
A. Check in rural credit schemes C. Relaxing tenancy regulations
B. Uplifting the status of women D. Establishing property rights
54. Which market is affected in situations where there is high level of unemployment or
underemployment?
55. One policy that the government may adopt to address the issue on rural poverty is to
build roads and bridges to connect the rural and urban areas. Which of the following best
describes this policy?
A. Improving exchanges between the rural and urban sectors
B. Encouraging labor migration
C. Providing rural infrastructure
D. Relaxing tenancy regulations
56. To address the problem of urban poverty, the government may adopt which of the
following policy measures
A. Providing social services C. Relaxing tenancy regulations
B. Stabilization of exchange rates D. Encouraging labor migration
57. Which of the following groups is the least vulnerable to poverty?
A. Minorities C. Men
B. Senior citizen D. Children
58. Poverty in rural areas exists because of lack of ownership of productive assets. This
stems from the reality that majority of the poor in rural areas or landless or these tenants
own very small parcels of land. Which of the following statements holds?
59. It refers to the inability of the population to access resources to enjoy a minimal or
acceptable standard of living
A. Social injustice C. Procedural injustice
B. Poverty D. Population explosion
60. It represents the proportion of national income required to eliminate property
A. The poor-rich gap ratio (PRGR) C. The poverty gap ratio (PGR)
B. The rich-poor gap ratio (RPGR) D. The inequality gap ratio (IGR)
61. Chronically, poor families are those who live below poverty line for a sustained period of
time while those families who come in and out of poverty depending on circumstances like
illness and employment are classified as temporary poor. From this context, families can
therefore experience several periods of poverty and are classified as chronically poor. Which
of the following statements holds?
62. Widespread poverty is usually associated with high unemployment rate. This is because
labor is the only productive means people can depend on for daily existence
63. Which of the following results to inequality in society?
A. Economic development is controlled by the rich
B. The benefits of economic development trickle down to every individual or
household in society in the same proportion
C. Economic development benefits some members of the society more than the
others
D. Economic development benefit all sectors of the society at the same proportion
64. It refers to the uneven distribution of income and expenditure across population groups
A. Social inequity C. Economic disequilibrium
B. Economic in equity D. Social injustice
65. Which of the following is affected in situations where the poor cannot borrow money
from formal financial institutions due to lack of collateral?
66. When the price of food is very sensitive, the poor household tends to make strong
substitution to food. Medical facilities and services in the developed countries are very
inadequate in providing for the health needs of the growing population
A. The first statement is true. The second statement is false
B. The first statement is false. The second statement is true
C. Both statements are true
67. Malnutrition is defined as the lack of nutritional requirements for the physical body to
function. Studies suggest that poorer households devote a greater proportion of their budget
to food and that they have a relatively low income elasticity of demand for food
68. There is a high correlation between educational attainment and earnings for a whole
range of occupations in many countries. There is also a significant relationship between
increases and expenditure on education and the level of educational attainment and rates
of growth and income
69. Health services in developing countries are unevenly distributed with large urban-rural
differentials in the quality of services provided. The more effective approach on health care
should be focused on curative healthcare
70. The major reason that education is subsidized is that the external benefits are thought
to be very high. Scarce resources are best spent on tertiary education whether both social
and private returns are highest
71. User fees for the highest cost services can be brought close to the cost of providing
them only if medical insurance is widely available. This susceptibility of working-age
individuals to AIDS can lead to a potential increase in saving rates and disposal income
72. Allowing greater privatization of the school system helps promote competition between
public and private schools. However, the proliferation of private schools may exacerbate
existing income and wealth inequities within an economy
73. The pupil-teacher ratio does not have much effect on educational outcomes when the
range is 50 to 70 pupils per teacher. Past a certain threshold of income, there is bound to
be greater substitution between the quantity and quality of education obtained
74. The openness to globalization raises the returns to education in the poor countries since
the flow of technology and enables many of them to begin manufacturing skill and capital-
intensive products that require more highly skilled and educated labor. Although gender
disparities exist at all levels of education, they tend to increase as income rises as do
literacy differentials
75. Societies will never benefit from the positive externalities that arise from the provision of
education so there is no rationale for government subsidies. Private returns to education
can be calculated as the internal rate of return to the individual that equalizes the direct
costs of schooling with the discounted value of the after-tax gain from schooling
76. The higher levels of education, the greater benefits accrue to the individual more than
the society. In the early stages of development urban to rural migration is more attractive to
the less educated agricultural workers
77. Spending on military and defense usually absorbs a much larger proportion of
government budgets than education and other expenditures. There is a shift in the
proportion of public expenditures and education by the level of schooling as income per
capita in a country increase
78. The income elasticity of public expenditures on primary and secondary education has
been estimated to be around 2.0. Studies suggest that teacher salaries have declined in
relation to the average incomes in many countries
79. Human capital investments in health and education are effective mechanisms for
bringing marginalized groups into the mainstream. There is little evidence to support that a
determinant out of chronic poverty is education
80. Studies suggest that the pupils home environment and social status are much more
important in developing countries than it is in developed countries. Tertiary education tends
to be much more costly relative to primary education in developed countries than it is in
developing countries
81. The public education system is generally criticized for being less responsive to changes
in demand than a private system. Improving women's education has the beneficial external
effect of increasing fertility and infant mortality rates
82. In some developing countries, the shortfall in the supply of educational services relative
to demand has led to the growth of publicly funded schools. One outcome of having a
private and public-school system is that employers tend to favor graduates of private
schools over their public-school counterpart
83. Among Asian countries, there appears to have a stagnant increase in cross-border
mergers and acquisitions. International institutions do not have an active role in the current
globalization scenario as they are focused only on worldwide recession and environmental
regulations
84. Strategic alliances between companies could happen for different reasons but cutting
losses to restructuring is not one of them. Migration can happen due to pull factors such as
avoiding religious or ethnic persecution, fleeing a war zone or natural disaster, or to seek
better life both economically and socially
85. One of the arguments of globalization is that while some technology is transferred, it is
almost never at the cutting edge, and there is often very little transfer of technology.
Developing countries fully support the patent laws and the protection of intellectual property
to provide incentives for new research and development in all cases
86. The food subsidies to farmers in the industrial countries lower prices in international
market and therefore reduce the imports from developing countries. One criticism of
international agencies such as the IMF and World Bank is that they apply the same remedy
for all cases of financial and macroeconomic distress
87. Globalization resulted to rapid growth in size and reach of multinational corporations
which have production marketing then distribution platforms in one country. The volume of
world trade has been increasing more rapidly than world income
88. The flow of migrants due to globalization is much more restricted than the actual flow of
capital. An increased dependence on exports may mean that a slowdown in demand from
the industrial countries has a strong negative impact on economic growth throughout the
region
89. Trade and FDI rose in PRC as a result of the following sets of reforms, except:
A. Greater freedom in foreign exchange transactions
B. Licensing of foreign trade corporations and domestic firms with trading rights
C. Established for foreign investment act which attracted substantial capital inflows
D. Liberalization of FDI with formation of special economic zones
90. Ideally, multinational enterprises pertain to companies that has a cut-off point of 30% or
more of its outputs capacity/sales coming from outside the country of origin. Globalization
has resulted to a tremendous rise in cross-border mergers and acquisitions
91. Chiang Mai initiative pertains to the formal initiative to expand swap arrangements
between central and local banks in region. One of the advantages of globalization is the
tendency for the richer countries to continue to exploit the developing countries
92. The traditional or conventional spider system organizes the production of components at
different sites where they are assembled at the central site to be shipped to the final
market. The central assembly system is where all components are made, assembled, and
shipped from one location
93. The following areas where globalization has taken place, except
A. Labor force participation C. Telecommunications
B. Intellectual property D. Financial transactions
94. The new economy is defined as a knowledge-based economy in a new business
environment, while the old economy pertains to an increasing and accelerating labor
productivity and restructuring of the company. Together with computing power came the
digitalization revolution that has permeated all information—not only in words and data but
in pictures and videos as well
95. Assistance for startups from the private sector can help foster entrepreneurship
including help for groups such as women, ethnic groups, SMEs, and other targeted groups.
Digital divide is defined as the ability to access exchange and process information through
digital equipment
96. B2C or business to customer transaction will allow firms to search out the least-cost
suppliers and highest quality with substantial reductions in search costs. The increased
efficiency and greater competition among suppliers will have a salutary effect on inflation
97. Which of the following has an added advantage and its skilled and relatively low-cost
English fluent labor force?
A. Indonesia C. Philippines
B. Thailand D. Singapore
98. The internet has the capacity to cut the search costs and improve economic efficiency
but only if this new technology is embraced by a wide section of the economy. The emphasis
in the future had been on returns to women's education and the synergies that these
investments have with health, fertility, population growth, and infant mortality
99. The new economy has brought with it a dramatic acceleration in innovation, a
telescoping of the time lag for the introduction of new models, an explosion of new product,
a longer product life, greater competition, and improved efficiency. New economy has also
resulted to more new firms, more new products, and more firms staying in business.
100. In Asia, the richest countries normally have the best record for developing an attractive
environment for entrepreneurs. A good entrepreneurial environmental does not include
having a financial market that facilitates access to financing
101. As a result of the liberalization of capital transactions and markets, the outflows of
capital by residents have become increasingly important in determining a country's net
capital flows. Developed countries in general are exporting capital and appear to be growing
faster than the country's receiving the capital inflows
102. One of the risks of training IT specialists is that they may be recruited by foreign
companies after training, thus contributing to crab mentality or brain drain. It is essential to
have a strong entrepreneurial culture that is supported by appropriate government policies
for innovation and adaptation of new technologies to take place
103. The following are the preventive policy implications, except
A. There is a need for highly targeted information campaigns tailored for the poor and
the uneducated
B. Increased incomes through greater employment opportunities for all
C. Keep education levels high—get more children and young adults to attend school
for more years
D. Increase R&D efforts in treatment and drug development
104. As hardware becomes more standardized, firms in the computer industry are stressing
on business solutions and more customized products to reach all markets. The purpose of
WTO is to respond to the financial interests of the industrial countries while the IMF paid
attention to the trade interest in these same industrial countries
105. Internet can increase company efficiency by reducing inventories and adopting
efficient and sophisticated just-on-time arrival inventory management. Internet can help
companies purchase inputs at lower prices by streamlining the intermediation process
106. If firms have to rely on foreign technology and value chain networks established by
multinationals, then it will be difficult for domestic firms to capture new export markets and
penetrate existing markets. Closing the digital divide requires multinational firms to
undertake more education and training in ICT
107. Forming an optimal currency area can cause a country to lose complete control over its
monetary policy and autonomy and fiscal policy. One risk of having a common currency is
that a weak banking system could undermine the common currency arrangement
108. Having a common currency in a region may entail having greater opportunities for
trade and flexibility in wages and prices as well as minimal competition. Having a common
currency will minimize the risks and volatility of a floating exchange rate for an individual
country
109. As a result of globalization, trade in goods and services capital flows through foreign
direct investment and financial investment in equity and debt have accelerated rapidly.
Globalization has resulted to higher tariffs and removal of non-tariff barriers
True or False
True 1. Mongolia belongs to East Asia
True 2. Theory of imperfect competition talks about oligopoly and monopoly
True 3. All these countries: Nepal, India, Sri-lanka, Bangladesh, and Bhutan belongs to
SAARC
True 4. Heckscher-Ohlin-Samuelson theorem states that countries will specialize and
trade in goods which are relatively abundant in their territory
False 5. As the demand for imports increases demand for foreign currency decreases
False 6. Heckscher-Ohlin-Samuelson theorem states that the differences in technology
determine comparative advantage
True 7. When the demand for dollar currency increases, the dollars currency appreciates
False 8. Theory of imperfect competition establishes a linkage between economic
efficiency, factor endowments, and the direction of international trade
False 9. Lao PDR is not included in Mekong countries
False 10. As the financial system is dominated by commercial banks in Asia, the informal
financial institutions do not play any role in the entire economic system
True 11. The financial system is an integral part of modern economics and the
commercials banks constitute the primary components of the financial system in
Asian countries
False 12. Roscas method of financing has never existed in the Philippines
True 13. Peer pressure works when the other members cannot avail of a loan due to non-
payment of the loan made by the other members
True 14. Informal financial institutions do not fall under the supervisory umbrella of
Central Bank
True 15. The income smoothing models allow to ease out consumption over some time
without constraints
False 16. Countries that adopted Roscas traditionally included women in their operations
False 17. Studies show that when the labor force participation rate of women goes up
fertility also goes up
True 18. The “demographic dividend” is a term coined to describe the demographic
transition when the working population is growing faster than the child and adult
populations combined
False 19. Demographic transition can take few years even less than a decade to occur.
Hence, its economic impact can only be felt a short period of time
False 20. Micro-studies show that female education beyond four years of elementary
education have a strong positive effect on fertility
False 21. Stage 3 of the demographic transition is responsible for the dramatic increase in
world population
False 22. Life expectancy and total fertility rates are positively correlated
True 23. World population growth accelerated from the 18th century through the 19th
century due to advances in medicine
False 24. The inverted U shape is explained by the greater variation and incomes that
come about during the early traditional agriculture phases
True 25. The Lorenz curve is a graphical representation of the relationship between the
cumulative share of income and the cumulative share of the population
True 26. Poor in urban areas are primarily self-employed or working in small-scale
establishments
False 27. Kuznet income ratio can be derived from the Lorenz curve
True 28. Poverty tends to perpetuate itself since the children of the poor tend to remain
poor. This is sometimes called the “virtuous cycle” of poverty
True 29. Those who have skills and capital are more productive and are paid higher wages
in line with marginal productivity theory
False 30. Poverty rates are higher in urban areas due to the influx of migrants from the
countryside
True 31. Trade openness allows Asian economies to take advantage of externalities in
marketing and distribution to help exporters lower cost
False 32. The Simon Kuznets curve says that the inequality follows an inverted U shape
and equality is low at low levels of income then deteriorates rapidly as income
increases; inequality levels improve again at higher levels of income
False 33. Despite substantial economic grow in many countries, poverty remains
widespread. Estimates vary but more than 45% of the world's population live in
poverty worldwide
True 34. Total fertility rate and population growth are positively correlated
False 35. Studies suggest that poorer households devote a greater proportion of their
budget to food and that they have a relatively in low income elasticity of demand for
food
False 36. Globalization has resulted to a tremendous decrease in cross-border mergers
and acquisitions
False 37. Globalization resulted to rapid growth in size and reach of multinational
corporations which have production, marketing, and distribution platforms in one
country
True 38. Societies will never benefit from the positive externalities that arise from the
provision of education so there is no rationale for government subsidies
False 39. Although gender disparities exist at all levels of education, they tend to increase
as income rises as do literacy differentials
False 40. Because of advances in the medical field health conditions of populations have
improved gradually. Thus, life expectancy and infant mortality has increased
True 41. The greater the public expenditure on development, basic education, and health,
the greater the responsiveness of poverty to growth
True 42. Tertiary education tends to be much more costly relative to primary education in
developed countries than it is in developing countries
False 43. Morbidity is more closely monitored than mortality and is more easily defined
False 44. Studies suggest that the pupil’s home environment and social status are much
more important in developing countries than it is in developed countries
True 45. Human capital investments in health and education are effective mechanisms for
bringing marginalized groups into the mainstream
True 46. The growth of capital flows has been more volatile than the growth of trade
True 47. Globalization refers to the ongoing social, political, and economic integration that
has been taking place since World War
True 48. As the labor forces of the developed countries age, there will be an increasing
need to import labor in the working-age categories
True 49. Migration can happen due to push factors such as avoiding religious or ethnic
persecution, fleeing a war zone or natural disaster, or to seek better life both
economically and socially

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Multiple Choice

1. Increased productivity from manufactured exports is a key issue in international trade.

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