Chapter 28 Post Quiz
The Challenge of Economic Development

Matching Questions:

Match the terms on the left with the definition in the column on the right. Enter the lowercase letter of that definition in the box to the left of the question number.

	1. Low per capital income	a. includes measures of schooling, literacy, life expectancy, and income.
	2. Human Development Index (HHI)	b. refers to the situation where low incomes lead to low saving; low saving results in slow growth of the capital stock; too little capital means that there are few new machines that can be used to increase productivity; low productivity results in low incomes.
	3. Infrastructure	c. states that the best government is the least government.
	4. Low saving rate	d. countries that have pursued economic policies that results in high levels of economic development.
	5. Vicious cycle of poverty	e. will grow faster than closed economies.
	6. Strategy of openness	f. an important characteristic of a developing country.
	7. Free-market absolutism	g. the most urgent problem in many developing countries.
	8. Open economies	h. pursued when a country aims at paying for imports by improving competitiveness and efficiency, developing foreign markets for its exports, and keeping trade barriers low.
	9. Asian Dragons	i. social overhead capital such as large-scale public projects.
	10. Socialism	j. arises in the communist system because the system does not have a suitable substitute for profits and prices as a means of motivating the economy.
	11. Principal-agent problem	k. characterized by government ownership of the resources of production.