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Chapter 22: Q7RQ (page 456)

Question. True or False. Economists are unanimous that foreign aid greatly helps DVCs

Short Answer

Expert verified

The above-given statement is false.

Step by step solution

01

Foreign aid

Foreign aid refers to the financial assistance that Industrially Advanced Countries (IACs) provide to the developing countries in several forms. This financial assistance helps these countries to strengthen their economy by developing their infrastructure and thus increasing their capital flow.

02

Explanation for the statement being false.

Economists argue that the financial aid provided by the IACs doesn’t help much in the development of DVCs.

  • Most of the assistance is given with a motive to have an influential power over the economic decisions of the DVCs.
  • The majority of the aid is not utilized for development purposes. Corruption diverts the funds to personal political gains and to clear the debt.
  • The most affluent DVCs receive a major share of the aid, and those who are less affluent receive only less aid. So the financial aid is only helping some of the DVCs, and some are still not receiving the actual help they need.

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Most popular questions from this chapter

Do you think that IACs such as United States should open their doors wider to the immigration of low skilled DVC workers as a way to help DVC develop? Do you think it is appropriate for students from DVC nations to stay in IAC nations to work and build careers?

Question. Which of the following policies would economists consider to be actions by a DVC government that will improve growth prospects?

Choose one or more answers from the choices shown.

a. Helping to extend the banking system to the rural poor.

b. Passing high tariffs against foreign products.

c. Constructing better ports, roads, and Internet networks.

d. Charging high fees for public elementary schools.

Do you think that the problems the DVCs face require a government-directed or a private-sector-directed development process? Explain your reasoning.

Explain the difference among microcredit, conditional cash transfers, and unconditional cash transfers. Then explain how effective each policy has been.

What is the demographic transition? Contrast the demographic transition view of population growth with the traditional view that slower the population growth is a prerequisite for raising living standards in DVCs
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