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Characteristics of A Developing/Underdeveloped Economy - SS3 Economics Past Questions and Answers - page 1

1

Which of the following is a characteristic of a developing or underdeveloped economy?

A

High GDP per capita

B

Low poverty rates

 

C

Dependence on tertiary industries

D

Limited access to capital

correct option: d
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2

Which of the following is a consequence of limited access to capital in a developing economy?

A

High levels of human capital

B

Low levels of economic diversification

 

C

Political stability

D

High levels of infrastructure development

correct option: b
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3

What is the primary sector of the economy in a developing economy?

A

Manufacturing

B

Agriculture

 

C

Information technology

D

Financial services

correct option: b
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4

Which of the following is a characteristic of human capital?

A

Infrastructure development

B

Education and skills

 

C

Dependence on primary industries

D

Limited access to credit

correct option: b
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5

What is the consequence of political instability in a developing economy?

A

High levels of economic growth

B

Limited access to capital

 

C

Dependence on tertiary industries

D

Low poverty rates

correct option: b
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6

Explain why developing economies may have limited access to credit.

Developing economies may have limited access to credit due to weak financial systems, limited collateral, and a lack of credit history. Additionally, developing economies may face higher risk and uncertainty, which can lead to higher interest rates and further limit access to credit.

 

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7

Describe one consequence of dependence on primary industries in a developing economy.

Dependence on primary industries in a developing economy can lead to vulnerability to fluctuations in commodity prices. This can limit economic diversification and create a reliance on a small number of industries, which can be a risk to long-term economic stability.

 

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