Which of the Following Does Not Explain Why Developing Countries

question 9

Multiple Choice

Which of the following does not explain why developing countries encouraged new manufacturing industries of their own in the mid 20th century?

• A) They were cut off from traditional suppliers of manufactures during WWII.
• B) Former colonial areas had something to prove; they wanted to attain the same income levels as their former rulers.
• C) Leaders of these countries feared that their efforts to escape poverty would be doomed if they continues to specialize in primary commodity exports.
• D) There was political pressure to protect these industries.
• E) Developing countries ran out of the natural resources that traditionally made up the majority of their trade.

---

Definitions:

Laspeyres Price Index

A price index calculated by taking the ratio of the total cost of purchasing a specified set of goods and services at current prices to the total cost of purchasing the same set of goods and services at base period prices, using base period quantities as weights.

Per Capita Income

The average income earned per person in a given area or country, calculated by dividing the total income by the population size.

Revealed Preferences

is an economic theory that infers consumers' preferences based on their purchasing habits, assuming that their choices reveal their preference structure.

Francs

A currency that was previously used in countries like France, Switzerland, Belgium, and Luxembourg, with some forms still in use today in a limited capacity.