Advanced Topics in Development Economics Exam
Review
Course Introduction
This course explores contemporary and advanced issues in development economics, focusing on both theoretical frameworks and empirical approaches to understanding the problems and prospects of economic development in low- and middle-income countries. Key topics include poverty and inequality measurement, the role of institutions, governance and corruption, human capital, health, education, microfinance, and the impact of globalization and trade. The course emphasizes current research methodologies, policy debates, and the practical challenges policymakers face in fostering sustainable economic growth and reducing poverty. Students will engage with classic studies and the latest literature, developing critical analysis skills and the ability to assess the effectiveness of various development interventions.
Recommended Textbook
Development Economics Theory Empirical Research and Policy Analysis
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608 Verified Questions
608 Flashcards
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Page 2
1st Edition by Julie Schaffner
Chapter 1: What Is Development Economics Good
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Sample Questions
Q1) Policies that intervene in the market include:
A) the government hires a contractor to build a road
B) making credit more available to stimulate investment by firms
C) Social Insurance and assistance
D) tariffs and other polices aimed at encouraging or discouraging international trade
Answer: D
Q2) Agricultural research to improve corn yield will increase corn farmer's income,which group is most like to be hurt by this research?
A) Consumers who now have to pay higher prices for corn
B) Consumer who now have to pay higher prices for wheat
C) Wheat farmers who now receive a lower price for the same amount of wheat
D) Dairy farmers who feed their cattle a mix of corn and wheat
Answer: C
Q3) Which of the following is NOT true about rural Ethiopia?
A) Most people live on less than $2 a day
B) Most people do not have access to clean water
C) Most people have one or two children
D) Most people have never been enrolled in school
Answer: C
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Page 3
Chapter 2: Well-Being
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Sample Questions
Q1) The magnitude of household's needs can be affected by all of the following except:
A) Households with members that are disabled or sick
B) Cultural norms regarding celebrations and other obligations
C) Income
D) Number of dependants in the household
Answer: C
Q2) Which of the following cost saving activities is referred to as ex post responses to fluctuations?
A) Households spend less than earnings in an effort to "Save up"
B) Keep extra money in a mud bank
C) Take out a loan,promising to repay it with interest out of future income
D) Purchase a formal insurance
Answer: C
Q3) In studying the well-being,it is most common to focus on:
A) households
B) individuals
C) entrepreneurs
D) the Macro economy
Answer: A
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Page 4
Chapter 3: Economic Growth
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32 Flashcards
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Sample Questions
Q1) If one country is growing at a growth rate of 2 percent per year,how many years would you expect for it to double income per capita?
A) 36 years
B) 72 years
C) 14 years
D) 100 years
Answer: A
Q2) Diminishing marginal product of labor refers to as the quantity of labor increases, A) average product of labor reaches a maximum.
B) marginal product of labor decreases.
C) total product of labor reaches a maximum.
D) average product of labor decreases.
Answer: B
Q3) Economic growth takes place when total income grows ______ the population. A) faster than B) slower than
C) at the same speed as D) independently of
Answer: A
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Page 5
Chapter 4: Economic Growth Theory in Historical Perspective
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Sample Questions
Q1) In the Lewis model,in the subsistence sector,the value of marginal product of labor is A) zero.
B) positive.
C) negative.
D) determined in the labor market.
Q2) Using the Harrod-Domar growth model,suppose one economy has to maintain a growth rate of GDP of 10 percent per year in order to avoid a decline in the average standard of living.Assume in this economy,the capital-output ratio v is 3 and the depreciation rate d is 5%,what is the required saving rate?
A) 5 percent.
B) 15 percent.
C) 30 percent.
D) 45 percent.
Q3) What is the significance of possible increasing returns to scale for our understanding of economic growth?
Q4) What is the knife-edge problem in the Harrod-Domar Growth Model?
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Page 6
Chapter 5: Poverty,Inequality and Vulnerability
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Sample Questions
Q1) If one person in an economy had all the income and the rest of the population had zero income,where would the Lorenz curve for this economy locate?
A) 45 degree line.
B) L-shaped curve following the bottom and right sides of the Lorenz curve box.
C) L-shaped curve following the left and top sides of the Lorenz curve box.
D) a curve starts off with a lope lower than 1 then it becomes steeper.
Q2) All of the following is examples of Ex ante coping mechanisms except:
A) precautionary saving.
B) participation in informal insurance arrangements.
C) take out loans to smooth consumption.
D) use of insecticide-treated bed nets.
Q3) Growth policies are more likely to reduce vulnerability in the following situations except
A) raising the incomes of the poor
B) creating immunization programs
C) people moving in response to new opportunities.
D) facilitate the development of market relationships
Q4) What is involved in constructing a measure of inequality?
Q5) What is involved in constructing a measure of poverty?
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Chapter 6: Consumption, Time Allocation and Production
Choices
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Sample Questions
Q1) If the prices of food and non-food stay constant and consumers income doubles,what will happen to the budget line?
A) The budget line will stay unchanged.
B) The budget line will shift in toward the origin in a parallel fashion.
C) The budget line will shift out from the origin in a parallel fashion.
D) The budget line will change but we need more information to know how.
Q2) When consumers receive distributions of free rise,the quantities of rise they consume are likely to ________ and by ________ the quantity of rice received in the distribution.
A) rise; more than
B) rise; the same amount as
C) rise,less than
D) the quantities of rise they consume are not going to change
Q3) An increase in p will ________ the VMPL schedule and will lead to ________in the quantity of low-skill labor demanded.
A) shift up; an increase
B) shift up; a decrease
C) shift down; an increase
D) shift down; a decrease
Page 8
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Chapter 7: Houesholds
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Sample Questions
Q1) If a farm household's net market labor supply is positive,it means ________.
A) some family labor is hired out through labor markets
B) non-family labor is hired in through labor markets
C) all of the family labor is working for other farms
D) this household is a subsistence farm household
Q2) The variables that determine a household's budget line are
A) Its preferences and income
B) Its preferences and prices
C) Prices and income
D) None of the above
Q3) Wage labor households maximize their utility by choosing ________.
A) consumption of food.
B) consumption of non-food.
C) enjoyment of home time.
D) All of the above.
Q4) How can rising incomes reduce gender gaps in consumption?
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Chapter 8: Domestic Markets for Goods and Services
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Sample Questions
Q1) According to Figure 8.1,if we define LIP as the local import price,EP as the external market price,LEP as the local export price,and AP as the autarky price,which distance represents the transfer costs of purchasing beans from the big city?
A) LIP minus LEP
B) LIP minus AP
C) LIP minus EP
D) LIP minus 0
Q2) According to Figure 8.1,if we define LIP as the local import price,EP as the external market price,LEP as the local export price,and AP as the autarky price,which distance represents the transfer costs of selling beans to the big city?
A) EP minus LEP
B) EP minus AP
C) LIP minus EP
D) LIP minus LEP
Q3) If a market is in exporting equilibrium,an increase in supply will:
A) Increase local production but leave the local price unchanged
B) Increase local production and the local price
C) Decrease local production and the local price
D) Increase local consumption and decrease the local price
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Page 10
Chapter 9: Labor Markets
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Sample Questions
Q1) If employers are perfectly competitive profit maximizers then they hire labor until:
A) The VMPL equals the average total cost
B) The VMPL equals the average variable cost
C) The VMPL equals the wage
D) The VMPL is greater than the average fixed cost
Q2) What is the effect of a technological improvement that only affects some firms in the market?
Q3) Successful economic growth requires structural changes or
A) Changing the natural rate of unemployment
B) Shifts in the nature and location of economic activity
C) Increasing structural unemployment
D) Building new machines or factories
Q4) Agrarian employment arrangements use:
A) Higher paid permanent labor
B) Higher paid temporary workers
C) Lower paid permanent labor
D) Lower paid temporary workers
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11
Chapter 10: Investment and Financial Markets
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Sample Questions
Q1) When people invest they are
A) Buying stocks
B) Undertaking costly activities today with the hopes of returns in the future
C) Buying bonds
D) Selling bonds
Q2) The _________ of an investment's return is a measure of how much the possible returns vary above and below the expected return across states of the world.Among projects with the same expected return,those with higher variance are ___________.
A) Variance; less risky
B) The expected value; less risky
C) Expected value; more risky
D) Variance; more risky
Q3) What is the net return of an investment?
A) The total benefit from the investment asset
B) The total improvements in the investor's life circumstances from the investment
C) The difference between gross return and the operating and maintenance costs
D) The difference between the gross return and the interest rate
Q4) How do financial markets help economic growth?
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12
Chapter 11: International Markets and General Equilibrium
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Sample Questions
Q1) When purchasing power parity holds,it implies that the real exchange rate equal to
A) 1
B) 0
C) 100
D) nominal exchange rate.
Q2) Taxes imposed on imports are called ________.
A) excise tax
B) luxury tax
C) trade tax
D) tariff
Q3) In the Factor Proportions Model,suppose Home country is a labor-abundant country and Foreign country is a capital-abundant country,when trade between these two countries happens,the Factor Proportions Model indicates that ________.
A) the price of capital-intensive good will rise in Home country
B) the price of labor-intensive good will rise in Home country
C) the price of capital-intensive good will fall in Foreign country
D) the price of labor-intensive good will rise in Foreign country
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13
Chapter 12: Institutions and Cooperation
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Sample Questions
Q1) In standard games theory each player is assumed to derive utility only from current or future consumption with no concern for the impacts of their choice on others.This is called ________ preferences.
A) classical
B) neoclassical
C) behavioral
D) Lexicographic
Q2) In a two player non-cooperative game where neither player has a dominant strategy,
A) there is never a Nash equilibrium.
B) there can be multiple Nash equilibria.
C) there is only one Nash equilibrium.
D) the actual outcome is unpredictable.
Q3) The field of ________,in which researchers construct and test specific hypotheses regarding departures from neoclassical rationality.
A) behavioral economics
B) game theory
C) classical economics
D) neo-classical economics
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Page 14
Chapter 13: Policy Governance and Political Economy
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Sample Questions
Q1) According to figure 13.2 if the market is unregulated:
A) The private decision-maker only considers his marginal private benefit and the quantity consumed will be QP
B) The private decision-maker only considers his marginal private benefit and the quantity consumed will be Qs
C) The social decision-maker considers the marginal social benefit and the quantity consumed will be QP
D) The private decision-maker considers his marginal social benefit and the quantity consumed will be QP
Q2) Even in the absence of intervention by governments,people make many choices that contribute to development.Which of the following examples will not contribute to development?
A) Household save and invest to build a better future for their children
B) Households specialize and engage in mutually beneficial trade
C) Public good problems give way to free riders in infrastructure projects
D) Households use financial markets to cope with risk and vulnerability
Q3) Good policy implementation choices require varying combinations of what five key "inputs"?
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Chapter 14: Policy Analysis
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Sample Questions
Q1) Which of the following effects from a policy would be considered a feedback effect?
A) After a famer adopts a new technology food supply increases,which lowers the price he charges for selling his crop
B) A farmer adopts a new technology and enjoys better profits
C) Any effect on the well-being of groups other than the directly affected
D) All of the above are feedback effects
Q2) Which of the following is an example of an unintended consequence of a policy?
A) When a woman's role in family decision making triggers domestic violence
B) Increase sense of security/ decrease in vulnerability
C) Increased school attendance
D) Increased woman's role in family decision making
Q3) All of the changes in living conditions experienced by anyone in society as a result of a policies introduction are called__________.
A) Social benefit
B) Impacts
C) Social costs
D) Policy value
Q4) What are the fundamental objectives in policy analysis?
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Page 16
Chapter 15: Targeted Transfer Programs
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Sample Questions
Q1) Official transfer sizes are a measure of a transfer program's _______?
A) Marginal cost
B) Impact on the poor
C) Availability
D) Generosity
Q2) Conditional cash transfer programs differ from traditional targeted transfer programs in that they___________.
A) Require poor families to meet some means test threshold for poverty
B) Require poor families to do something to receive the money such as send kids to school
C) Conditional cash transfer payments suffer from many more leakages than traditional targeted transfer programs
D) Conditional cash transfer programs have do not encourage investments in human capital as traditional targeted transfers do
Q3) Although at first glance targeted transfer payments don't appear very "developmental" in recent years these programs have become very important.Why are targeted transfer programs a necessary part of development?
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Chapter 16: Workfare
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Sample Questions
Q1) According to figure 16.3which graph depicts a labor market that is categorized by under and unemployment?
A) Figure 16.3A
B) Figure 16.3B
C) Neither figure shows unemployment
D) There is unemployment in both figure A and B
Q2) Many workfare programs share one thing in common:
A) That they are capital intensive meaning they use a relatively small amount of labor relative to capital
B) That they are capital intensive meaning they use a relatively large amount of labor relative to capital
C) That they are labor intensive meaning they use a relatively small amount of capital relative to labor
D) That they are capital intensive meaning they use a relatively large amount of capital relative to labor
Q3) Under what conditions can workforce programs reduce vulnerability for workers?
Q4) Discuss the cost and benefits or raising a program wage.
Q5) Why do emergency employment programs get criticized for creating infrastructure of low quality or duration?
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Chapter 17: Agricultural Market Interactions and Reforms
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Sample Questions
Q1) How do quantitative export restrictions and an equivalent export tax rate differ?
A) There is no difference
B) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic consumers
C) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic exporters
D) Under an export tax money is generated for exporters and with quantitative restrictions money is generated for the government.
Q2) The model of profit-maximizing production decisions suggests that if fertilizer is an important input to rice production,then an increase in the fertilizer price _________ the quantity of rice that farmers _______ to the market at any price,shifting the local rice supply schedule to the ________.
A) Reduces; supply; left
B) Increases; supply; right
C) Increases; demand; left
D) Reduces; demand; left
Q3) How can an increase in the price of a good introduce intra-household effects?
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Page 19
Chapter 18: Infrastructure Policies and Programs
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Sample Questions
Q1) Use-rates among the poor may _________,all else equal,as fees ______,service quality _________,physical access to the services by the poor becomes _____________:
A) Rise; rise; falls; easier
B) Fall; decrease; falls; easier
C) Drop-off; rise; falls; more difficult
D) Rise; rise; fall; more difficult
Q2) What is volume targeting?
A) By far the least common approach for getting subsidies to the poor
B) May take the form of decreasing block tariffs
C) Average fees rise with the volume of services a household uses
D) An example would be when households pay a premium for the first quantities used then a lower price as more is consumed
Q3) Subsidies are:
A) Equal to expenditures less any revenue gathered by charging fees or requiring contributions
B) Equal to the total costs of investment operation and maintenance
C) Equal to the total costs of investment operation and maintenance plus fees charged for use
D) The cost of advertising the new services offered
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Chapter 19: Education
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Sample Questions
Q1) All of the following are reasons why a school based management system may fail to achieve its goals except:
A) The committee may not be given enough power to effectively manage the school
B) The committee may not be as motivated or have as much local information as government bureaucrats
C) The motivation of committee members may be less than ideal
D) All of the above are reasons a school based management system could fail
Q2) Household schooling opportunities are defined by supply-side and demand-side policy implementation outcomes.All of the following are Demand-side elements except?
A) Tuition
B) Cost of textbooks and other required materials
C) Any factor that influences a family's desire to send their children to school without influencing the nature of the services
D) Primary language of instruction
Q3) How have many low and middle income countries have achieved nearly universal primary enrollment according to the gross enrollment rates (GERs)presented in the text?
Q4) What are the potential benefits and costs of eliminating school fees?
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Chapter 20: Agricultural Research and Extension
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Sample Questions
Q1) Adoption rates of new technologies will tend to ________ for farms when output prices ___________ or when labor and fertilizer costs _______.
A) Increase; decrease; decrease
B) Increase; increase; decrease
C) Decrease; increase; increase
D) Decrease; decrease; decrease
Q2) Several studies have confirmed that as the time and effort needed to adopt new technology_________ farmers tend to ________,undertaking less experimentation of their own?
A) Increases; under-adopt
B) Increases; free-ride
C) Decreases; over-adopt
D) Decreases; under-adopt
Q3) How does the tacit nature of technological knowledge complicate the job of an extension agent?
Q4) What are some rationales for government intervention in agricultural research?
Q5) Discuss the direct and indirect effects of adopting a new agricultural technology.(Include at least 2 examples of positive effects and negative effects for each case).
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Chapter 21: Microfinance
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Sample Questions
Q1) Contemporary microfinance programs are incredibly diverse which of the following are the same for all MFIs?
A) Eligibility
B) Types and sizes of loans
C) Recruitment practices
D) Goal is to improve lives of poor people
Q2) The higher the ratio of revenue to operating costs for an MFI the ______ sustainable they are considered and the excess of revenue over operating costs is referred to as_______?
A) More; Profit
B) More; Inflation
C) Less; Loss
D) Less; Bankruptcy
Q3) As interest rates increase the cost of borrowing_____,profit for microenterpirses_____ and participation in microfinance programs__________?
A) increases; increases; increases
B) increases; decreases; decreases
C) decreases; decreases; increases
D) increases; stays the same; decreases
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Page 23
Chapter 22: Public Health, Health Care and Health Insurance
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Sample Questions
Q1) People experience health shocks when they:
A) Have a probability of contracting a disease
B) See a health care provider
C) Experience episodes of illness or injury
D) Die
Q2) When governments provide health insurance rather than providing the heakth services directly it represent a shift from __________ to ____________.
A) Supply side; demand side
B) Demand side; Supply side
C) Inefficiency; efficiency
D) Efficiency; inefficiency
Q3) In many experimental contexts,households exhibit ___________,or a tendency to value goods and services ________ when asked to give them up (e.g.when asked to sell them)than when offered an opportunity to acquire them (e.g.through purchase).?
A) Loss aversion; more
B) Loss aversion; less
C) Status quo aversion; more
D) Status quo aversion; less
Q4) How is the DALYs lost to a disease in a given year calculated?
Page 24
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