Development Economics Review
Questions
Course Introduction
Development Economics explores the economic aspects of the development process in low- and middle-income countries, focusing on the causes and solutions to poverty, inequality, and economic stagnation. The course covers theories of economic development, the role of institutions and policy, issues such as education, health, population growth, and international trade, as well as the impacts of globalization and foreign aid. Through case studies and empirical data, students will analyze the effectiveness of various development strategies and gain insight into current challenges and debates in the field.
Recommended Textbook
Economic Development 10th Edition by
Michael P. Todaro
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16 Chapters
500 Verified Questions
500 Flashcards
Source URL: https://quizplus.com/study-set/3713
Page 2
Chapter 1: Economics, Institutions, and Development: a Global Perspective
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22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/73967
Sample Questions
Q1) Which of the following demonstrates international interdependence?
A)the oil shocks
B)the debt crisis
C)global warming
D) all of the above.
Answer: D
Q2) What are the most important characteristics that have shaped Brazil's economic and social progress during the last three decades?
Answer: Discussion should include the large degree of income inequality, the need for land reform as a result of the dualistic nature of the land tenure system and the environmental challenge faced by what is one of the world's most environmentally diverse countries.
Q3) Development economics is the study of the
A)alleviation of absolute poverty.
B)transformation of institutions.
C)allocation of resources in developing countries.
D) all of the above.
Answer: D
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Chapter 2: Comparative Economic Development
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39 Verified Questions
39 Flashcards
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Sample Questions
Q1) Which of the following is not a middle-income country?
A)Brazil
B)Thailand
C)Pakistan
D) Argentina
Answer: C
Q2) The dependency burden is
A)a measure of the degree to which the less developed countries are dependent on the rich industrial countries.
B)the average number of children that a woman gives birth to during her lifetime.
C)the number of babies born per 1000 persons.
D) the percent of the population that is below 15 and above 65 years of age.
Answer: D
Q3) What are the three major components of economic growth?
Answer: Capital accumulation, labor force growth, and technological progress.
Q4) What are the three main indicators that make up the Human Development Index?
Answer: Life expectancy, educational attainment, GDP per capita measured in PPP terms.
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4
Chapter 3: Classic Theories of Economic Growth and Development
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) What are the key assumptions of the Lewis model that give rise to its conclusions? How would the theory's conclusions differ if these assumptions do not hold?
Answer: There may be a variety of answers depending on what was emphasized in the lecture. The answer should include the existence of surplus labor in the rural sector that guarantees an infinitely elastic labor supply in industry until the surplus is exhausted and a propensity to save by industrialists equal to one. The lack of rural surplus labor (and infinite labor supply) would imply that when industrialists reinvest their profits there is no guarantee that their surplus increases. A low marginal propensity to save by industrialists puts a break on the labor transfer process.
Q2) Explain the concept of the "idea gap" in development economics.
Answer: Developing countries lack knowledge, information, and skills for production and productivity in comparison to more-developed countries.
Q3) Describe some of the advantages and disadvantages of each of the following schools: linear stages, structural change, dependence, and neoclassical.
Answer: Discussed in detail in the chapter and in the comparative case study at the end of the chapter.
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Page 5
Chapter 4: Contemporary Models of Development and Underdevelopment
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21 Verified Questions
21 Flashcards
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Sample Questions
Q1) According to the HRV growth diagnostic framework why is there no "one size fits all" development policy?
Q2) Based on the HRV growth diagnostic framework and the case study in Box 4.2, what are the binding constraints faced by Brazil, El Salvador, and the Dominican Republic and how can these constraints be overcome?
Q3) In contrast to the earlier neoclassical models of economic growth, in endogenous growth models, there is more emphasis on A)human capital.
B)externalities.
C)increasing returns to scale.
D) All of the above.
Q4) Explain the basic idea behind the Big Push model?
Q5) The O-ring theory places emphasis on A)education of the labor force.
B)skill complementarities.
C)purchases of machinery and equipment by firms.
D) None of the above.
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Q6) What three factors distinguish models of endogenous growth from their neoclassical counterparts?
Chapter 5: Poverty, Inequality, and Development
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) The Gini coefficient provides a measure of
A)the level of poverty.
B)the level of relative inequality.
C)disguised unemployment.
D) the rate of growth.
Q2) Which of the following groups is (are) more likely to be poor?
A)Minorities
B)Indigenous people
C)Women
D) All of the above.
Q3) Higher-income countries tend to have lower levels of absolute poverty because they A)have more employment opportunities.
B)have more public assistance.
C)have greater entrepreneurship opportunities.
D) All of the above.
Q4) Generally speaking, higher-income countries tend to have less income inequality than low-income countries, however this does not always hold true. What could cause a low-income country to have low-income inequality?
Q5) What is the Grameen Bank and what is its contribution to tackling rural poverty?
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Chapter 6: Population Growth and Economic Development:
Causes, Consequences, and Controversies
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32 Verified Questions
32 Flashcards
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Sample Questions
Q1) The number of live births per 1000 people in the population per year is the
A)hidden momentum of population growth.
B)population growth rate.
C)demographic transition.
D) crude birth rate.
Q2) What is meant by the demographic transition? What are the differences in the demographic transition between the current developed economies and developing countries?
Q3) Which of the following would most likely reduce the birthrate?
A)public health improvements
B)an increase in child mortality
C)a decline in the availability of secondary education
D) a reduction in the opportunity cost of a woman's time
E) All of the above.
Q4) Provide a concise statement about the relationship between population growth and absolute poverty, female wages, rural-urban migration, availability of pensions, availability of healthcare, availability of education, and rate of investment.
Q5) China has adopted a unique approach to the population growth problem. Please explain. Have they been successful? Please explain.
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Chapter 7: Urbanization and Ruralurban Migration: Theory and Policy
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23 Verified Questions
23 Flashcards
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Sample Questions
Q1) Rural-urban migrants differ from the rest of the rural population in that they are more likely to be
A)well educated.
B)poor.
C)female.
D) All of the above.
Q2) An argument supporting promotion of the urban informal sector is A)the formal sector is incapable of providing enough employment. B)informal sector workers are poorly educated.
C)it uses a relatively high capital intensity.
D) it would reduce urban bias.
Q3) Point out the main differences in job conditions and worker characteristics between the urban formal and informal sectors.
Q4) Discuss the importance of rural-urban migration as a source of urban population growth in various parts of the developing world, being as specific as you can.
Q5) Explain what is meant by urban bias. What are the major effects of urban bias?
Q6) How could the removal of labor market distortions increase employment even if the elasticity of factor substitution is very low?
Page 9
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Chapter 8: Human Capital: Education and Health in Economic Development
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34 Verified Questions
34 Flashcards
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Sample Questions
Q1) Human capital is best defined as A)the amount of wealth people have.
B)the amount of money people have to spend on schooling.
C)human capacities that raise productivity.
D) the average education level of the population.
Q2) Studies show that improved education of women in developing countries leads to A)lower infant mortality.
B)better designed, market based development policies.
C)lower international dependence.
D) all of the above.
Q3) Why do you think Uganda has been so successful at decreasing the prevalence of HIV/AIDS?
Q4) Developing countries have not benefited as much as expected from their higher education programs because of A)lack of program focus on the needs of the country. B)increasing returns to scale in each individual's education. C)graduates getting jobs in the private sector.
D) all of the above.
Q6) Is child labor a problem in developing countries? Explain. Page 10
Q5) Why is eradicating child labor seen as an economic investment?
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Chapter 9: Agricultural Transformation and Rural Development
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30 Verified Questions
30 Flashcards
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Sample Questions
Q1) In South Asia and Sub-Saharan Africa, about what share of output is contributed by agriculture?
A)one tenth
B)one fifth
C)two fifths
D) one half
Q2) What are the primary determinants of agricultural labor productivity?
Q3) Explain the case for land reform in Latin America. Are there any potential negative effects? What steps could be taken to address these effects?
Q4) Is sharecropping economically efficient or inefficient? Explain.
Q5) In which of these developing regions has food production per capita steadily fallen over the last quarter century?
A)Africa
B)East Asia
C)South Asia
D) Latin America
Q6) What are some of the specific policies aimed at improving the productivity of women farmers in Kenya?
Q7) Explain the concept, goals, and methods of integrated rural development.
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Chapter 10: The Environment and Development
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) The portion of a country's overall assets that is directly related to the environment, such as forests and soil quality, is known as
A)environmental capital.
B)debt-for-nature swaps.
C)protected areas.
D) common property assets.
Q2) Explain what developed countries can do to respond constructively to the environmental damage being done in developing countries.
Q3) In what way is better protection of the environment a possible result of successful development?
Q4) An example of a biomass fuel is A)coal.
B)nuclear fuel.
C)manure.
D) oil.
Q5) Discuss the relationship between poverty, growth, and the environment.
Q6) Describe the costs of deforestation.
Q7) Provide a short definition of sustainable development.
Q8) Describe the costs of water pollution.
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Chapter 11: Development Policymaking and the Roles of
Market, State, and Civil Society
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Explain what is meant by market failure.
Q2) Sectors where the development process leads to a more rapid expansion of demand than supply in goods or factor markets are known as
A)the crisis in planning.
B)input-output analysis.
C)bottlenecks.
D) infant industries.
Q3) A shadow price is
A)the price in the previous period.
B)the price in the next period.
C)the social value of a good or service.
D) the market value of a good or service.
E) none of the above.
Q4) What is the primary composition/ownership pattern of the private sector in most developing countries?
Q5) Why must projects be appraised? What do we learn from project appraisals?
Q6) Name <<some number>> of the ten points of the Washington Consensus. What is missing from this list? Did the Santiago Consensus address what was missing?
Page 14
Q7) How does the Washington Consensus differ from the Santiago Consensus?
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Chapter 12: International Trade Theory and Development Strategy
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Which of the following is a nontariff barrier policy tool?
A)Sanitary regulations
B)Average duties
C)Phased liberalization
D) Ad valorem tax
Q2) Which of the following is not a reason why the prospects for the further expansion of developing country commodity exports is likely to be limited?
A)Low income elasticities for these products
B)Low likelihood of development of further synthetic substitutes
C)Continued agricultural protection despite trade agreements
D) Declining terms of trade
Q3) The most important role of the World Trade Organization is
A)to promote market oriented economic policies.
B)to settle trade disputes.
C)to provide development assistance.
D) to help countries choose the appropriate level of a tariff or quota.
Q4) Explain why a country's gains from trade may not accrue to nationals. Indicate the differential effects on GNP and GDP.
Q5) Explain the difference between nominal and effective tariffs.
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Chapter 13: Balance of Payments, Developing-Country
Debt, and the Macroeconomic Stabilization Controversy
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33 Verified Questions
33 Flashcards
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Sample Questions
Q1) Exchange of developing country debt (at a discount) for private ownership of state-owned assets is called
A)debt-equity swaps.
B)debt restructuring.
C)the Brady Plan.
D) debt-nature swaps.
Q2) Which of the following was not a factor contributing to the debt crisis in Latin America?
A)The oil shocks
B)Trade liberalization in many developing countries
C)An increase in global interest rates.
D) A lack of investment opportunities in the developed countries
E) All of the above
Q3) Consider debt-equity swaps as an approach to debt reduction. Briefly describe how this works. State two arguments in favor of significant reliance on this strategy and two arguments against.
Q4) What is meant by the term odious debt?
Q5) Explain how a devaluation is supposed to reduce the external debt of a developing country. Give two reasons why a devaluation may be less effective than expected.
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Chapter 14: Foreign Finance, Investment, and Aid: Controversies and Opportunities
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34 Verified Questions
34 Flashcards
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Sample Questions
Q1) Which of the following is an argument against MNCs?
A)A reduction in inequality
B)An increase in the use of labor intensive technology
C)A deterioration of the balance of payments accounts
D) An increase in government tax revenue
E) None of the above
Q2) The developing area receiving the largest share of direct foreign investment is/are
A)Africa.
B)Asia
C)Latin America.
D) transition economies.
Q3) Why does multinational corporation investment not necessarily offer the advantage of domestic employment expansion?
Q4) Which of the following is not a type of portfolio investment?
A)Investment in stocks
B)Multinational corporation investment
C)Investment in commercial paper
D) All are types of portfolio investment.
E) None are types of portfolio investment.
17
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Chapter 15: Finance and Fiscal Policy for Development
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Among the rationales for state-owned enterprises is
A)the existence of a monopoly.
B)the need for capital formation.
C)the desirability of national control over strategic sectors of the economy.
D) all of the above.
E) none of the above.
Q2) Among the rationales for state-owned enterprises is
A)that the private sector is inefficient.
B)that there is unemployment of capable managers.
C)desirability of national control over strategic sectors of the economy.
D) all of the above.
E) none of the above.
Q3) What are the major market failures that imply a potential role for state intervention in financial markets?
Q4) Describe the costs and benefits of privatization of state-owned enterprises. In which cases would privatization seem most advisable?
Q5) Discuss the pros and cons of the recent introduction and expansion of stock markets in the developing countries.
Q6) Why do NGOs target women borrowers while making microloans?
Page 18
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Chapter 16: Some Critical Issues for the Twenty-First
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19 Verified Questions
19 Flashcards
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Sample Questions
Q1) The economic transition refers to A)transition from a less to a more-developed country. B)transition from central planning to market economy. C)countries that have some developed and some less-developed characteristics. D) all of the above. E) none of the above.
Q2) "The 1980s was a lost decade for the absolutely poor." Evaluate this famous statement.
Q3) "We have a long way to go in development, but we have already come very far." Justify both halves of this statement with reference to any statistics you remember (you may approximate).
Q4) Evidence of global warming is controversial as is its connection to rain forest destruction. Therefore, what is the case for a policy that affects developing countries' decisions regarding environmental preservation?
Q5) The first Earth Summit of 1992 was held in A)Kyoto. B)Rio de Janeiro. C)Johannesburg. D) Beijing.
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