Course Introduction
Development Economics
Test Preparation
Development Economics examines the economic aspects of the development process in low- and middle-income countries. The course explores theories and empirical evidence on topics such as poverty alleviation, income inequality, economic growth, education, health, labor markets, and the role of institutions. Students will analyze the effectiveness of policies and interventions aimed at promoting sustainable development, using both quantitative and qualitative methods. Through case studies and real-world data, the course provides a comprehensive understanding of the challenges and strategies in fostering economic progress and improving living standards in developing regions.
Recommended Textbook
Economics of Development Seventh Edition by Dwight
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20 Chapters
548 Verified Questions
548 Flashcards
Source URL: https://quizplus.com/study-set/1842
H. Perkins
Page 2
Chapter 1: Patterns of Development
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) Which indicator is inversely related (meaning that it falls as per capita income rises)to per capita income?
A) adult illiteracy rate
B) infant mortality rate
C) share of the population living in rural areas
D) all of the above
Answer: D
Q2) By the World Bank's classification system,Malaysia,Iran,and Brazil are:
A) low-income countries.
B) upper-middle-income countries.
C) industrial economies.
D) backward economies.
Answer: B
Q3) Which of the following statements is true about globalization?
A) It is a term used by different people to mean different things.
B) It covers more than just economics.
C) It is not a new phenomenon.
D) All of the above.
Answer: D
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Page 3
Chapter 2: Measuring Economic Growth and Development
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) One of the problems in measuring GDP is that family farm production of food for personal consumption is not included; this is illustrated by the problem of calculating Cambodia's GDP where unpaid family workers represent:
A) 75 percent of the labor force.
B) 57 percent of the labor force.
C) 33 percent of the labor force.
D) 9 percent of the labor force.
Answer: C
Q2) The human development index is a composite of three basic measures of human welfare.Which of the following is NOT a component of the human development index?
A) life expectancy
B) dollars of income
C) infant mortality rate
D) years of schooling
Answer: C
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Chapter 3: Economic Growth: Concepts and Patterns
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26 Verified Questions
26 Flashcards
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Sample Questions
Q1) In order for sustained economic growth to be successful,the centerpiece to the growth process in most countries must be its:
A) agricultural policies.
B) export policies.
C) industrial production methods.
D) military strength.
Answer: A
Q2) Malaysia's growing life expectancy over the past generation can be largely attributed to:
A) new hybrid crops.
B) a serious reduction in the incidence of malaria.
C) the widespread production and consumption of organic foods.
D) the eradication of tuberculosis.
Answer: B
Q3) Being landlocked means that:
A) growth is impossible.
B) there will be great challenges in the development of external trade.
C) foreign aid is needed.
D) new advances in technology are not beneficial.
Answer: B
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Chapter 4: Theories of Economic Growth
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) Solow model,isoquants
Q2) When an economy increases the amount of capital per worker,it is called:
A) capital widening.
B) capital deepening.
C) labor widening.
D) labor deepening.
Q3) Growth depends on which two processes?
A) accumulation of assets and making those assets more productive
B) harnessing natural resources and marketing them to developed nations at a "fair trade" rate
C) exploitation of the agricultural sector in order to advance industrialization
D) engaging in free trade while subsidizing domestic agricultural and industrial production
Q4) Suppose the saving rate for a low-income country is given.If production becomes less capital intensive,the ICOR will ________ and the growth rate will _________.
A) increase; increase
B) decrease; increase
C) decrease; decrease
D) increase; decrease
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Chapter 5: States and Markets
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29 Verified Questions
29 Flashcards
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Sample Questions
Q1) Structural adjustment,economic distortions
Q2) Shock therapy,gradualist approach
Q3) The Soviet Union was attractive to developing countries because:
A) it was very effective at producing and supplying consumer goods.
B) it had transformed a backward economy into an industrial powerhouse that defeated the strongest military in the world-Nazi Germany.
C) Lenin's Capitalism, the Highest Stage of Imperialism was a best-seller in their nations.
D) the people were fascinated with the idea of becoming technocrats.
Q4) After World War II,many leaders of former British colonies,who had been educated at British universities,espoused:
A) strong monarchical views.
B) Keynesian economic doctrines.
C) Fabian socialist views.
D) Peronist economic and leadership values.
Q5) Big push,backward linkages
Q6) West Pakistan,East Pakistan
Q7) Hard governments,soft governments
Q8) Pareto optimality,aid to the poor
Page 7
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Chapter 6: Inequality and Poverty
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24 Verified Questions
24 Flashcards
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Sample Questions
Q1) Kuznets,Lewis
Q2) According to W.Arthur Lewis's surplus labor model,inequality is not just a necessary effect of economic growth; it is
A) the cause of human suffering and exploitation.
B) a cause of growth.
C) an unintended consequence of modern developmental economics.
D) the leading cause of falling wages.
Q3) Washington Consensus,1990 World Development Report
Q4) National poverty line,global poverty line
Q5) Head-count index,poverty gap
Q6) To draw a Lorenz curve showing the distribution of income by household,one should first rank all households according to:
A) household size.
B) age of head of household.
C) wage level.
D) income or consumption level.
Q7) Lorenz curve,Gini coefficient
Q8) Trade liberalization,anti-globalization
Q9) Income transfers,social safety nets
Q10) $1.00 a day,$1.25 a day Page 8
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Page 9
Chapter 7: Population
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26 Verified Questions
26 Flashcards
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Sample Questions
Q1) The total fertility rate in Nigeria was 5.7 in 2009.This means that:
A) there were 5.7 live births per 100 women of childbearing age.
B) there were 5.7 live births per 100 women.
C) there were 5.7 live births per 100 people.
D) given prevailing age-specific fertility rates, the average woman in Nigeria bears 5.7 children during her reproductive years.
Q2) By 2008,Finland had reached the fourth stage of its demographic transition,in which its population growth had fallen close to:
A) 5 percent.
B) 2.2 percent.
C) 0 percent.
D) -7.5 percent.
Q3) Infant death rate,life expectancy
Q4) China,India
Q5) Family planning,state versus personal choice
Q6) New household economics,child quality
Q7) Implicit costs of children,explicit costs of children
Q8) Coale-Hoover model,capital widening
Q9) Rate of natural increase,decline in fertility
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Chapter 8: Education
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) In low-income countries,the demand for education:
A) remains high across all segments of the population.
B) is confined mostly to urban areas.
C) is confined mostly to social elites, both urban and rural.
D) is not very strong, due to poverty and hopelessness.
Q2) Uniforms,students
Q3) In low-income countries,the social rate of return generally is highest for investment in:
A) university education.
B) primary education.
C) vocational education.
D) adult education.
Q4) Explicit costs of schooling,implicit costs of schooling
Q5) Health,education
Q6) The social return to educating women may exceed that of educating men for all of the following reasons EXCEPT:
A) educating women reduces child mortality.
B) educating women reduces fertility.
C) educating women reduces the spread of HIV/AIDS.
Page 11
D) educating women leads them to earn a higher income than men.
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Chapter 9: Health
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) Tuberculosis (TB),directly observed treatment short course (DOTS)
Q2) Health has improved worldwide due to all the following major reasons EXCEPT:
A) improved advances in food distribution.
B) improvements in education.
C) vaccine development for tropical diseases.
D) public health discoveries.
Q3) According to a famous study on the impact of rising incomes on health,a 10 percent increase in income is associated with which percent decline in child mortality rates?
A) 2-4 percent
B) 8-10 percent
C) 15-20 percent
D) 100 percent
Q4) HIV/AIDS,antiretroviral drugs (ARVs)
Q5) In developing countries,major gains in life expectancy have been achieved primarily by reducing mortality rates for which population group?
A) the elderly
B) rural workers
C) the very young
D) women of childbearing age
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Chapter 10: Investment and Savings
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) Public investment,externality
Q2) By 2010,half of all FDI in developing countries went to:
A) 10 countries.
B) 27 countries.
C) 60 countries.
D) 102 countries.
Q3) Income tax incentives,labor-intensive industries
Q4) Investment,growth
Q5) When a private firm undertakes investment analysis,it conducts:
A) risk aversion strategy.
B) commercial project appraisal.
C) a random walk.
D) asymmetric information analysis.
Q6) Multinational corporations:
A) avoid spillovers whenever possible.
B) often encourage horizontal spillover.
C) often encourage vertical spillover.
D) encourage both horizontal and vertical spillover.
Q7) Positive spillover,negative spillover
Q8) Foreign savings,domestic savings
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Chapter 11: Fiscal Policy
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27 Verified Questions
27 Flashcards
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Sample Questions
Q1) As usually applied,the value-added tax (VAT)is a:
A) form of excise tax.
B) tax on income.
C) tax on consumption.
D) tax on domestic production.
Q2) Neutral tax,efficient tax system
Q3) Personal tax,corporate tax
Q4) Tax rates,tax evasion
Q5) The term public good refers to a good or service that:
A) results in income and profit.
B) is free and portable.
C) has a value of zero.
D) exhibits nonrival consumption and nonexcludability.
Q6) In developing countries,borrowing domestically often means borrowing directly from the:
A) World Bank.
B) central bank.
C) the IMF.
D) other nations in the geographic region.
Q7) State-owned enterprises (SOEs),subsidies
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Chapter 12: Financial Development and Inflation
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29 Verified Questions
29 Flashcards
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Sample Questions
Q1) Medium of exchange,M2
Q2) Policies for financial deepening seek to promote ________ in the real size of the financial system,while shallow finance promotes ________ in the real size of the financial system.
A) growth; reduction
B) reduction; growth
C) stability; measured growth
D) deflation; retraction
Q3) What,particularly in a developing country,is the most visible and vital component of the financial system (as acceptor of deposits and grantor of shorter-term credit)?
A) investment banking
B) commercial banking
C) foreign investors
D) hedge funds
Q4) Shallow finance,informal credit market
Q5) International reserves,value of imports
Q6) Real interest rate,deep finance
Q7) Financial assets,nonfinancial assets
Q8) Open-market operations,moral suasion
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Chapter 13: Foreign Debt and Financial Crises
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27 Verified Questions
27 Flashcards
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Sample Questions
Q1) The economic impact of debt flows is magnified by their effect on all of the following EXCEPT:
A) macroeconomic stability.
B) the exchange rate.
C) World Bank transparency.
D) government budgets.
Q2) From 1980-1982,private creditors provided more than $50 billion a year in new lending to developing countries; by 1987,the net resource flow was:
A) $1 billion.
B) $559 million.
C) $125 million.
D) practically zero.
Q3) Which of the following is NOT used as a debt sustainability indicator?
A) NPV/GDP
B) debt/exports
C) short-term foreign debt/foreign exchange reserves
D) number of illiquid borrowers
Q4) External transfer problem,internal transfer problem
Q5) Moral hazard,standstill
Q6) Odious debt,Spanish-American War
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Chapter 14: Foreign Aid
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) Commitment to development index,foreign aid
Q2) True or False: Being a former colony substantially increases the probability of receiving aid flows.
A) True
B) False
C) True only for former colonies of Great Britain
D) True only for older colonies
Q3) In terms of total amount,which country gives the most aid?
A) United States
B) Japan
C) United Kingdom
D) Norway
Q4) When the U.S.government provides a grant to purchase military equipment:
A) it counts as foreign aid.
B) it does not count as foreign aid.
C) it depends; sometimes it counts as foreign aid.
D) it counts as private assistance.
Q5) Iraq,motivations for aid
Q6) Bilateral assistance,multilateral assistance
Q7) Future of aid,recipient participation
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Chapter 15: Managing Short-Run Crises in an Open Economy
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30 Verified Questions
30 Flashcards
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Sample Questions
Q1) The two main policy approaches for correcting macroeconomic imbalances are:
A) changes in aggregate expenditure and adjustments to the exchange rate.
B) changes in expenditure and price controls.
C) adjustments to the exchange rate and price controls.
D) price controls and trade restrictions.
Q2) The defining characteristic of equilibrium in the Australian model is that:
A) the economy is operating on its production frontier.
B) the market for nontradables is in equilibrium.
C) the market for tradables is in equilibrium.
D) both the market for nontradables and the market for tradables are in equilibrium.
Q3) The domestic price of a tradable good is determined by which equation?
A) Pt = e/P*t
B) Pt = P*t/e
C) Pt = eP*t
D) Pt = e -P*t
Q4) International Monetary Fund,balance of trade
Q5) Tradable goods,real exchange rate
Q6) Exchange-rate anchor,monetary policy
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Q7) Internal balance,external balance
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Chapter 16: Agriculture and Development
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Sample Questions
Q1) Marginal product of labor,average product
Q2) Food and Agricultural Organization (FAO),food price shock
Q3) Subsistence level,institutionally fixed wage
Q4) Among the poor households of developing countries,household food expenditures amount to:
A) 25% of income.
B) 30-50% of income.
C) 50-70% of income.
D) 90% of income.
Q5) The argument that the proportion of income spent on food declines as income rises is known as:
A) Say's Law.
B) the Malthusian trap.
C) Engel's law.
D) health consciousness.
Q6) Agricultural output per worker,nonagricultural output per worker
Q7) Agricultural productivity,technical change
Q8) Subsistence-oriented farmers,market-oriented farmers
Q9) Structural transformation,Engel's Law
Q10) Intersectoral linkages,indirect linkages Page 19
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Page 20
Chapter 17: Agricultural Development: Technology, policies, and Institutions
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) Share cropping is the dominant farming contractual arrangement in:
A) South Asia.
B) Latin America.
C) the Middle East.
D) sub-Saharan Africa.
Q2) Planting and harvesting time,the lean season
Q3) Before the 1950s,agriculture in nearly all developing countries relied on:
A) hybrid crops and irrigation.
B) traditional technologies and crop varieties.
C) the new and emerging Green Revolution.
D) grants and charity provided by the developed nations of the world.
Q4) Traditional agriculture,Green Revolution
Q5) Fixed-rent tenancy,share cropping
Q6) The Green Revolution has had the least impact thus far in:
A) East Asia.
B) Latin America.
C) West Asia.
D) sub-Saharan Africa.
Q7) Technical ceiling,technology diffusion
Q8) Perennial crops,livestock systems Page 21
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Page 22
Chapter 18: Trade and Development
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) Export pessimism,relative price movements
Q2) Dutch disease,exchange rates
Q3) Tariff escalation makes it harder for developing nations to move up the value-added ladder by imposing higher tariffs on imports of ________ than on
A) raw materials; processed goods
B) processed goods; raw materials
C) primary goods; secondary goods
D) natural resources; finished products
Q4) Politics,resource traps
Q5) ________ prices are domestic prices without trade.
A) Autarky
B) Commodity
C) Absolute
D) National
Q6) Absolute advantage,comparative advantage
Q7) Tradable goods,nontradable goods
Q8) Geographic location,trade
Q9) Primary products,manufactured goods
Q10) Openness to trade,rate of growth in GDP per capita Page 23
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Page 24
Chapter 19: Trade Policy
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) Trade liberalization,benefits of exporting
Q2) What was GATT?
A) an international organization that oversaw multilateral trade negotiations and tariff policies
B) a voluntary export-restriction agreement governing international trade in textiles
C) a free-trade area in southeast Asia
D) an Eastern European trading bloc that disbanded in the early 1990s
Q3) Outward-looking strategy,global market
Q4) Import substitution,infant industry
Q5) The essence of outward-looking development is that it:
A) relies on primary exports until domestic industry is efficient enough to compete in export markets.
B) gets prices right and lets the free market dictate the development of manufactured exports.
C) establishes an incentive system that induces firms to seek export markets.
D) subsidizes export-oriented manufacturing firms.
Q6) GATT,most-favored-nation principle
Q7) Rent seeking,import licensing
Q8) Import quota,deadweight loss
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Chapter 20: Sustainable Development
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Sample Questions
Q1) The relationship between levels of pollution and levels of income generally follows an inverted-U shape and is commonly called the:
A) pollution-level Laffer curve.
B) environmental Kuznets curve.
C) sustainability Lorenz curve.
D) atmospheric Engel curve.
Q2) The ________ suggests that a sustainable development path for countries that depend on nonrenewable resources requires the rents from those resources to be continually invested rather than consumed.
A) Hartwick rule
B) Solow growth model
C) Malthus theory
D) Ricardo rule
Q3) Adjusted net saving is equal to gross saving minus both the depreciation of made capital and the depreciation of:
A) resource surpluses.
B) natural capital.
C) trade assets.
D) reserve capital.
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