Economic Growth and Development Review
Questions
Course Introduction
This course examines the theories, determinants, and empirical patterns of economic growth and development across countries. Students will explore foundational models explaining why some nations attain higher income levels and living standards, and how economic policies, institutions, technology, and globalization influence long-term growth. The course also addresses challenges faced by developing economies, including poverty, inequality, structural transformation, population growth, and sustainability, while analyzing the impact of international trade, investment, and aid. Through case studies and quantitative analysis, students will gain insights into strategies for fostering inclusive and sustainable economic development.
Recommended Textbook
Economic Development 10th Edition by
Michael P. Todaro
Available Study Resources on Quizplus
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
Available Study Resources on Quizplus for this Chatper
22 Verified Questions
22 Flashcards
Source URL: https://quizplus.com/quiz/73967
Sample Questions
Q1) 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.
Q2) It is not possible for a country to experience
A)economic development without economic growth.
B)economic growth without economic development.
C)economic growth and economic development simultaneously.
D) both (a) and (b) are correct.
Answer: A
Q3) A good definition of the meaning of development is the
A)elimination of absolute poverty.
B)improvement in the quality of life.
C)fulfillment of the potential of individuals.
D) all of the above.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Comparative Economic Development
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/73968
Sample Questions
Q1) Why might the use of more advanced technology not be a sufficient condition for sustained economic growth?
Answer: It may require an inefficiently high capital labor ratio and complementary factors, especially education, may be lacking. Additional points depend on lecture coverage.
Q2) 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.
Q3) 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
Q4) What are the three major components of economic growth?
Answer: Capital accumulation, labor force growth, and technological progress.
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Classic Theories of Economic Growth and Development
Available Study Resources on Quizplus for this Chatper
31 Verified Questions
31 Flashcards
Source URL: https://quizplus.com/quiz/73969
Sample Questions
Q1) Which of the following is an assumption of the Lewis two-sector model?
A)Surplus labor in industry
B)Positive marginal product of labor in agriculture
C)An upward sloping labor supply curve in industry
D) None of the above
Answer: D
Q2) According to the theory of structural patterns of development, which of the following tends to occur as a country develops?
A)A shift from agriculture to industry and services
B)An increase in the percentage of income spent on food
C)Growth of the rural sector
D) A decline in trade as a share of GNP
Answer: A
Q3) Describe one important criticism of Rostow's stages of economic growth theory.
Answer: The stages are only necessary and not sufficient conditions, savings is too aggregate a measure, the theory does not take into account the constraints of the international economic order, and there are counter examples such as Argentina.
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Contemporary Models of Development and Underdevelopment
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/73970
Sample Questions
Q1) Explain how the government can help the economy avoid a coordination failure.
Q2) The Solow residual helps explain growth that derives from
A)increasing the size of the labor force.
B)increasing the size of the capital stock.
C)increasing the capital labor ratio.
D) anything except increases in the size of the labor force or the capital stock.
Q3) The Big-Push theory argues that coordination failures may arise because of A)pecuniary externalities.
B)technological externalities.
C)lack of human capital.
D) All of the above.
Q4) The new growth theory attempts to explain
A)the rate of population growth within a country.
B)the rate of capital accumulation within a country.
C)the factors that determine the size of the Solow residual.
D) why there are diminishing returns to capital.
Q5) According to the HRV growth diagnostic framework why is there no "one size fits all" development policy?
Q6) Explain how the S-curve reflects the typical nature of complementarities?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Poverty, Inequality, and Development
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/73971
Sample Questions
Q1) Developing countries who have adopted capital intensive technologies tend to have
A)relatively higher Gini coefficients.
B)relatively lower Gini coefficients.
C)Gini coefficients equal to one.
D) Gini coefficients equal to zero.
Q2) What are factor price distortions, and what are their major causes in developing countries?
Q3) According to Kuznets, in the process of development inequality in an economy will normally
A)first rise and then fall.
B)first fall and then rise.
C)remain about the same.
D) show no definite pattern.
Q4) Explain the difference between size and functional measures of income distribution.
Q5) Explain why a Lorenz curve can never lie to the left or above the 45 degree line.
Q6) "The 1980s were a lost decade for the absolutely poor." Evaluate this statement.
Q7) What is the Grameen Bank and what is its contribution to tackling rural poverty?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Population Growth and Economic Development:
Causes, Consequences, and Controversies
Available Study Resources on Quizplus for this Chatper
32 Verified Questions
32 Flashcards
Source URL: https://quizplus.com/quiz/73972
Sample Questions
Q1) Are developing countries experiencing a demographic transition much like the one developed countries did at their earlier stages of economic development or are there important differences?
Q2) Evidence suggests that population growth has negative effects on
A)economic growth.
B)poverty reduction.
C)environment.
D) education.
E) All of the above.
Q3) Evidence presented in the text suggests that birthrates among developing countries are lower with A)higher growth.
B)higher inequality.
C)higher GNP per capita.
D) All of the above.
Q4) The hidden momentum of population growth is caused by A)the demographic transition.
B)population age structure.
C)the opportunity cost of a woman's time.
D) children's contribution to income.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Urbanization and Ruralurban Migration: Theory and Policy
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/73973
Sample Questions
Q1) If the rural wage is 4 and the formal urban wage rate is 10, there will be rural to urban migration if the formal urban unemployment rate is A)50%.
B)60%.
C)70%.
D) all of the above.
Q2) Explain why policies designed to reduce urban unemployment may not greatly reduce poverty in developing countries.
Q3) How could the removal of labor market distortions increase employment even if the elasticity of factor substitution is very low?
Q4) The informal sector exhibits A)free entry.
B)labor intensive methods.
C)small, competitive firms.
D) all of the above.
Q5) Describe some of the causes of urban giantism in developing countries.
Q6) 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.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Human Capital: Education and Health in Economic Development
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/73974
Sample Questions
Q1) Explain why the education of girls is probably the most cost-effective development investment. Be sure to include in your answer some discussion of at least two of the following: absolute poverty; health and development; fertility; and agriculture.
Q2) Is child labor a problem in developing countries? Explain.
Q3) 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.
Q4) How can an increase in human capital lead to an increase in GDP? Why might it not lead to?an increase in GDP?
Q5) Although Progresa/Oportunidades has been successful in Mexico, why might a similar program not work elsewhere?
Q6) In developing countries higher educational facilities have tended to expand to the point where social benefits exceed private benefits. What is the economic explanation for this?
Q7) Why is eradicating child labor seen as an economic investment?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Agricultural Transformation and Rural Development
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/73975
Sample Questions
Q1) A program through which new ideas, methods, and advice are offered to farmers to increase farm yields is known as
A)agricultural extension.
B)agricultural mechanization.
C)an agrarian system.
D) land reform.
Q2) Describe briefly five major characteristics or problems of developing countries' agricultural sectors. Make reference to specific countries or regions where you can.
Q3) Sharecropping can be best understood as
A)a type of agreement preferred by peasants.
B)a type of agreement preferred by landlords.
C)a compromise between peasant and landlord preferences.
D) a type of agreement preferred by neither but given by tradition.
Q4) Explain the case for land reform in Latin America. Are there any potential negative effects? What steps could be taken to address these effects?
Q5) What are some of the specific policies aimed at improving the productivity of women farmers in Kenya?
Page 11
Q6) Is sharecropping economically efficient or inefficient? Explain.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: The Environment and Development
Available Study Resources on Quizplus for this Chatper
25 Verified Questions
25 Flashcards
Source URL: https://quizplus.com/quiz/73976
Sample Questions
Q1) International resources shared by all countries, such as oceans and air, are known as
A)global commons.
B)free rider problems.
C)nonrenewable resources.
D) cooperative resources.
Q2) In what way is better protection of the environment a possible result of successful development?
Q3) A resource that is publicly owned and allocated under a system of unrestricted access is known as
A)a socialist resource.
B)a collective resource.
C)a common property resource.
D) a transferable resource.
Q4) Provide a short definition of sustainable development.
Q5) A major cause of environmental degradation in developing countries is
A)debt-for-nature swaps.
B)poverty.
C)a lack of public transportation.
D) land reform.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Development Policymaking and the Roles of
Market, State, and Civil Society
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/73977
Sample Questions
Q1) Why must projects be appraised? What do we learn from project appraisals?
Q2) Explain what is meant by market failure.
Q3) 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?
Q4) In what ways may social evaluations of costs and benefits differ from those implied by market prices? Explain carefully.
Q5) What economic benefits might a developing country gain by reducing corruption? Discuss only economic benefits and provide examples from specific developing countries.
Q6) What is the primary composition/ownership pattern of the private sector in most developing countries?
Q7) Which of the following factors has led to poor plan performance?
A)unanticipated changes, such as in terms of trade
B)corruption of government officials
C)foreign firms are less subject to the constraints of the plan than domestic ones
D) all of the above
E) none of the above
Q8) How does the Washington Consensus differ from the Santiago Consensus?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: International Trade Theory and Development Strategy
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/73978
Sample Questions
Q1) The long-run social benefits of infant industry protection are more likely to be realized if
A)investors believe that tariff barriers are permanent.
B)investors believe that tariff barriers are transitory.
C)tariff barriers increase over time.
D) tariff barriers are replaced with quotas over time.
Q2) What is an overvalued exchange rate? What factors may cause a country's currency to become overvalued?
Q3) Which of the following countries provides the best example of a successful import substitution development strategy?
A)Chile
B)Taiwan
C)Argentina
D) Botswana
Q4) According to the Prebisch-Singer thesis
A)demand for primary products has steadily fallen.
B)profits of primary producers have steadily fallen.
C)primary producers' terms of trade have steadily fallen.
D) prices of primary products have risen over time.
Q5) Briefly explain the major argument of the factor endowment trade theory.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Balance of Payments, Developing-Country
Debt, and the Macroeconomic Stabilization Controversy
Available Study Resources on Quizplus for this Chatper
33 Verified Questions
33 Flashcards
Source URL: https://quizplus.com/quiz/73979
Sample Questions
Q1) 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.
Q2) An IMF official was quoted as acknowledging that the Fund's stabilization packages have often led to adjustment without growth. However, he said, "the Fund is a firefighter, not a carpenter, and you cannot expect the firefighter to rebuild the house as well as put out the fire." Provide a balanced evaluation of this statement.
Q3) 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
Q4) Outline the principal sources of the debt crisis.
Q5) 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.
Q6) Why may the debt crisis be only "sleeping," rather than "dead?"
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Foreign Finance, Investment, and Aid: Controversies and Opportunities
Available Study Resources on Quizplus for this Chatper
34 Verified Questions
34 Flashcards
Source URL: https://quizplus.com/quiz/73980
Sample Questions
Q1) Suppose an MNC subsidiary buys 100 input units from its parent at a price of $2 each. It has $300 in additional production costs, and sells its 100 units of output for $6 to the MNC. It pays a 25% local profit tax. The MNC sells the output at home for $8, and its cost of producing inputs is $1. It pays a profit tax of 20% at home on repatriated profits. What is the subsidiary net profit, assume no selling costs at home? What is the MNC's total profit from the operation?
Q2) State three major potential advantages of foreign direct investment for a developing country. State three major potential disadvantages.
Q3) With tied aid
A)MNC investment depends on tax concessions.
B)aid recipients must use the aid to purchase goods and services from the donor.
C)aid recipients must follow World Bank/IMF conditionality.
D) all of the above.
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.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Finance and Fiscal Policy for Development
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/73981
Sample Questions
Q1) What is meant by the term dynamic incentives in the context of making loans to micro borrowers.
Q2) A development bank
A)accepts deposits from the poor.
B)makes loans for industry expansion.
C)is an agency such as the World Bank.
D) all of the above.
E) none of the above.
Q3) Which of the following is an objective of macroeconomic stabilization?
A)Eliminating current account deficits
B)Controlling inflation
C)Restoring fiscal balance
D) All of the above
Q4) Macroeconomic stabilization involves
A)reduction of inflation.
B)reduction of government budget deficits.
C)reduction of trade deficits.
D) all of the above.
E) none of the above.
Q5) Explain how group lending works.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Some Critical Issues for the Twenty-First
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/73982
Sample Questions
Q1) "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).
Q2) What is the relationship between land reform and rain forest preservation?
Q3) Gases that trap heat within the earth's atmosphere and can thus contribute to global warming are known as ______ gases.
A)polluting
B)greenhouse
C)noxious
D) All of the above.
E) None of the above.
Q4) Explain how the cost of rain forest preservation can be lowered for developing countries?
Q5) Maintaining the rain forest is very important because of A)its absorptive capacity for CO emissions.
B)maintaining agricultural production of countries dependent on the rain forest, such as Brazil.
C)ensuring a successful land reform policy.
D) all of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 18