Global Economic Development Review
Questions
Course Introduction
Global Economic Development examines the patterns, theories, and challenges of economic growth and development across the world. The course explores the historical context and current issues that influence economic disparities among nations, including globalization, poverty, inequality, trade, investment, and environmental sustainability. Students will analyze the roles of international organizations, policy frameworks, and local institutions in shaping development outcomes, and critically assess strategies for promoting inclusive and sustainable economic progress in both developing and developed countries.
Recommended Textbook
Economics of Development Seventh Edition by Dwight H. Perkins
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20 Chapters
548 Verified Questions
548 Flashcards
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Page 2
Chapter 1: Patterns of Development
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Sample Questions
Q1) The poorest nations in the world,representing 12 percent of humanity,are primarily located in:
A) Southeast Asia.
B) Eastern Europe.
C) sub-Saharan Africa.
D) Latin America.
Answer: C
Q2) While working in the Japanese electronics factory in Penang,Rachmina Abdullah: A) saved money to provide herself with a better future.
B) became a wealthy urbanite who sought after the better amenities of life.
C) decided to permanently settle in Japan and become a citizen of that country.
D) grew accustomed to spending most of her wages on cosmetics and luxury items.
Answer: A
Q3) For a country where income per capita is growing by 2 percent per year,how many years will it take for average incomes to double?
A) 35 years
B) 96 years
C) 14 years
D) 180 years
Answer: A
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Chapter 2: Measuring Economic Growth and Development
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28 Flashcards
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Sample Questions
Q1) All of the regions will meet Target 1 (to halve the number of poor)EXCEPT:
A) Europe and Central Asia.
B) the Middle East and North Africa.
C) sub-Saharan Africa and South Asia.
D) South America.
Answer: C
Q2) A country's nominal GNP for a given year is defined as the total market value of:
A) labor plus capital plus technical change.
B) all final goods and services produced.
C) all final plus intermediate goods and services produced.
D) all final goods and services consumed.
Answer: B
Q3) Since the year 2000,economic performance in sub-Saharan Africa has improved; this can be attributed to all of the following reasons EXCEPT for:
A) improved economic policies and management.
B) more democratic and accountable governments.
C) a return to state-directed economic policies.
D) new technologies.
Answer: C
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Page 4
Chapter 3: Economic Growth: Concepts and Patterns
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26 Flashcards
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Sample Questions
Q1) Economists think that economic growth depends fundamentally on all of the following EXCEPT:
A) factor accumulation.
B) inequality.
C) efficiency.
D) technological change.
Answer: B
Q2) Diminishing returns to capital means that as you add more capital:
A) output falls.
B) the additional contribution to output eventually declines.
C) labor usage falls.
D) output rises.
Answer: B
Q3) Countries with rapid growth include all of the following EXCEPT: A) Indonesia.
B) South Korea.
C) Botswana.
D) Chile.
Answer: D
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Page 5
Chapter 4: Theories of Economic Growth
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Sample Questions
Q1) Which of the following statements is true about new growth theories and the Solow and Harrod-Domar models?
A) Both underline the importance of factor accumulation and productivity in the growth process.
B) Both treat technology as endogenous.
C) Both take externalities into account.
D) Both assume increasing returns to scale.
Q2) From 1999-2007,Thailand's economy experienced an annual growth rate of:
A) 2.1 percent.
B) 3.9 percent.
C) 4.7 percent.
D) 7.5 percent.
Q3) 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.
Q4) Level effect,growth effect
Q5) Solow model,isoquants
Q6) Capital deepening,capital widening
Page 6
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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) Although aid to post-World War II nations was successful in helping them rebuild,similar aid to less-developed nations failed to produce the same results because:
A) miscalculations of aid were based on per capita income in each nation.
B) critical institutions within these governments were missing.
C) countries refused to play by "the rules of the game."
D) of the problem of asymmetric information.
Q2) Dual price system,unified market-price system
Q3) China and Vietnam are examples of formerly planned economies that:
A) adopted the shock-therapy approach to liberalization.
B) began their reform programs by privatizing large state-owned industrial enterprises.
C) suffered severe economic contraction during the transition to a market system.
D) managed the transition to a market economy in gradual steps.
Q4) West Pakistan,East Pakistan
Q5) Government intervention,non-government intervention
Q6) Structural adjustment,economic distortions
Q7) Shock therapy,gradualist approach
Q8) Pareto optimality,aid to the poor
Page 7
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Chapter 6: Inequality and Poverty
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Sample Questions
Q1) The single most important variable explaining the number of people in poverty in a given country is:
A) the literacy rate.
B) the HDI.
C) per capita income.
D) population.
Q2) The design of social safety nets differs from income transfers in that the former:
A) recognize that poverty is often transitory and not permanent.
B) do not always go to poor people.
C) are expensive to administer and lack public support.
D) none of the above.
Q3) 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.
Q4) Income transfers,social safety nets
Q5) Washington Consensus,1990 World Development Report
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Chapter 7: Population
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26 Flashcards
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Sample Questions
Q1) Most analysts still believe which of the following positions?
A) Most developing countries remain underpopulated because of the enormous gains in productivity made possible by modern science.
B) Slower population growth would permit per capita income to rise more rapidly in nearly all developing countries.
C) High rates of population growth benefit economic development.
D) There is no economic rationale for government intervention in population growth because individuals properly balance costs and benefits when making decisions about family size.
Q2) Family planning,state versus personal choice
Q3) As the twenty-first century moves forward,many nations in which area of the world will continue to face high fertility and the burdens (and opportunities)of a young population?
A) Latin America
B) Southeast Asia
C) sub-Saharan Africa
D) Central Europe
Q4) China,India
Q5) Implicit costs of children,explicit costs of children
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Chapter 8: Education
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25 Flashcards
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Sample Questions
Q1) 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.
Q2) Rates of return on schooling depend on what happens in:
A) the demographics of marriage in the country.
B) secondary and tertiary educational outcomes.
C) both school and the labor market after students graduate.
D) regard to the average student's body mass index by 18 years of age.
Q3) Explicit costs of schooling,implicit costs of schooling
Q4) Social rate of return,educated unemployment
Q5) Which education indicator refers to enrollments of those in the relevant age group?
A) gross enrollment rates
B) net enrollment rates
C) grade survival rates
D) learning outcomes
Q6) Gender gap,gender parity
Page 10
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Chapter 9: Health
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Sample Questions
Q1) Health statistics on morbidity refer to the:
A) incidence of mental-health problems.
B) incidence of disease and illness.
C) fraction of deaths caused by preventable disease.
D) incidence of unnatural death due to accidents, crime, and war.
Q2) HIV/AIDS,antiretroviral drugs (ARVs)
Q3) Almost one-fifth of the deaths in children under five in Africa are from:
A) malaria.
B) HIV/AIDS.
C) tuberculosis.
D) none of the above.
Q4) Health,income
Q5) Increased income allows people,particularly the poor,to buy more of the following EXCEPT:
A) clothing and apparel.
B) better housing.
C) food.
D) health care.
Q6) Epidemiologic transition,developing countries
Q7) Tuberculosis (TB),directly observed treatment short course (DOTS)
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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) The net present value of a project is the:
A) sum of the project's cash flow from each year.
B) project's total cash flow divided by the current interest rate.
C) sum of the present value of the project's cash flow from each year.
D) project's total cash flow, less its start-up costs.
Q2) Multinational corporations:
A) avoid spillovers whenever possible.
B) often encourage horizontal spillover.
C) often encourage vertical spillover.
D) encourage both horizontal and vertical spillover.
Q3) Today,FDI is aimed primarily at all of the following broad categories EXCEPT:
A) natural resource-based activities.
B) alternative and "green energy" production.
C) manufacturing and services aimed at the domestic market in the host country.
D) labor-intensive manufacturing aimed for export on world markets.
Q4) The majority of direct foreign investment in developing countries comes:
A) equally from the private and public sectors.
B) predominantly from the public sector.
C) predominantly from the private sector.
D) from multinational corporations.
Page 12
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Chapter 11: Fiscal Policy
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27 Flashcards
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Sample Questions
Q1) State-owned enterprises (SOEs),subsidies
Q2) Effective taxes,luxury tax
Q3) Direct taxes,indirect taxes
Q4) Excise tax,sales tax
Q5) 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.
Q6) When governments raise expenditures or cut taxes on individuals and corporations so that they can raise their expenditures,such actions are referred to as:
A) fiscal policy.
B) monetary policy.
C) indexing.
D) regressive taxation.
Q7) Tax rates,tax evasion
Q8) Fiscal policy,monetary policy
Q9) Tax incentives,tax shelters
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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) Why do developing countries have floating exchange rates?
A) to insulate themselves from world inflation
B) to stabilize government deficits
C) to keep reserves low
D) to keep their money value higher than the dollar
Q2) Real interest rate,deep finance
Q3) Hyperinflation,government budget deficit
Q4) Commercial banks,financial intermediation
Q5) What is achieved by having an upward adjustment in reserve requirements?
A) The money multiplier is increased, lowering inflation.
B) It reduces the stock of money that can be supported by a given amount of reserves.
C) The money multiplier is decreased.
D) Both b and c, which may help moderate inflation.
Q6) Domestic credit expansion,credit ceilings
Q7) Medium of exchange,M2
Q8) Pegged exchange rate,floating exchange rate
Q9) Economic collapse,runaway inflation
Q10) International reserves,value of imports
Q11) Open-market operations,moral suasion Page 14
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Page 15
Chapter 13: Foreign Debt and Financial Crises
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27 Flashcards
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Sample Questions
Q1) Common characteristics of countries caught in the Asian crises include which of the following?
A) middle and upper-middle national incomes
B) receipt of large flows of private international capital
C) large government budget deficits
D) all of the above
Q2) Rational panics,bank runs
Q3) Insolvent borrower,illiquid borrower
Q4) External transfer problem,internal transfer problem
Q5) Assume that,as was the case in 1994,Mexican goods are 22 percent more expensive than U.S.goods.If capital markets are fully liberalized and the Central Bank of Mexico is committed to a pegged peso/dollar exchange rate,then:
A) foreign investors are likely to perceive this as an overvaluation of the peso.
B) there is likely to be a net outflow of short-term capital.
C) the central bank likely will need to raise interest rates.
D) all of the above.
Q6) Liquidity,solvency
Q7) Brady plan,Brady bonds
Q8) Odious debt,Spanish-American War
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Chapter 14: Foreign Aid
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25 Flashcards
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Sample Questions
Q1) When the U.S.government provides a grant to build an electricity generator:
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.
Q2) When Citibank provides a commercial loan to build an electricity generator:
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.
Q3) Absorptive capacity,aid
Q4) Beginning in 2002,which country became the largest aid recipient in the world?
A) Iraq
B) Iran
C) Vietnam
D) India
Q5) Iraq,motivations for aid
Q6) Aid,growth
Q7) Official development assistance (ODA),Development Assistance Committee (DAC)
Q8) Foreign aid,nonconcessional assistance
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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) Tradable goods,real exchange rate
Q2) Stabilization program,crawling-peg exchange rate regime
Q3) Fiscal policy,austerity
Q4) 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
Q5) At any point to the left of the EB line in the phase diagram:
A) there is inflationary pressure.
B) there is an external surplus.
C) fiscal and monetary policies are too loose.
D) all of the above.
Q6) Phase diagram,self-correcting tendencies
Q7) Which of the following events will cause the external-balance line in the phase diagram to shift to the left?
A) an appreciation of the exchange rate
B) a decline in the interest rate on foreign debt
C) a decline in the absorption
D) a decline in export earnings Page 18
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Page 19
Chapter 16: Agriculture and Development
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Sample Questions
Q1) Diminishing returns,labor surplus
Q2) ___________ is the systematic changes in sector proportions as economies grow.
A) Structural transformation
B) Technical innovation
C) Developmental devolution
D) Unit-elastic supply
Q3) Disguised unemployment refers to:
A) the underground economy.
B) unemployment that fluctuates in the rural countryside.
C) earning two incomes annually, but reporting only one.
D) people who claim to be looking for a job, but have no intention of working.
Q4) Marginal product of labor,average product
Q5) The Fei-Ranis model can be used to explore the implications of:
A) population growth and a rise in agricultural productivity.
B) enclosure movements and the rise of urban laborers.
C) becoming a resource exporting country.
D) using barter as the primary method of exchanging goods.
Q6) Agricultural output per worker,nonagricultural output per worker
Q7) Labor surplus model,neoclassical model
Q8) Subsistence level,institutionally fixed wage
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Chapter 17: Agricultural Development: Technology, policies, and Institutions
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31 Flashcards
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Sample Questions
Q1) Actual performance,potential performance
Q2) What is the margin between farm-gate price and retail price called?
A) marginal return
B) net profit
C) marketing margin
D) base price
Q3) Agronomist Norman Borlaug is often referred to as the father of:
A) economic development.
B) the Green Revolution.
C) the World Bank.
D) radical land redistribution.
Q4) Overvalued exchange rates,ceilings on interest rates
Q5) Technical ceiling,technology diffusion
Q6) The problem with the practice of shifting cultivation is that it has been linked to:
A) price distortions in the marketplace.
B) increased reports of farmers suffering from "spatial dislocation."
C) soil erosion.
D) outbreaks of various disease strains.
Q7) Shifting cultivation,slash and burn
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Chapter 18: Trade and Development
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Sample Questions
Q1) ________ acts like a tax on economic activity and encourages rent-seeking behavior rather than productive investment.
A) Fraud
B) Bribery
C) Lobbying
D) Corruption
Q2) Geographic location,trade
Q3) Most world trade involves manufactured goods,but ________ still represent about one-third of the value of all traded goods.
A) primary products
B) secondary products
C) intermediate materials
D) processed materials
Q4) Tradable goods,nontradable goods
Q5) Openness to trade,rate of growth in GDP per capita
Q6) Primary products,manufactured goods
Q7) Exporting primary products,forward linkages
Q8) Export pessimism,relative price movements
Q9) Dutch disease,exchange rates
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Chapter 19: Trade Policy
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25 Flashcards
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Sample Questions
Q1) The effective rate of protection measures how much:
A) investment will be drawn into the protected industry.
B) profit can be earned by producing the protected product.
C) the margin of price over input cost for domestic producers can exceed the margin at world market prices.
D) the price of the product increases due to the tariff.
Q2) Economists generally prefer the use of subsidies instead of protective tariffs because:
A) subsidies create smaller deadweight losses.
B) subsidies can be targeted more carefully.
C) the visible cost of subsidies creates an automatic incentive to phase out protection.
D) all of the above.
Q3) Import quota,deadweight loss
Q4) Tariff revenue,quota rent
Q5) Import substitution,infant industry
Q6) Trade protection,political economy
Q7) Trade liberalization,benefits of exporting
Q8) GATT,most-favored-nation principle
Q9) Overvalued exchange rate,import-GDP ratio
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Chapter 20: Sustainable Development
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Sample Questions
Q1) The combination of produced capital,natural capital,and intangible capital make up which of the following terms?
A) complete wealth
B) total assets
C) comprehensive wealth
D) comprehensive resources
Q2) Which of the following is a function of forest income in rural livelihoods?
A) safety nets to help compensate production shortfalls
B) support for current consumption
C) a source of income growth
D) all of the above
Q3) Public disclosure of information about a factory's environmental performance to local stake holders is an example of:
A) informal regulation.
B) formal regulation.
C) unofficial guidelines.
D) transparency parameters.
Q4) Natural capital,intangible capital
Q5) Pollution,rich countries
Q6) Payments for environmental services (PES)programs,marketable permits
Page 24
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