Public Policy and Development Review Questions
Course Introduction
This course explores the intersection of public policy and economic development, examining how governments design, implement, and evaluate policies to foster social and economic progress. Students will investigate policy challenges in areas such as health, education, poverty reduction, infrastructure, and governance, with an emphasis on the experiences of developing countries. Through case studies and theoretical frameworks, the course critically analyzes the role of institutions, political economy, and stakeholder engagement in shaping development outcomes. By the end of the course, students will gain practical skills in policy analysis and a deeper understanding of the complexities involved in promoting sustainable development.
Recommended Textbook
Economic Development 10th Edition by Michael
P. Todaro
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16 Chapters
500 Verified Questions
500 Flashcards
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Chapter 1: Economics, Institutions, and Development: a Global Perspective
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Sample Questions
Q1) What are the Millennium Development Goals (MDGs) and how did they come about? What do you consider to be the most important of these and why?
Answer: The answer should stress that the goals cover a broad range of objectives both economic and social. These were put forward so that developing countries would have numerical targets against which their progress could be judged and, where warranted, appropriate assistance offered. An interim assessment of the MDGs can be found at: www.unmilleniumproject.org.
Q2) 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
Q3) Provide a definition of development economics. Justify your choice carefully.
Answer: See the section in Chapter 1 entitled, "The Nature of Development Economics," on Pages 9-10 for some ideas about how the students might answer this question. They should in some way say that development economics is more than just growth in GDP.
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Chapter 2: Comparative Economic Development
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Sample Questions
Q1) Conditions of today's developed countries at the start of their industrialization differ from conditions in the developing world in that
A)population growth rates were higher.
B)more advanced technology was available.
C)there were more opportunities for development assistance.
D) none of the above.
Answer: D
Q2) An example of an upper-middle income country is A)India.
B)Brazil.
C)Indonesia.
D) Nigeria.
Answer: B
Q3) Which measure uses a common set of international prices for all goods and services produced?
A)purchasing power parity income levels
B)GNP price deflators
C)foreign exchange rate conversions to U.S.dollars
D) the exchange rate
Answer: A
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Chapter 3: Classic Theories of Economic Growth and Development
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Sample Questions
Q1) 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.
Q2) 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.
Q3) 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
Q4) Patterns of development or structural change analysis stress internal change in a developing country's economic, industrial, and institutional structure. What are some of the most important changes?
Answer: Discussed in the text.
Page 5
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Chapter 4: Contemporary Models of Development and Underdevelopment
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Q1) 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?
Q2) What three factors distinguish models of endogenous growth from their neoclassical counterparts?
Q3) Explain the basic idea behind the Big Push model?
Q4) What is meant by the term technological spillover?
Q5) Explain how the S-curve reflects the typical nature of complementarities?
Q6) How can the O-ring theory help explain the existence of a low-level equilibrium that an economy may find itself in?
Q7) The S-curve is used to illustrate
A)the typical path taken by the current account over time.
B)economic fluctuations in the economy.
C)the typical growth path of a developing economy.
D) the existence of multiple equilibria.
Q8) Explain what is meant by the term coordination failure and provide an example.
Q9) Explain how the government can help the economy avoid a coordination failure.
Q10) Show in a diagram an S-curve and a 45-degree line. Are all three points of Page 6
intersection stable equilibrium points? Explain.
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Page 7
Chapter 5: Poverty, Inequality, and Development
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Sample Questions
Q1) Explain why a Lorenz curve can never lie to the left or above the 45 degree line.
Q2) The absolute poverty line
A)decreases as real income grows.
B)shows the average income of the lowest income group.
C)can be measured with the Lorenz curve.
D) None of the above.
Q3) Just what is it that makes a technology "appropriate" for a developing country?
Q4) About how many people are living in extreme poverty in the world? Which regions have the greatest percentages of people living in extreme poverty?
Q5) About what percent of the world's poorest people are female?
A)30
B)50
C)70
D) 90
Q6) Increasing GNP is a necessary but not a sufficient condition for improving living standards in less developed countries. True or false, explain.
A)True
B)False
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Chapter 6: Population Growth and Economic Development:
Causes, Consequences, and Controversies
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Sample Questions
Q1) The world rate of population growth is closest to A)1%.
B)2%.
C)3%.
D) 4%.
Q2) 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.
Q3) What is meant by the demographic transition? What are the differences in the demographic transition between the current developed economies and developing countries?
Q4) Projections place world population by 2050 at
A)between 4 and 6 billion.
B)between 6 and 8 billion.
C)between 8 and 10 billion.
D) between 10 and 12 billion.
9
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Chapter 7: Urbanization and Ruralurban Migration: Theory and Policy
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Sample Questions
Q1) 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.
Q2) How could the removal of labor market distortions increase employment even if the elasticity of factor substitution is very low?
Q3) Explain what is meant by urban bias. What are the major effects of urban bias?
Q4) What are the main features of the Harris-Todaro model of rural-urban migration?
Q5) For what percentage of urban population growth is rural-urban migration responsible?
A)Between 30% and 60%
B)Between 40% and 80%
C)Between 50% and 70%
D) Between 50% and 90%
Q6) The informal sector exhibits
A)free entry.
B)labor intensive methods.
C)small, competitive firms.
D) all of the above.
Q7) Why is urban giantism less prevalent in mature democracies?
Q8) Describe some of the causes of urban giantism in developing countries. Page 10
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Chapter 8: Human Capital: Education and Health in Economic Development
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Sample Questions
Q1) Why should the development of a solid elementary education system take precedence over an expansion of the university system in developing countries?
Q2) Is child labor a problem in developing countries? Explain.
Q3) Explain some of the reasons why developing countries have not realized a greater positive development impact from their higher education programs.
Q4) Why is eradicating child labor seen as an economic investment?
Q5) It is important to stress the role of primary education in the development strategy because of
A)LDC's comparative advantage from basic skills education.
B)the law of diminishing returns.
C)development emphasis on poverty alleviation.
D) all of the above.
Q6) What are the critical health challenges facing developing countries today and what measure(s) are being taken to confront these challenges? Explain your answer.
Q7) 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.
Page 12
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Chapter 9: Agricultural Transformation and Rural Development
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Q1) In a world of perfect certainty, sharecropping would be less efficient than a farm owner working his own farm because
A)sharecroppers receive only half of their marginal product.
B)paying a worker a wage gives him or her an incentive to shirk.
C)sharecroppers are exploited by landlords.
D) renting farmland concentrates risk on the renters.
E) All of the above.
Q2) 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.
Q3) An agrarian system refers to
A)the pattern of land ownership.
B)the type of crops grown.
C)the processing of agricultural commodities.
D) an economy that has no industry.
Q4) What is the Alliance for a Green Revolution in Africa and who are its primary supporters?
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Chapter 10: The Environment and Development
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Sample Questions
Q1) 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.
Q2) Debt-for-nature swaps are most generally
A)beneficial only to the developing country.
B)beneficial only to the developed country.
C)beneficial only to the bank which can write off the debt.
D) beneficial to all countries.
Q3) Explain what developed countries can do to respond constructively to the environmental damage being done in developing countries.
Q4) The annual income that can be consumed without diminishing the total capital assets of a nation is
A)purchasing power parity income.
B)sustainable national income.
C)environmental capital stock.
D) per capita income.
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Chapter 11: Development Policymaking and the Roles of
Market, State, and Civil Society
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Q1) Development plans have often failed because A)they have been insufficiently specific about projects.
B)they have overlooked noneconomic considerations.
C)they have been overambitious.
D) All of the above.
E) None of the above.
Q2) In the Harrod-Domar model, if the savings rate is 20% and the incremental capital output ratio is five, abstracting from depreciation, what is the implied growth rate?
Q3) Assume a closed economy. Suppose the incremental capital-output ratio is 3, and the depreciation rate is 4%. Using the Harrod-Domar growth equation, if the savings rate is 9%, what will be the rate of growth? What would the savings rate have to be to achieve 5% growth?
Q4) What is the role of input-output analysis in development planning? What are the strengths and weaknesses of this technique?
Q5) Explain what is meant by market failure.
Q6) What is the primary composition/ownership pattern of the private sector in most developing countries?
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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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 statements is true?
A)Larger countries (in terms of size) tend to be more open (in terms of larger share of exports in GDP) than smaller countries and developing countries tend to be less open than developed economies.
B)Larger countries (in terms of size) tend to be less open (in terms of lower share of exports in GDP) than smaller countries and developing countries tend to be less open than developed economies.
C)Larger countries (in terms of size) tend to be more open (in terms of larger share of exports in GDP) than smaller countries and developing countries tend to be more open than developed economies.
D) Larger countries (in terms of size) tend to be less open (in terms of lower share of exports in GDP) than smaller countries and developing countries tend to be more open than developed economies.
Q3) Explain the difference between nominal and effective tariffs.
Page 16
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Chapter 13: Balance of Payments, Developing-Country
Debt, and the Macroeconomic Stabilization Controversy
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Q1) What kinds of domestic policies, short of significant debt reduction, can be followed to alleviate a debt crisis? How effective have these policies been?
Q2) What is meant by petrodollar recycling? Explain the mechanism by which this phenomenon occurred. What were the consequences of this phenomenon for developing countries?
Q3) What is meant by the term odious debt?
Q4) The flow of private foreign investment and grants and loans is included in a country's
A)current account.
B)capital account.
C)cash account.
D) None of the above.
Q5) The debt service ratio is the ratio of
A)external debt to the size of the service sector.
B)external debt to total GNP.
C)internal debt to the size of the service sector.
D) internal debt to total GNP.
E) none of the above.
Q6) Why may the debt crisis be only "sleeping," rather than "dead?"
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Chapter 14: Foreign Finance, Investment, and Aid: Controversies and Opportunities
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Q1) As an absolute amount (billions of dollars), which of the following countries provides the greatest amount of foreign aid?
A)United Kingdom
B)United States
C)Italy
D) Sweden
Q2) Discuss how remittances can help reduce poverty and meet other development objectives in recipient nations.
Q3) As a percentage of GNI, which of the following countries provides the greatest amount of ?foreign aid?
A)United Kingdom
B)United States
C)Italy
D) Sweden
Q4) Critically evaluate the following statement: "If no other assistance is available, tied aid should be accepted anyway, on the grounds that developing countries should accept any help they can get."
Q5) Why does investment by multinational corporations not necessarily help to close the foreign exchange gap?
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Chapter 15: Finance and Fiscal Policy for Development
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Sample Questions
Q1) From 1995-1997, tax revenue as a percent of GDP
A)was roughly equal between developing and developed countries.
B)was a few percentage points higher for developed than for developing countries.
C)was a few percentage points lower for developed than for developing countries.
D) was much higher (approximately double) for developed countries than for developing ?countries.
E) was much higher (approximately double) for developing countries than for developed ?countries.
Q2) What are the major market failures that imply a potential role for state intervention in financial markets?
Q3) What is meant by the term dynamic incentives in the context of making loans to micro borrowers.
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) How can joint liability lower the interest rate for microborrowers?
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Chapter 16: Some Critical Issues for the Twenty-First
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Q1) The "price of rain forest preservation" can be lowered for LDCs by
A)development of alternative rain forest products.
B)research on agriculture in rain forest soils.
C)encouraging rain forest settlement of the poor.
D) subsidies for activities like cattle raising.
E) all of the above.f.none of the above.
Q2) Which of the following was/were among the causes of sub-Saharan Africa's decline in the 1980s?
A)Flooding
B)Decline of Soviet influence
C)Rapid growth in Japan
D) Inefficient state-owned enterprises
E) All of the above were among the causes
F)None of the above.
Q3) "The 1980s was a lost decade for the absolutely poor." Evaluate this famous statement.
Q4) "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).
Page 20
Q5) What is the relationship between land reform and rain forest preservation?
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