Economic Development 11th Edition

What are the main features of the Harris-Todaro model of rural-urban migration? Answer: Rational economic decision based on costs/benefits. The reward to migration is expected rather than actual urban income. The probability of obtaining an urban job depends on urban employment rates. High rates of urban unemployment are inevitable. Rational economic decision

The nominal rate of protection shows the extent to which the domestic price of imported goods exceeds (a) what the price would be without tariffs. (b) the cost of intermediate inputs. (c) the social opportunity costs of the good. (d) the no-trade equilibrium price. Answer: A A A The portion of a country's overall assets that is directly

With modern sector enrichment growth, inequality will (a) first rise and then fall. (b) first fall and then rise. (c) remain about the same. (d) none of the above. Answer: D D D The informal sector exhibits (a) free entry (b) labor intensive methods (c) small, competitive firms (d) all of the above Answer: D D D Which of the following is not a rationale for

An individual's demand for education is most affected by (a) direct and indirect costs of schooling. (b) development priorities of the country. (c) the desire to escape agricultural work. (d) all of the above. Answer: A A A Sectors where the development process leads to a more rapid expansion of demand than supply in goods or factor markets are

The best explanation for the late 1994/early 1995 collapse of the Mexican peso and stock market is (a) free movement of capital internationally is destabilizing for a developing country. (b) portfolio investments were camouflaging overvalued exchange rates. (c) debt for equity swaps had created imbalances in the ownership structure of the economy. (d) the

The purpose of commodity buffer stocks is (a) to moderate price fluctuations. (b) to raise commodity prices. (c) to encourage commodity substitution. (d) to guarantee national security. Answer: A A A The following income distribution data are for Brazil. (a) Carefully graph the Lorenz curve, labeling the axes. (b) Brazil's national income is about $300 billion. What is the approximate

Increasing GNP is a necessary but not a sufficient condition for improving living standards in less developed countries. True or false, explain. Answer: True. Growth in income is necessary but it does not guarantee that all will benefit.See the discussion in the text. True. Growth in income is necessary but it does

What is meant by the term technological spillover? Answer: Technological spillovers are present when investment generates external economies. The knowledge component of the firm's capital stock is like a public good that spills over to other firms in the economy. Technological spillovers are present when investment generates external economies. The knowledge component

In the North-South model, how are "basic factors" distinguished from "advanced factors," and what are the implications for growth and development possibilities? Answer: Basic factors include relatively unskilled labor, physical resources, location, and general infrastructure. Advanced factors include education and firm specific human capital, knowledge resources including universities, research facilities, and

Show in a diagram an S-curve and a 45-degree line. Are all three points of intersection stable equilibrium points? Explain. Answer: Explained in the text. Explained in the text. Explained in the text. What is human capital and why is it crucial to expand human capital as part of the development process? Answer: Human capital

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. Life expectancy, educational attainment, GDP per capita measured in PPP terms. Life expectancy, educational attainment, GDP per capita measured in PPP terms. Distinguish between economic growth by modern sector

A plan that sets targets to cover all major aspects of the national economy is known as a/an _____ plan: (a) interindustry (b) complete (c) comprehensive (d) economic Answer: C C C The system of land tenure in which tenant farmers pay a fixed share of their crop to landowners is called (a) communal farming. (b) collective farming. (c) latifundio-minifundio system. (d)

Comment on the following statement: The level and growth rate of real GDP per capita can be a misleading indicator of development. At the same time, countries that experience sustained increases in real GDP per capita over time will tend to be more developed. Answer: Open-ended essay. Open-ended essay. Open-ended essay. What economic benefits

The poverty gap is the (a) absolute number of people below the international poverty line. (b) percentage of the population below the international poverty line. (c) consumption (measured in dollars) necessary to bring everyone below the poverty line up to the line. (d) percentage of a country's total consumption necessary to bring everyone in