Chapter 6 : Inequality and Poverty
MULTIPLE CHOICE
1. The single most important variable explaining the number of people in poverty in a given country is:
a.
the literacy rate.
c.
per capita income.
b.
the HDI.
d.
population.
2. Elements of a pro-poor development strategy would contain all of the following EXCEPT:
a.
encouraging rapid economic growth.
b.
improving basic health and education.
c.
designing social safety nets for vulnerable groups.
d.
encouraging zero population growth through free access to all forms of birth control.
3. Most frequency distributions of income have the following shape:
a.
rectangular.
c.
lognormal.
b.
normal.
d.
none of the above.
4. To draw a Lorenz curve showing the distribution of income by household, one should first rank all
households according to:
a.
household size.
c.
wage level.
b.
age of head of household.
d.
income or consumption level.
5. If everyone in a country had the same level of income, then the value of the Gini concentration ratio
would be:
a.
1.0.
c.
0.5.
b.
0.0.
d.
infinity.
6. Kuznets speculated on the relationship between growth and inequality, arguing that inequality rose
when:
a.
industrialization and urbanization rose.
b.
everyone remained in the agriculture sector.
c.
service sector jobs reigned supreme as a model for job expansion.
d.
people failed to live by the premise found within It Takes a Village.
7. 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.
8. High levels of inequality tend to be associated with:
a.
communalism.
c.
countries with poor infrastructures.
b.
personal and political violence.
d.
the rate of infectious diseases.
9. Based on recent estimates of 2005 purchasing power parity (PPP) dollars, developmental economists
now estimate living in extreme poverty as living below:
a.
$1.00 a day.
c.
$1.57 a day.
b.
$1.25 a day.
d.
$4.95 a day.
10. According to the World Bank, 64 million people were recently pushed into “extreme poverty” due to:
a.
civil war in the Sudan.
b.
global warming and its impact on agriculture.
c.
the collapse of the Soviet Union.
d.
the financial crisis of 2008.
11. A small subsidy to the poorest of the poor will leave which of the following unchanged?
a.
headcount index
c.
income distribution
b.
poverty gap
d.
none of the above
12. Major components of the Washington Consensus are:
a.
macroeconomic stability and economic openness.
b.
the promotion of peace and justice.
c.
exploiting the agricultural sector to fund urban industrial development.
d.
combating international piracy and terrorism.
13. Trade can help the poor by:
a.
increasing the employment of unskilled workers.
b.
increasing productivity which will increase growth.
c.
decreasing the price the poor pay for goods and services.
d.
all of the above.
14. 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.
15. Recent studies show that global inequality is significantly higher than:
a.
what the Lorenz curve portrays.
b.
the Club of Rome anticipated.
c.
population-weighted international inequality.
d.
the latest UN data suggested.
SHORT ANSWER
IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in
pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two
terms and (2) the relationship between them.
1. Lorenz curve, Gini coefficient
ANS:
Answer will vary
2. National poverty line, global poverty line
ANS:
Answer will vary
3. Head-count index, poverty gap
ANS:
Answer will vary
4. $1.00 a day, $1.25 a day
ANS:
Answer will vary
5. Washington Consensus, 1990 World Development Report
ANS:
Answer will vary
6. Income transfers, social safety nets
ANS:
Answer will vary
7. Inequality and weighted population, inequality and unweighted population
ANS:
Answer will vary
8. Kuznets, Lewis
ANS:
Answer will vary
9. Trade liberalization, anti-globalization
ANS:
Answer will vary