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:
The portion of a country’s overall assets that is directly related to the environment, such
as forests and soil quality, is known as
(a) environmental capital.
(b) debt for nature swaps.
(c) protected areas.
(d) common property assets.
Answer:
One of the components of the human development index is
a. the percentage of the population who are high school graduates.
b. the average daily intake of protein.
c. life expectancy at birth.
d. the number of doctors per hundred people in the population.
Answer:
The ratio of a country’s average export price to its average import price is
(a) its absolute advantage.
(b) its comparative advantage.
(c) its terms of trade.
(d) its exchange rate.
Answer:
Rural-urban migrants differ from the rest of the rural population in that they are more
likely to be
(a) well educated
(b) poor
(c) female
(d) all of the above
Answer:
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.
Answer:
The core values of development include
a. increasing income per person.
b. reducing the inequality of income.
c. the ability to meet basic needs.
d. all of the above.
Answer:
The supply of public school places is determined by
(a) individuals’ demand for education.
(b) direct and indirect costs of schooling.
(c) political processes, often unrelated to economic criteria.
(d) all of the above.
Answer:
According to the 2005 UNDP Human Development Report child mortality (under age
5) has declined in all regions of the world except:
(a) South Asia
(b) Sub-Saharan Africa
(c) Middle East and North Africa
(d) None of the above
Answer:
Consider the following distribution of income in a 12-person economy, with the modern
urban wage = 10, the traditional rural income = 2, and the informal urban wage = 4:
(2,2,2,2,4,4,4,4,10,10,10,10).
(a) Suppose rural incomes are raised to 3, other things equal. Show the change using the
Lorenz curve. How would this type of growth be characterized? (It is suggested that
you use the Fields growth decomposition in answering. This shows traditional sector
enrichment growth.)
(b) Calculate the Ahluwalia-Chenery welfare index for terciles (3 fractiles) under GNP
weights and equal weights. Which index is higher and why?
Answer:
Debt equity swaps may lead to
(a) increased foreign ownership.
(b) greater domestic inflation.
(c) lower debt servicing requirements.
(d) all of the above.
(e) none of the above.
Answer:
Implicit assumptions from which theories evolve are known as
(a) a paradigm.
(b) biases.
(c) stylized facts.
(d) normative economics.
Answer:
Distribution of income according to percentiles, such as the highest 40% or lowest 20%
is known as the _______________ distribution of income.
(a) size
(b) functional
(c) GNP-weighted
(d) equal-weighted
Answer:
Concentration of resources on higher rather than basic education in developing
countries tends to lead to
(a) greater inequality.
(b) lower fertility.
(c) less international migration.
(d) more job creation.
Answer:
Provide a concise statement about the relationship between multinational corporations
and:
(a) domestic employment, (b) foreign exchange, (c) taxes, (d) investment, (e)
consumption, (f) industrialization, (g) inequality, and (h) technology.
Answer:
Which of the following is a criticism of the neoclassical counter-revolution school’s
approach?
(a) markets are not competitive in developing countries.
(b) externalities are common in developing countries.
(c) inequality may worsen when interventions are removed in developing countries.
(d) all of the above.
Answer:
Evidence suggests that population growth has negative effects on
(a) economic growth.
(b) poverty reduction.
(c) environment.
(d) education.
(e) all of the above.
Answer:
In which of these developing regions has food production per capita steadily fallen over
the last quarter century?
(a) Africa.
(b) East Asia.
(c) South Asia.
(d) Latin America.
Answer:
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.
Answer:
Which of the following is a major argument of trade pessimists?
(a) Increased productivity of developed country agriculture.
(b) Increased efficiency in industrial use of raw materials.
(c) Protectionism against labor-intensive manufactures.
(d) All of the above.
Answer:
When it comes to the composition of tax revenues from different sources,
(a) developing countries derive the largest portion of their revenue from income taxes
and developed countries from consumption taxes.
(b) developing countries derive the largest portion of their revenue from consumption
taxes and developed countries from income taxes.
(c) both developing countries and developed countries derive the largest portion of their
revenue from income taxes.
(d) both developing countries and developed countries derive the largest portion of their
revenue from consumption taxes.
Answer:
Which of the following is an argument in favor of interventionist trade policies?
(a) Cheaper capital goods.
(b) Declining terms of trade.
(c) Decreased losses from rent-seeking activities.
(d) All of the above.
(e) None of the above.
Answer:
In 19957, 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.
Answer:
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:
MNCs can often decrease their tax liability through
(a) use of more capital-intensive techniques.
(b) use of transfer pricing.
(c) use of more foreign input sources.
(d) bargaining with the host country.
(e) none of the above.
Answer:
Developing countries are starting to converge with developed countries in the long run
in what respect?
a. Growth rate
b. Income inequality
c. Population
d. Per capita income
Answer:
Which of the following is not an upper middle-income country?
a. Brazil
b. South Africa
c. Pakistan
d. Argentina
Answer:
At present, approximately how many years would it take for the world’s population to
double?
(a) 35.
(b) 58.
(c) 96.
(d) 211.
Answer:
Other things constant, the elimination of factor price distortions in developing countries
would
most likely
(a) decrease rural-urban migration.
(b) have little effect on rural-urban migration.
(c) increase rural-urban migration.
(d) increase urbanization.
Answer:
Which of the following conditions does not characterize perfect property rights
markets?
(a) universality
(b) exclusivity
(c) sustainability.
(d) enforceability.
Answer:
According to the Regional HIV and AIDS Statistics data from WHO, which region of
the world has the largest number of adults and children living with HIV?
(a) South and South-East Asia
(b) Sub-Saharan Africa
(c) Latin America
(d) North America
Answer:
What are some of the differences between the population policies of China and India?
What factors may have contributed to their success or failure?
Answer:
Is it possible to proactively prevent armed conflict in developing countries?
Answer:
Provide a short definition of sustainable development.
Answer:
Generally speaking, higher income countries tend to have less income inequality than
low income countries, however this does not always hold true. What could cause a low
income country to have low income inequality?
Answer:
Discuss the BRAC model and evaluate its performance in achieving the goals of
economic development? Can this model be replicated in other countries?
Answer:
Compare and contrast the similarities and the differences in the development experience
of Ghana and Cote d’Ivoire. How did the economic development policies followed by
the two countries differ?
Answer:
What is (are) the key characteristic(s) of the agrarian system in Sub-Saharan Africa?
Answer:
Explain how low levels of living can turn into a vicious cycle in developing countries.
Answer:
Explain the lingering effects of colonialism and how it is still playing a role in
hindering economic development in the developing world.
Answer:
Describe some of the causes of urban giantism in developing countries.
Answer:
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 $ 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?
Answer:
The direct benefits of out-migration to a developing nation include:
A. Loss of skilled workers.
B. Increased remittances.
C. Job growth.
D. Larger capital formation.
Answer:
Explain some important policy measures that you would expect to reduce excessive
rural-urban migration. Explain.
Answer:
What is meant by the term Odious Debt”?
Answer:
Why are women considered to be more credit worthy for micro loans?
Answer:
Investment in human capital is very similar to investing in physical capital. True or
false? Explain your answer.
Answer: