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:
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 dollar
income of the bottom 20%? Bottom 40%?
(c) Brazil’s population is approximately 150 million. Suppose that each household
makes the average income for its quintile. What is the level of poverty if the poverty
line is $400 per capita?
(d) Suppose one percent of national income were transferred from the richest 20% of
households to the poorest 20% of households. Show the effect on relative inequality.
(e) Under the same transfer, what is the effect on poverty?
Answer:
Provide a concise statement about the relationship between a developing country’s
emphasis on the export of traditional commodities and: (a) export earnings stability; (b)
comparative advantage;(c) terms of trade.
Answer:
Higher income countries tend to have lower levels of absolute poverty because
(a) more employment opportunities
(b) more public assistance
(c) greater entrepreneurship opportunities.
(d) all of the above.
Answer:
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.
Answer:
It is important to place particular stress on the role of women in rural development
programs because
(a) women have received less training in the past.
(b) women perform a large majority of the work in the rural sector.
(c) women tend to allocate more resources to their children’s health and education.
(d) all of the above.
Answer:
International resources shared by all countries such as oceans and air are known as
(a) global commons.
(b) free rider problems.
(c) nonrenewable resources.
(d) cooperative resources.
Answer:
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.
Answer:
Autarchy as used in the text refers to
(a) an economy that does not trade.
(b) an economy that trades primary products in exchange for manufactures.
(c) developing country dictatorships.
(d) the caste system and related social structures.
Answer:
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.
Answer:
Assuming that the Gini coefficient for Egypt is 0.403 and the Gini coefficient for
Australia is 0.404, it is possible to conclude that both Egypt and Australia have
(a) virtually the same number of households in absolute poverty.
(b) virtually the same percentage of households in absolute poverty.
(c) virtually the same level of the Human Development Index.
(d) none of the above.
Answer:
The number of live births per 1000 people in the population per year is the
(a) hidden momentum of population growth.
(b) population growth rate.
(c) demographic transition.
(d) crude birth rate.
Answer:
Countries tend to be classified as more or less developed based on
a. the literacy rate.
b. the poverty rate.
c. the level of income per capita.
d. the types of goods they produce.
Answer:
Special Drawing Rights are financial assets created by
(a) the World Bank.
(b) the United National Development Program.
(c) multinational corporations.
(d) the International Monetary Fund.
Answer:
Which of the following are components of economic growth
(a) growth in labor force.
(b) technological progress.
(c) investment.
(d) all of the above.
Answer:
A newly industrialized country is
a. the same as a high income country.
b. any country that has experienced sustained growth in industry.
c. a special classification given to some upper-middle income countries that
have achieved relatively advanced manufacturing sectors.
d. any country that has moved out of lower income status.
Answer:
In South Asia and Sub-Saharan Africa, about what share of output is contributed by
agriculture?
(a) One tenth.
(b) One fifth.
(c) Two fifths.
(d) One half.
Answer:
The supply curve of labor to industry in the Lewis model is horizontal if there is surplus
labor in agriculture. This condition persists as long as
(a) the marginal product of labor is less than the average product of labor in agriculture.
(b) the marginal product of labor in agriculture is less than the marginal product of
labor in industry.
(c) there are diminishing returns to labor in agriculture.
(d) the marginal product of labor in agriculture is zero.
Answer:
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.
Answer:
Compare the relative effectiveness of the balsakhi program to the Computer-Assisted
Learning (CAL) program in India.
Answer:
Neutral technological progress occurs when
a. higher output levels are achieved with the same quantity and combinations of factor
inputs.
b. higher output levels are achieved by more capital intensive methods.
d. higher output levels are achieved by more labor intensive methods.
e. higher output levels are achieved.
Answer:
The effective rate of protection is
(a) value added with protection divided by value added without protection.
(b) value added with protection.
(c) value added without protection.
(d) (value added with protection minus value added without protection) divided by
value added without protection.
Answer:
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.
Answer:
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.
Answer:
Developing countries who have adopted capital intensive technologies tend to have
(a) relatively higher Gini coefficients.
(b) relatively lower Gini coefficients.
(c) Gini coefficients equal to one.
(d) Gini coefficients equal to zero.
Answer:
An example of an upper-middle income country is
a. India.
b. Brazil.
c. Indonesia.
d. Nigeria.
Answer:
If the population growth rate is 2%, the incremental capital output ratio is 3, the saving
ratio is 24% and the depreciation rate is 5%, the rate of growth of income per person is
(a) 1%.
(b) 2%.
(c) 3%.
(d) 5%.
(e) 8%.
Answer:
The basic transfer is defined as
(a) net capital inflow.
(b) interest payments on foreign debt.
(c) net capital inflow divided by interest payments on foreign debt.
(d) net capital inflow minus interest payments on foreign debt.
Answer:
Which of the following is an argument in favor of the liberalization?
(a) Increased technical efficiency.
(b) Accelerated technical progress.
(c) Decreased shortages of foreign exchange.
(d) All of the above.
(e) both (a) and (b) are correct.
Answer:
Absentee landowners characterize the agrarian system of
(a) Asia.
(b) Latin America.
(c) Sub-Saharan Africa.
(d) all of the above.
Answer:
The false paradigm model attributes lack of development to
(a) inadequate attention to price incentives.
(b) inappropriate advice from rich country economists.
(c) low levels of savings and investment.
(d) a lack of government regulation.
Answer:
Poverty is better studied with size distribution measures than those based on factor
distribution because
(a) labor income may be highly concentrated in well-paid modern sector workers.
(b) some poor farmers may receive a sizable share of income in rent.
(c) income from nonmarket activities such as foraging may be important.
(d) all of the above.
Answer:
The ILO approach to combating child labor stresses
(a) encouraging parents to migrate to the cities in search of work.
(b) banning child labor.
(c) tackling the sources of poverty.
(d) all of the above.
Answer:
In the two-gap model, which of the following gaps, when binding, leads to foreign aid
having the largest impact on GNP?
(a) Fiscal gap.
(b) Savings gap.
(c) Foreign exchange gap.
(d) None of the above.
Answer:
In Ecuador, as a share of a firm’s revenue, the cost of bribes is highest for
(a) micro enterprises.
(b) small enterprises.
(c) medium enterprises.
(d) large enterprises.
Answer:
An IMF official was quoted as acknowledging that the Fund’s stabilization packages
have often led to adjustment without growth. However, he said, “the Fund is a
firefighter not a carpenter, and you cannot expect the firefighter to rebuild the house as
well as put out the fire.” Provide a balanced evaluation of this statement.
Answer:
Explain how the government can help the economy avoid a coordination failure.
Answer:
Taiwan and Jamaica are both islands that have pursued export-oriented development
strategies, but Jamaica has experienced increases in unemployment and poverty, while
Taiwan has experienced decreases. How might you explain this?
Answer:
What are the critical health challenges facing developing countries today and what
measure(s) are being taken to confront these challenges? Explain your answer.
Answer:
What are factor price distortions, and what are their major causes in developing
countries?
Answer:
Provide a definition of the current account, the capital account, and the cash account.
What is the relationship between the three accounts?
Answer:
Using a Lorenz curve diagram, explain how to calculate the Gini coefficient.
Answer:
Explain what is meant by investment by MNCs encouraging inappropriate
consumption.
Answer:
Briefly, what are the major causes of export earnings instability for developing
countries?
Answer:
Compare and contrast the experience of Poland and Chile in their efforts at privatizing
SOEs. Make sure you include a discussion of the background to the privatization,
methods adopted and the outcomes of privatization in the two countries.
Answer:
Discuss the pattern of allocation of foreign aid by members of the Development
Assistance Committee (DAC) to developing countries in recent years. What are the
priorities of the DAC members in allocating foreign aid among recipients?
Answer:
It has been argued that tied aid leads to inefficiencies in the recipient country’s
economy. Explain how this could occur.
Answer:
How can an increase in human capital lead to an increase in GDP? Why might it not
lead to an increase in GDP?
Answer:
In what way does nationalism tend to be a hindering force in attaining modern
economic growth and development, and in what way a facilitating force?
Answer:
How did active government industrialization strategy and industrial policies, including
the collaboration between private and public sectors contribute to the East Asian
development success?
Answer:
According to the HRV growth diagnostic framework why is there no “one size fits all”
development policy?
Answer:
What are the characteristics of the poor (be specific)?
Answer: