Increasing GNP is a necessary but not a sufficient condition for improving living
standards in less developed countries. True or false, explain.
Answer:
An argument supporting promotion of the urban informal sector is
(a) the formal sector is incapable of providing enough employment.
(b) informal sector workers are poorly educated.
(c) it uses a relatively high capital intensity.
(d) it would reduce urban bias.
Answer:
Which of the following geographic regions is expected to experience the largest
percentage increase in its population between 2003 and 2050?
(a) Asia and Oceania.
(b) Latin America.
(c) North America.
(d) Africa.
Answer:
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.
Answer:
Which of the following is not a type of portfolio investment?
(a) Investment in stocks.
(b) Multinational corporation investment.
(c) Investment in commercial paper.
(d) All are types of portfolio investment.
(e) None are types of portfolio investment.
Answer:
Which of the following is not a policy proposal of the neoclassical counter-revolution
school?
(a) promoting free trade
(b) privatizing state-owned enterprises
(c) welcoming multinational corporations
(d) promoting trade unions
Answer:
The hidden momentum of population growth is caused by
(a) the demographic transition.
(b) population age structure.
(c) the opportunity cost of a woman’s time.
(d) children’s contribution to income.
Answer:
Sharecropping can be best understood as
(a) a type of agreement preferred by peasants.
(b) a type of agreement preferred by landlords.
(c) a compromise between peasant and landlord preferences.
(d) a type of agreement preferred by neither but given by tradition.
Answer:
The linear stages theory of economic growth fails to recognize that increased
investment is
(a) both a necessary and a sufficient condition.
(b) a necessary but not a sufficient condition.
(c) a sufficient but not a necessary condition.
(d) neither a necessary nor a sufficient condition.
Answer:
For what percentage of urban population growth is rural-urban migration responsible?
(a) between 35% and 60%.
(b) between 40% and 80%.
(c) between 50% and 70%
(d) between 50% and 90%.
Answer:
Which of the following factors makes the success of economic integration more likely?
(a) Nationalism.
(b) Desire for prestige projects.
(c) Diverse economic systems.
(d) All of the above.
(e) None of the above.
Answer:
A major cause of environmental degradation in developing countries is
(a) population growth.
(b) rural poverty.
(c) rapid urbanization.
(d) all of the above.
Answer:
Which of the following is an assumption of the Lewis two-sector model?
(a) surplus labor in the rural sector
(b) high unemployment in the urban modern sector
(c) rising real urban wages
(d) rising marginal product of labor in the rural sector
Answer:
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.
Answer:
In the public choice (or new political economy) approach to development the emphasis
is on
(a) growth in the rural sector.
(b) the self-interested behavior of public officials.
(c) the dependence of LDCs on former colonial powers.
(d) the inherent efficiency of developing country markets.
Answer:
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:
Currency substitution means
(a) use of money instead of barter.
(b) use of countertrade instead of money.
(c) use of foreign exchange instead of domestic currency.
(d) all of the above.
(e) none of the above.
Answer:
Debt service payments appear in
(a) the current account.
(b) the capital account.
(c) the cash account.
(d) errors and omissions.
Answer:
The largest recipient of remittances in dollars in the year 2008 was:
(a) India.
(b) Mexico.
(c) Pakistan.
(d) Philippines.
Answer:
The fact that developed countries have strong, widely attended university systems
indicates that
(a) university expansion should be a development priority.
(b) universities teach skills used on the job.
(c) developing countries place too much stress on agriculture.
(d) none of the above.
Answer:
The number of people in the world who are absolutely poor is closest to
(a) a quarter-billion.
(b) a half-billion.
(c) one and a half billion.
(d) two billion.
(e) four billion.
Answer:
Which of the following is not an indicator that is used by the World Bank in measuring
the level
of economic development?
a. life expectancy at birth.
b. adult literacy rate.
c. infant mortality rate.
d. all of the above are not used by the World Bank.
Answer:
The opening of export markets for primary products can provide employment for
previously underutilized land and labor. The term for this is
(a) vent for surplus.
(b) comparative advantage.
(c) Prebisch-Singer thesis.
(d) barter trade.
Answer:
Which of the following policies might increase labor intensity in industry?
(a) a decline in the cost of credit
(b) a decline in the minimum wage rate
(c) a decline in the elasticity of substitution
(d) all of the above.
Answer:
Provide a concise statement on the relationship between multinational corporation
investment and economic activity in developing countries with respect to: (a) the three
gaps, (b) comparative advantage, (c) the debt crisis, (d) scale economies, and (e) pattern
of consumption.
Answer:
The Ahluwalia-Chenery welfare index
(a) is a method used to measure changes in absolute poverty.
(b) shows the value judgement implications of using the change in income per capita as
a measure of the change in development.
(c) is a method used to measure changes in inequality.
(d) is a method used to measure the growth rate of GDP.
Answer:
Among the rationales for state owned enterprises is
(a) existence of monopoly.
(b) the need for capital formation.
(c) desirability of national control over strategic sectors of the economy.
(d) all of the above.
(e) none of the above.
Answer:
Developing countries have not benefited as much as expected from their higher
education programs because of
(a) lack of program focus on the needs of the country.
(b) increasing returns to scale in each individual’s education.
(c) graduates get jobs in the private sector.
(d) all of the above.
Answer:
During the 1990s, food production increased faster than population in all regions of the
developing world except
(a) Latin America.
(b) East Asia.
(c) Sub-Saharan Africa.
(d) none of the above.
Answer:
What fraction of developing countries have recently experienced some form of
significant interethnic conflict?
a. less than one-tenth
b. a tenth to one-quarter
c. one quarter to one half
d. over one half
Answer:
Which of the following African countries has experienced widespread death and
destruction due to ethnic or clan based conflict in the previous decade?
a. Rwanda
b. Sudan
c. Somalia
d. all of the above
Answer:
Why should the development of a solid elementary education system take precedence
over an expansion of the university system in developing countries?
Answer:
What are the key elements that need to be considered in developing an optimal
sequence of financial sector liberalization? Will the order differ across countries? Why
or why not?
Answer:
Explain why policies designed to reduce urban unemployment may not greatly reduce
poverty in developing countries.
Answer:
Is it possible for a super-entrepreneur to solve all of the coordination failure problems
within a developing economy? Discuss.
Answer:
Explain how group lending works.
Answer:
What is the role of input-output analysis in development planning? What are the
strengths and weaknesses of this technique?
Answer:
Make a case that development economics might be merely a combination of all the
other subfields of economics, only applied to low-income countries.
Answer:
Why is eradicating child labor seen as an economic investment?
Answer:
What is a Lorenz curve? Draw one, labeling the axes.
Answer:
If countries are first ranked by level of real GDP per capita, and then by the value of the
Human Development Index, would you expect the ranking of countries to be similar or
different? Explain.
Answer:
Discuss the reasons why developing countries so often use a technology with an
excessively high capital labor ratio.
Answer:
The real price trendline for non fuel primary commodities from 1960-2005 has been
A. Unchanged
B. Steadily increasing
C. Steadily decreasing
D. First decreased and then increased.
Answer:
Explain the concept, goals, and methods of integrated rural development.
Answer:
What are the major differences between the new HDI and the original HDI?
Answer:
How did the Mexican debt crisis of the early 1980s come about? How has the Mexican
economy coped during the past 20 years, in the aftermath of the debt crisis? What has
been the legacy of the debt crisis for the Mexican economy?
Answer:
Evaluate critically the following statement: The developed countries have all shown a
significant increase in the numbers of university-trained workers as incomes have risen;
thus the development
of a solid university system should be among the major priorities of developing
countries.
Answer: