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:
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) sharecropping.
Answer:
Which of the following is a reason for the failure of development plans?
(a) unreliable data.
(b) unanticipated economic disturbances.
(c) lack of political will.
(d) all of the above.
(e) none of the above.
Answer:
Which of the following environmental problems are largely caused by persistent
poverty?
(a) Deforestation.
(b) Soil erosion.
(c) Ground water contamination.
(d) All of the above.
Answer:
A situation in which government intervention in the economy worsens the economic
outcome is termed
(a) neoclassical failure.
(b) socialism.
(c) government failure.
(d) dependency revolution.
Answer:
An argument in favor of foreign direct investment is that it tends to
(a) reduce inequality.
(b) promote rural development.
(c) increase access to modern technology.
(d) decrease local ownership.
(e) none of the above.
Answer:
Which of the following was not a factor contributing to the debt crisis in Latin
America?
(a) The oil shocks.
(b) Trade liberalization in many developing countries.
(c) An increase in global interest rates.
(d) A lack of investment opportunities in the developed countries.
(e) All of the above.
Answer:
Kuznets’ inverted-U hypothesis
(a) implies that things must get worse before they get better.
(b) suggests that inequality will worsen and then improve as a country grows.
(c) suggests that inequality will improve and then worsen as a country grows.
(d) points out six characteristics of modern economic growth.
Answer:
Crops produced entirely for the market are known as
(a) basic crops.
(b) mixed crops.
(c) hybrid crops.
(d) cash crops.
Answer:
The market-friendly approach to development emphasizes
(a) self-interested behavior of public officials in LDCs.
(b) the dependence of LDCs on former colonial powers.
(c) the inherent efficiency of markets in developing countries.
(d) that markets in LDCs fail sometimes and selective interventions can promote
economic development.
Answer:
In endogenous growth models, it is assumed that
(a) there are external economies from public or private investments.
(b) there are diminishing marginal returns to capital.
(c) growth is explained by forces outside the model.
(d) the capital-labor ratio is constant.
Answer:
A significant problem of a dual exchange rate system is that it
(a) is difficult to administer.
(b) leads companies to pursue rent-seeking behavior.
(c) promotes black markets.
(d) all of the above.
(e) none of the above.
Answer:
The price reflecting the true social opportunity costs of a resource is known as
(a) a shadow price.
(b) an equilibrium price.
(c) a world price.
(d) a price index.
Answer:
Which of the following approaches does not offer an international dependence
explanation of underdevelopment?
(a) the false paradigm model
(b) the neoclassical counter-revolution
(c) the dualistic development model
(d) the neocolonial dependence model
Answer:
If the rural wage is 4 and the formal urban wage rate is 10, there will be rural to urban
migration if the formal urban unemployment rate is
(a) 50%
(b) 60%
(c) 70%
(d) all of the above
Answer:
Provide a concise statement on the relationship between the debt crisis and: (a) foreign
direct investment, (b) trade liberalization, (c) absolute poverty, and (d) investment
levels.
Answer:
Studies show that improved education of women in developing countries leads to
(a) lower infant mortality.
(b) better designed, market based development policies.
(c) lower international dependence.
(d) all of the above.
Answer:
The need for exchange controls may arise from
(a) overvalued exchange rates.
(b) export promotion policies.
(c) a current account surplus.
(d) all of the above.
Answer:
(a) Under what circumstances is the effective rate of protection of a tariff greater than
the nominal rate? (b) Why is this a concern for developing countries?
Answer:
Which of the following is not an indicator that is used to compute the Human
Development Index?
a. life expectancy at birth.
b. real GDP per capita.
c. infant mortality rate.
d. adult literacy rate.
Answer:
On which of the following does the neoclassical counter-revolution school most blame
underdevelopment?
(a) misguided government policies
(b) relatively rigid cultural traditions
(c) the legacy of colonialism
(d) unfair trade practices on the part of developed countries
Answer:
The 2002 World Development Report provides the following information for Colombia
and Thailand:
(a) Explain carefully what each of the entries in the final four columns of this table
measures. What concepts are being presented and what is their importance to economic
development?
(b) The table above shows that Colombia and Thailand are roughly at the same level of
economic development as measured by the level per capita national income. Their
performance in terms of poverty indicators is quite different. What factors may
contribute to their differing performance?
Answer:
A shadow price is:
(a) the price in the previous period.
(b) the price in the next period.
(c) the social value of a good or service.
(d) the market value of a good or service.
(e) none of the above.
Answer:
The Malthusian population trap model has been criticized on the grounds that it
(a) ignores the role of technological progress.
(b) assumes that population growth is primarily determined by individual choice over
the number of children to have.
(c) both (a) and (b) are correct.
(d) neither (a) nor (b) is correct.
Answer:
Guiding the market through strategic coordination of business investments to increase
export market shares is known as
(a) development planning.
(b) industrial policy.
(c) shifting terms of trade.
(d) all of the above.
(e) none of the above.
Answer:
An example of a biomass fuel is
(a) coal.
(b) nuclear fuel.
(c) manure.
(d) oil.
Answer:
With modern sector enlargement growth, inequality will
(a) first rise and then fall.
(b) first fall and then rise.
(c) remain about the same.
(d) all of the above.
Answer:
Explain the case for land reform in Latin America. Are there any potential negative
effects? What steps could be taken to address these effects?
Answer:
The world rate of population growth is closest to
(a) 1%.
(b) 2%.
(c) 3%.
(d) 4%.
Answer:
About what percent of the world’s poorest people are female?
(a) 30
(b) 50
(c) 70
(d) 90
Answer:
Which of the following is an argument in favor of trade liberalization?
(a) Increased investment.
(b) Infant industry.
(c) Fluctuating export earnings.
(d) Increased government revenue.
Answer:
As the number of years of schooling completed increases, the expected private return
and private cost of education
(a) increase at roughly the same rate.
(b) increase at different rates with expected private return increasing at a slower rate
than private cost.
(c) increase at different rates with expected private return increasing at a faster rate than
private cost.
(d) do not increase.
Answer:
Development economics is the study of the
a. alleviation of absolute poverty.
b. transformation of institutions.
c. allocation of resources in developing countries.
d. all of the above.
Answer:
Suppose that, for example in India, a minimum wage is instituted in the modern sector
above the market clearing wage, while the rural traditional wage is market determined
at a lower level than in the modern sector.
(a) Describe the impact of this policy on the rural labor force, urban unemployment,
and the rural wage.
(b) Will the modern sector wage be equal to the traditional sector wage after markets
equilibrate through migration? Explain.
(c) What effect might moving costs have on the equilibrium you described in part (b)?
(d) What effect might the introduction of factories to rural areas have no the equilibrium
you described in part (b)?
Answer:
The developing area receiving the largest share of direct foreign investment is
(a) Africa.
(b) Asia.
(c) Latin America.
(d) Transition economies.
Answer:
Explain what is meant by market failure.
Answer:
Does it matter how much a developing country saves? Explain why or why not. Discuss
theories and evidence on whether developing countries can increase the net savings rate
in the economy through public policy. In particular, consider whether this can be
accomplished through increased or decreased taxation of one or more types, and
increased or decreased government spending of one or more types.
Answer:
What are the key ingredients of Taiwan’s successful entry into world markets? What
lessons can other developing countries draw from Taiwan’s experience with global
markets?
Answer:
In what way is better protection of the environment a possible result of successful
development?
Answer:
How will global warming and climate change adversely impact the “poor,” particularly
in developing nations?
Answer:
Explain how the S-curve reflects the typical nature of complementarities?
Answer:
Explain the difference between nominal and effective tariffs.
Answer:
What are some of the strategies that have been proposed to mitigate global warming at a
macro level?
Answer:
Explain what is meant by “investment in children,” describing the goals and methods of
the parents.
Answer:
Has population growth been a burden for China? Please answer true or false and
explain.
Answer:
Explain what developed countries can do to respond constructively to the
environmental damage being done in developing countries.
Answer:
State three major potential advantages of foreign direct investment for a developing
country. State three major potential disadvantages.
Answer:
You are a lobbyist hired by a less developed country to try to prevent a developed
country from increasing trade barriers against labor-intensive manufactured imports
such as textiles. Make your case, arguing from both developed and developing country
perspectives, in terms of who gains and who loses.
Answer:
Consider debt-equity swaps as an approach to debt reduction. Brieflydescribe how this
works. State two arguments in favor of significant reliance on this strategy and two
arguments against.
Answer:
Patterns of development or structural change analysis stress internal change in a
developing country’s economic, industrial, and institutional structure. What are some of
the most important changes?
Answer:
Is a coordination failure a type of market failure? Explain.
Answer:
Explain how international trade and trade policy helped Taiwan transform itself from an
underdeveloped country to a high income country in a relatively short span of time. You
might begin by discussing Taiwan’s trade strategy. Why do you think international trade
is of such vital importance to Taiwan?
Answer:
What are the Millennium Development Goals (MDGs) and how did they come about?
What do you consider to be the most important of these and why?
Answer:
What three factors distinguish models of endogenous growth from their neoclassical
counterparts?
Answer: