Book Title
Economic Development 11th Edition

MicroEconomic 37731

December 15, 2016
The poverty gap is the
(a) absolute number of people below the international poverty line.
(b) percentage of the population below the international poverty line.
(c) consumption (measured in dollars) necessary to bring everyone below the poverty
line up to the line.
(d) percentage of a country's total consumption necessary to bring everyone in the
country below the poverty line up to the line.
An agrarian system refers to
(a) the pattern of land ownership.
(b) the type of crops grown.
(c) the processing of agricultural commodities.
(d) an economy that has no industry.
A major cause of environmental degradation in developing countries is
(a) debt for nature swaps.
(b) poverty.
(c) a lack of public transportation.
(d) land reform.
The World Bank approach to combating child labor stresses
(a) making child labor legal under certain conditions.
(b) tackling the sources of poverty.
(c) encouraging families to migrate to richer countries.
(d) providing each child with a computer so that children have an alternative to
Which of the following countries meets regularly the UN target for the provision of
foreign aid (as a percent of GNI)?
(a) Japan.
(b) United States.
(c) Denmark.
(d) France.
Women bear a disproportionate burden in the agrarian system of Sub-Saharan Africa,
Asia and Latin America. In addition their productivity is low. Explain these statements
with specific examples from individual developing economies. What measures/policies
have been implemented to deal with these two issues? Once again discuss with specific
examples from individual developing economies.
An example of a market-facilitating legal practice is
(a) clearly established property rights.
(b) corruption of government officials.
(c) extensive licensing requirements for starting firms.
(d) all of the above.
(e) none of the above.
The Malthusian population trap assumes that
(a) contraception is unavailable.
(b) technological progress may be rapid.
(c) fertility increases with per capita income.
(d) all of the above.
The debt service ratio is the ratio of
(a) external debt to the size of the service sector.
(b) external debt to total GNP.
(c) internal debt to the size of the service sector.
(d) internal debt to total GNP.
(e) none of the above.
Exchange of developing country debt (at a discount) for private ownership of
state-owned assets is called
(a) debt-equity swaps.
(b) debt restructuring.
(c) the Brady Plan.
(d) debt-nature swaps.
A program through which new ideas, methods, and advice are offered to farmers to
increase farm yields is known as
(a) agricultural extension.
(b) agricultural mechanization.
(c) an agrarian system.
(d) land reform.
A motivation of developed countries in providing development assistance is
(a) the creation of markets.
(b) geopolitical influence.
(c) genuine humanitarian concern.
(d) all of the above.
(e) none of the above.
In most less developed countries, the initial target of import substitution is to promote
domestic production of
(a) consumer goods.
(b) food and other agricultural goods.
(c) capital goods.
(d) manufactured intermediate goods.
The functional distribution of income refers to the distribution of income between
(a) individuals or households.
(b) rural individuals or households.
(c) urban individuals or households.
(d) the factors of production (land, labor and capital).
Which of the following factors has led to poor plan performance?
(a) unanticipated changes, such as in terms of trade.
(b) corruption of government officials.
(c) foreign firms are less subject to the constraints of the plan than domestic ones.
(d) all of the above.
(e) none of the above.
Approximately how many women were estimated to be "missing" in China?
(a) 20-30 million
(b) 35-48 million
(c) 44-50 million
(d) 52-58 million
The debt service ratio is defined as
(a) the ratio of total debt to export earnings.
(b) the ratio of total debt to GDP.
(c) the ratio of payments on foreign debt to export earnings.
(d) the ratio of payments on foreign debt to GDP.
The most important role of the World Trade Organization is
(a) to promote market oriented economic policies.
(b) to settle trade disputes.
(c) to provide development assistance.
(d) to help countries choose the appropriate level of a tariff or quota.
The number of units of developing country currency required to purchase a basket of
goods and services in a developing country that costs one dollar in the U.S. is given by
a. GNP price deflator.
b. Human Development Index ranking.
c. purchasing power parity.
d. the exchange rate.
Which of the following is an important factor in the success of agrarian land reform
(a) the introduction of sharecropping.
(b) the introduction of tenant farming.
(c) farmer training programs.
(d) the introduction of more capital intensive methods.
During 19902003, as a percentage of total resource flows to developing countries, the
share of official flows has
(a) remained relatively constant.
(b) increased by a relatively small percentage.
(c) increased by a relatively large percentage.
(d) decreased by a relatively small percentage.
(e) decreased by a relatively large percentage.
Among the benefits of privatization of state owned enterprises is
(a) increased employment.
(b) improved efficiency.
(c) reduced pollution.
(d) all of the above.
(e) none of the above.
If the incremental capital output ratio is 3 and the ratio of saving to national income is
9%, according to the Harrod-Domar model the growth rate of income is
(a) zero.
(b) 3%.
(c) 6%.
(d) 12%.
Which of the following is an objective of macroeconomic stabilization?
(a) eliminating current account deficits.
(b) controlling inflation.
(c) restoring fiscal balance.
(d) all of the above.
Which of the following is a direct implication of the view that childbearing is an
economic decision?
(a) People will not have additional children unless they can earn a profit from doing so.
(b) Social factors have no effect on childbearing decisions.
(c) Compulsory education will increase fertility because educated children have the
potential to earn higher salaries.
(d) Fertility should fall with improved opportunities for women to work in jobs outside
the home.
Child labor is a widespread problem that applies primarily to children
(a) between the ages of 5 and 14.
(b) between the ages of 10 and 14.
(c) between the ages of 12 and 14.
(d) between the ages of 12 and 16.
About how many malnourished children under age five are there in the developing
a. 20 million
b. 150 million
c. 500 million
d. 1 billion
e. 2 billion
One of the significant criticisms of MNCs is
(a) the relatively low wages they pay.
(b) on balance they bring in more capital than officially registered.
(c) increased monetary policy effectiveness.
(d) all of the above.
(e) none of the above.
Which of the following would most likely reduce the birthrate?
(a) public health improvements
(b) an increase in child mortality
(c) a decline in the availability of secondary education
(d) a reduction in the opportunity cost of a woman's time
(e) all of the above.
It is important to place particular stress on the role of primary education in the
development strategy because of
(a) LDC's comparative advantage from basic skills education.
(b) the law of diminishing returns.
(c) development emphasis on poverty alleviation.
(d) all of the above.
What conclusion can be reached from the following data on income shares?
(a) absolute poverty is more widespread in Bangladesh
(b) the size distribution of income is more unequal in Indonesia
(c) Bangladesh had adopted a strategy of redistribution with growth
(d) growth in Bangladesh is calculated using poverty weights rather than income
Education of girls is a crucial development investment because
(a) it leads to improved child health.
(b) it leads to reduced fertility.
(c) women do most of the work in agriculture.
(d) all of the above.
According to the Prebisch-Singer thesis
(a) demand for primary products has steadily fallen.
(b) profits of primary producers have steadily fallen.
(c) primary producers' terms of trade have steadily fallen.
(d) prices of primary products have risen over time.
Which region in the world has the lowest GNI per capita based on the World Bank Atlas
a. Sub-Saharan Africa
b. East Asia/Pacific
c. South Asia
d. Latin America/The Caribbean
One of the characteristics of financial repression is
(a) negative real interest rates.
(b) lack of credit rationing.
(c) capital flowing to the highest rate of return.
(d) all of the above.
(e) none of the above.
Describe the costs of water pollution.
Explain why purchasing power parity measures of income levels tend to show a smaller
difference between poor and rich countries.
What factors cause private and social rates of return for primary and secondary
education to diverge in developing countries?
What are the key characteristics of the agrarian system in Asia that distinguish it from
that of Latin America? Explain your answer.
As an agent of economic development, in what areas do NGOs have a comparative
advantage, compared to governments or markets?
Is child labor a problem in developing countries? Explain.
Why may the debt crisis be only 'sleeping" rather than "dead?"
How is happiness related to development?
Are living standards in developed and developing countries converging? Give evidence
to support your answer.
Discuss the relationship between poverty, growth and the environment.
Explain how a better educated population will also tend to be healthier, and vice versa,
that a healthier population will tend to be better educated.
Critically evaluate the following statement: Government policies to keep the price at
which staple foods are bought and sold low helps to reduce poverty and inequality.
In the Harrod-Domar model, if the savings rate is 20% and the incremental capital
output ratio is five, abstracting from depreciation, what is the implied growth rate?
What are remittances and what role do they in developing countries? How could this
potentially benefit an economy?
What are the primary causes of armed conflict in developing countries and what
increases the risk factor for these conflicts?
What are the most important characteristics that have shaped Brazil's economic and
social progress during the last three decades?
Why does investment by multinational corporations not necessarily help to close the
foreign exchange gap.
What are some of the main ways in which the economies of developing countries differ
from one another?
Briefly explain the major argument of the factor endowment trade theory.

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