Course Introduction
Economic Development
Exam Materials
This course offers an in-depth exploration of the theories, policies, and challenges associated with economic development in low and middle-income countries. Students examine the historical context and modern dynamics that shape development, including factors such as poverty, inequality, education, health, and globalization. Through analysis of case studies and empirical evidence, the course investigates the roles of institutions, governance, and international organizations in promoting economic growth. Students also critically assess the effectiveness of various policy interventions and strategies aimed at achieving sustainable and inclusive development.
Recommended Textbook
Economic Development 10th Edition by Michael
P. Todaro
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16 Chapters
500 Verified Questions
500 Flashcards
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Page 2
Chapter 1: Economics, Institutions, and Development: a Global Perspective
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22 Verified Questions
22 Flashcards
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Sample Questions
Q1) 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: D
Q2) What are the most important characteristics that have shaped Brazil's economic and social progress during the last three decades?
Answer: Discussion should include the large degree of income inequality, the need for land reform as a result of the dualistic nature of the land tenure system and the environmental challenge faced by what is one of the world's most environmentally diverse countries.
Q3) The Millennium Development Goals include
A)eliminating the proportion of people living on less than $1 per day.
B)universal primary education.
C)increasing exports by one half.
D) all of the above.
Answer: B
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Chapter 2: Comparative Economic Development
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39 Verified Questions
39 Flashcards
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Sample Questions
Q1) An example of an upper-middle income country is A)India.
B)Brazil.
C)Indonesia.
D) Nigeria.
Answer: B
Q2) The dependency burden is
A)a measure of the degree to which the less developed countries are dependent on the rich industrial countries.
B)the average number of children that a woman gives birth to during her lifetime. C)the number of babies born per 1000 persons.
D) the percent of the population that is below 15 and above 65 years of age.
Answer: D
Q3) 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: This is a question that would depend on what you have covered in lecture.
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Chapter 3: Classic Theories of Economic Growth and Development
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31 Verified Questions
31 Flashcards
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Sample Questions
Q1) During the past decade, India has invested about 22% of its GDP while China's investment rate has been double that of India's. India's annual growth rate has been about 6% while that of China has been about 9%. What conclusions can you draw?
Answer: Students are asked to relate investment rates to the rate of economic growth through the Harrod-Domar model. The students should calculate the ICOR for the two countries and note that India's ICOR (about 3.67) is lower than China's (about 5).
Q2) 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: D
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Chapter 4: Contemporary Models of Development and Underdevelopment
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21 Verified Questions
21 Flashcards
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Sample Questions
Q1) How can the O-ring theory help explain the existence of a low-level equilibrium that an economy may find itself in?
Q2) The Solow residual helps explain growth that derives from A)increasing the size of the labor force.
B)increasing the size of the capital stock.
C)increasing the capital labor ratio.
D) anything except increases in the size of the labor force or the capital stock.
Q3) Is a coordination failure a type of market failure? Explain.
Q4) Show in a diagram an S-curve and a 45-degree line. Are all three points of intersection stable equilibrium points? Explain.
Q5) The Big-Push theory argues that coordination failures may arise because of A)pecuniary externalities.
B)technological externalities.
C)lack of human capital.
D) All of the above.
Q6) According to the HRV growth diagnostic framework why is there no "one size fits all" development policy?
Q7) What is meant by the term technological spillover?
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Chapter 5: Poverty, Inequality, and Development
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44 Verified Questions
44 Flashcards
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Sample Questions
Q1) 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
Q2) Using a Lorenz curve diagram, explain how to calculate the Gini coefficient.
Q3) According to Kuznets, in the process of development inequality in an economy will normally
A)first rise and then fall.
B)first fall and then rise.
C)remain about the same.
D) show no definite pattern.
Q4) Discuss the benefits of using a "poverty weighted" index of GNP growth as a measure of social welfare as opposed to using the growth in GNP to measure change in social welfare.
Q5) Discuss some policies or strategies that would give firms an incentive to substitute labor for capital within modern production techniques.
Q6) About how many people are living in extreme poverty in the world? Which regions have the greatest percentages of people living in extreme poverty?
Page 7
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Chapter 6: Population Growth and Economic Development:
Causes, Consequences, and Controversies
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32 Flashcards
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Sample Questions
Q1) India's population is expected to overtake that of China within the next decade. What differences between these two nations could have contributed to this outcome?
Q2) 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.
Q3) Has population growth been a burden for China? Please answer true or false and explain.
Q4) In Stage III of the demographic transition,
A)the birth rate and the death rate are relatively low.
B)the birth rate and the death rate are relatively high.
C)the birth rate is relatively high and the death rate is relatively low.
D) the birth rate is relatively low and the death rate is relatively high.
Q5) What are some of the differences between the population policies of China and India? What factors may have contributed to their success or failure?
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Chapter 7: Urbanization and Ruralurban Migration: Theory and Policy
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23 Verified Questions
23 Flashcards
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Sample Questions
Q1) Even though women often constitute the majority of the rural-urban migrants in a country, they usually still remain employed in the informal sector. Why? What are the consequences of this?
Q2) According to UN projections, what proportion of the world's urban population will reside in the urban areas of developing countries by 2025?
A)Two fifths
B)One half
C)Two thirds
D) Four fifths
Q3) What are the characteristics of those who migrate to urban areas? What positive and negative effects does their leaving have on those who remain?
Q4) 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.
Q5) Describe some of the benefits and costs associated with the emergence of large cities in developing countries.
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Chapter 8: Human Capital: Education and Health in Economic Development
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34 Verified Questions
34 Flashcards
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Sample Questions
Q1) 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.
Q2) 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
Q3) Why have poor nations invested so much money in education and health? Evaluate the soundness of these reasons.
Q4) Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer.
10
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Chapter 9: Agricultural Transformation and Rural Development
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30 Verified Questions
30 Flashcards
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Sample Questions
Q1) 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.
Q2) 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
Q3) 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.
Q4) What are the primary determinants of agricultural labor productivity?
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Chapter 10: The Environment and Development
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25 Verified Questions
25 Flashcards
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Sample Questions
Q1) Which of the following conditions is violated if there is a free rider problem?
A)Universality
B)Exclusivity
C)Transferability
D) Enforceability
Q2) The free rider problem is a situation in which
A)effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical.
B)one agent secures benefits that others pay for.
C)there are excessive subsidies given to polluting buses or other forms of mass transit. D) perfect property rights exist.
Q3) In what way is better protection of the environment a possible result of successful development?
Q4) Explain what developed countries can do to respond constructively to the environmental damage being done in developing countries.
Q5) Why might it be in the direct economic interest of the United States to finance rain forest conservation programs in the Amazon?
Q6) Provide a short definition of sustainable development.
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Chapter 11: Development Policymaking and the Roles of
Market, State, and Civil Society
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) What is the role of input-output analysis in development planning? What are the strengths and weaknesses of this technique?
Q2) 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
Q3) 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.
Q4) What economic benefits might a developing country gain by reducing corruption? Discuss only economic benefits and provide examples from specific developing countries.
Q5) In the Harrod-Domar growth model, if 12.5% of income is saved, the incremental capital output ratio is 2.5 and the rate of depreciation is 4%, what is the implied rate of growth?
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Chapter 12: International Trade Theory and Development Strategy
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57 Flashcards
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Sample Questions
Q1) 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.
Q2) Developing countries might be unable to respond smoothly to changing international price signals because of A)a lack of government regulation.
B)an abundance of skilled labor.
C)inelastic supply curves.
D) limited foreign exchange.
Q3) In most LDCs 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.
Q4) Briefly explain the major argument of the factor endowment trade theory.
Page 14
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Chapter 13: Balance of Payments, Developing-Country
Debt, and the Macroeconomic Stabilization Controversy
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33 Verified Questions
33 Flashcards
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Sample Questions
Q1) Debt service payments appear in
A)the current account.
B)the capital account.
C)the cash account.
D) errors and omissions.
Q2) Discuss the options for financing a balance of payments deficit.
Q3) 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.
Q4) 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.
Q5) What is meant by the term odious debt?
Q6) Explain what is meant by capital flight. How would you distinguish capital flight from the normal desire of investors to diversify their portfolios by investing abroad?
Page 15
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Chapter 14: Foreign Finance, Investment, and Aid: Controversies
and
Opportunities
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Sample Questions
Q1) The developing area receiving the largest share of direct foreign investment is/are A)Africa.
B)Asia
C)Latin America.
D) transition economies.
Q2) 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.
Q3) 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.
Q4) Critically evaluate the following statement: "If no other assistance is available, tied aid should be accepted anyway, on the grounds that developing countries should accept any help they can get."
Q5) Explain the motives of developed countries in providing foreign aid.
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Chapter 15: Finance and Fiscal Policy for Development
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Sample Questions
Q1) Compare and contrast the experience of Poland and Chile in their efforts at privatizing SOEs. Make sure you include a background discussion of privatization, methods adopted, and outcomes of privatization in the two countries.
Q2) 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
Q3) Among the rationales for state-owned enterprises is
A)the existence of a monopoly.
B)the need for capital formation.
C)the desirability of national control over strategic sectors of the economy.
D) all of the above.
E) none of the above.
Q4) Describe the costs and benefits of privatization of state-owned enterprises. In which cases would privatization seem most advisable?
Q5) 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?
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Chapter 16: Some Critical Issues for the Twenty-First Century
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Sample Questions
Q1) The first Earth Summit of 1992 was held in A)Kyoto.
B)Rio de Janeiro.
C)Johannesburg.
D) Beijing.
Q2) The developing region in which per capita income, food production, and industry have declined ?over an extended period is
A)sub-Saharan Africa.
B)East Asia.
C)Lain America.
D) South Asia.
E) all of the above.f.none of the above.
Q3) Maintaining the rain forest is very important because of A)its absorptive capacity for CO emissions.
B)maintaining agricultural production of countries dependent on the rain forest, such as Brazil.
C)ensuring a successful land reform policy.
D) all of the above.
Q4) Explain how the cost of rain forest preservation can be lowered for developing countries?
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