Globalization and Development Test Questions
Course Introduction
This course explores the complex relationship between globalization and development, examining how the increasing interconnectedness of economies, societies, and cultures impacts growth and inequality across the world. Students will analyze key theories and debates surrounding globalization, assess the roles of international institutions, and investigate case studies from both developed and developing countries. Topics include trade liberalization, foreign investment, technology transfer, migration, and the effects of global governance on policy-making. The course aims to provide a nuanced understanding of both the opportunities and challenges posed by globalization in achieving sustainable and equitable development.
Recommended Textbook
Development Economics Theory Empirical Research and Policy Analysis 1st Edition by Julie Schaffner
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Chapter 1: What Is Development Economics Good
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Sample Questions
Q1) Development is most successful when
A) The assets that are distributed and employed in ways that limit their benefit to society as a whole
B) The assets are of high quality and durability
C) An economy creates a small quantity of assets for a select few
D) All of the above
Answer: B
Q2) Asset creation policies include:
A) the government hiring a contractor to build a road
B) social assistance programs providing food to the poor
C) government taxation and subsidies
D) tariffs and other polices aimed at encouraging or discouraging international trade
Answer: A
Q3) Which of the following is NOT true about rural Ethiopia?
A) Most people live on less than $2 a day
B) Most people do not have access to clean water
C) Most people have one or two children
D) Most people have never been enrolled in school
Answer: C
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Page 3
Chapter 2: Well-Being
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Sample Questions
Q1) All of the following are considered as consumption smoothing except:
A) eating two good meals every day rather than having several three-meal days followed by several one-meal days
B) spending less on daily basis to save for dowries for daughters or bride prices for sons
C) if households have fewer or smaller fluctuations,they are willing to accept lower average consumption
D) households take out a loan to spend more than their current income even if it means they have to consume much less in the future
Answer: D
Q2) What is the normal interest rate charged on a howlats loan?
A) 0%
B) 3.5%
C) 5%
D) 10%
Answer: A
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Chapter 3: Economic Growth
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Sample Questions
Q1) The average product of labor ( \[A P _ { L }\] )is the equal to A) total quantity of labor employed divided by the total output.
B) total amount of output produced divided by price of the output.
C) the increase in total output.
D) total amount of output produced divided by the quantity of labor employed.
Answer: D
Q2) The marginal product of labor ( \[M P _ { L }\] )is the increase in total output associated with a
A) one unit increase in the quantity of labor,while holding the quantity of capital and technology constant.
B) one unit increase in the quantity of labor,while also increasing the quantity of capital by one unit and technology constant.
C) one unit increase in the quantity of labor,while also increasing the quantity of capital and technology by the same proportion.
D) one dollar increase in the price of labor,while holding the price of capital constant.
Answer: A
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Chapter 4: Economic Growth Theory in Historical Perspective
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Sample Questions
Q1) In the Lewis model,in the capitalist sector,worker are paid the value of marginal product of labor is
A) zero.
B) positive.
C) negative.
D) determined in the labor market.
Q2) According to the Lewis model,workers are paid a wage that is ________ in the capitalist sector.
A) determined in the labor market by labor demand and supply
B) equal to the subsistence wage
C) equal to the subsistence wage plus a premium to compensate workers for moving.
D) they do not get paid in terms of wages
Q3) Endogenous variables are:
A) given from outside the model.
B) determined by solving the system of equations.
C) assumptions of the model.
D) fixed.
Q4) What is the significance of possible increasing returns to scale for our understanding of economic growth?
Chapter 5: Poverty,Inequality and Vulnerability
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Sample Questions
Q1) If all incomes in an economy were rising,but the incomes of the richest people were rising faster than the incomes of the poorest,this would be a success by the criterion of A) absolute poverty reduction.
B) inequality reduction.
C) both a and b.
D) neither a nor b.
Q2) To construct a Lorenz curve measuring the distribution of per capital household income,we order everyone in the population by:
A) consumption expenditure.
B) the number of children in the household.
C) age of head in the household.
D) income per capita
Q3) Which one should the priority of policymakers among economic growth,poverty reduction and inequality reduction?
A) growth.
B) poverty reduction
C) inequality reduction.
D) none of the above,it is complicated.
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Chapter 6: Consumption, Time Allocation and Production
Choices
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Sample Questions
Q1) Suppose there is a reduction in the price of food while consumers' income and the price of non-food stay the same,which of the following statement is true?
A) spending on food consumption will always increase.
B) budget line will rotate out from the endpoint on the axis of food.
C) budget line will rotate out from the endpoint on the axis of non-food.
D) the slope of the budget line will stay the same.
Q2) An indifference curve is ________.
A) all the combinations of food and non-food that consumers are able to afford.
B) all the combinations of food and non-food that consumers prefer equally.
C) a straight line.
D) downward sloping and concave (bowed out from the origin).
Q3) When consumers receive distributions of free rise,the quantities of rise they consume are likely to ________ and by ________ the quantity of rice received in the distribution.
A) rise; more than
B) rise; the same amount as C) rise,less than
D) the quantities of rise they consume are not going to change
Q4) Why is labor demand a derived demand? Explain.What is a linkage between markets?
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Chapter 7: Houesholds
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Sample Questions
Q1) In the Farm households model,Autarky labor quantity is determined when
A) a household has no access to labor markets
B) the quantity of labor it employs on its own farm equals to the quantity of labor it supplies
C) the farm labor demand schedule and the household labor supply schedule intersect
D) all of the above
Q2) If a farm household's net marketed surplus of food is negative,it means ________.
A) the household sells food in the market
B) the household buy food in the market
C) the household is losing money in the market
D) this household is a subsistence farm household
Q3) In the Wage labor households model,if there are simultaneous increases in food prices and wages,what will happen to the household's purchasing power?
A) increase
B) decrease
C) not change
D) ambiguous
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Chapter 8: Domestic Markets for Goods and Services
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Sample Questions
Q1) Why should governments and NGOs consider switching from food transfers to cash transfers?
A) Corruption
B) Distributing food discourages development by driving down local food prices and discouraging local agricultural production
C) Distributing food discourages development by driving up local food prices and discouraging local agricultural production
D) Governments should never switch from food to cash transfer programs
Q2) According to Figure 8.2,if we define LIP as the local import price,EP as the external market price,LEP as the local export price,and AP as the autarky price,and if trade with big city were possible,which panel describes a situation where buyers are importing beans from big city?
A) Panel a
B) Panel b
C) Panel c
D) That situation is not described by any of the panels
Q3) Why might private actors fail to undertake critical transfer cost-reducing investments despite the wide-ranging benefits that might emerge from transfer cost reductions?
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Page 10
Chapter 9: Labor Markets
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Sample Questions
Q1) Successful economic growth requires structural changes or
A) Changing the natural rate of unemployment
B) Shifts in the nature and location of economic activity
C) Increasing structural unemployment
D) Building new machines or factories
Q2) Employment in jobs that make poor use of their skills or employ only a fraction of the labor time they are willing to offer is referred to as:
A) Underemployment
B) Unemployment
C) Is not counted as employed or unemployed
D) Is a discouraged worker phenomenon
Q3) How can governments expand private sector training activities
A) They can provide training services
B) They can offer employee loans to us in purchasing job training
C) They can tax private employers
D) All of the above
Q4) Under which conditions can investments and innovations that lead to the same rate of economic growth make it more likely to channel benefits to low-wage workers than others?
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Chapter 10: Investment and Financial Markets
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Sample Questions
Q1) When considered how to finance an investment which requires an indivisible up-front cost,Fred has all of the following options except?
A) Saving
B) Paying in installments
C) borrowing
D) liquidating other assets
Q2) Suppose that only three states of the world - bad (b),normal (n)and good (g)- are possible,and suppose that the normal state occurs with probability 0.5,while the bad and good states each occur with probability 0.25.Consider two investment projects for which the returns in the three states are given in.The expected returns ______________.The variance for project 2 is ________making ___________ the better investment.
A) Are equal; larger; project 1
B) Are equal; smaller; project 1
C) Are close but not equal; larger; project 2
D) Are close but not equal; smaller; project 2
Q3) How do well-functioning markets for loanable funds encourage economic growth and allow a larger set of investors to participate in growth?
Q4) How do financial markets help economic growth?
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Chapter 11: International Markets and General Equilibrium
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Sample Questions
Q1) In the specific factors model,with trade,the owners of factors specific to the importing sector are ________,while the owners of factors specific to the exporting sector are
A) benefited; harmed
B) harmed; benefited
C) harmed; not affected
D) not affected; benefited
Q2) In the specific factors model,because of the diminishing returns to labor,which of the following statement is true?
A) Production possibilities frontier is a straight line.
B) Production possibilities frontier is bowed out from the origin.
C) Production possibilities frontier is bowed in toward the origin.
D) Production possibilities frontier can have any shape.
Q3) In the specific factors model,an increase in the world price of food will lead to:
A) an increase in the real earnings of land.
B) a decrease in the real earnings of land.
C) no change in the real earnings of land.
D) a decrease in the nominal wage in the food sector.
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Chapter 12: Institutions and Cooperation
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Sample Questions
Q1) In a two player non-cooperative game where neither player has a dominant strategy,
A) there is never a Nash equilibrium.
B) there can be multiple Nash equilibria.
C) there is only one Nash equilibrium.
D) the actual outcome is unpredictable.
Q2) Table 12.2 shows an example of:
A) the free rider problem
B) the public good problem
C) tragedy of the Commons
D) efficiency problem
Q3) In Nash equilibrium:
A) Only one player can change his payoffs by changing strategies
B) Both players can change strategies but neither can improve their payout
C) Neither player can change their strategy
D) Both player can change their strategy but only player can improve their payout
Q4) Why do community-level institutions in developing countries merit close study? Provide three reasons.
Q5) What is the important lesson that the prisoners' dilemma game show us?
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Chapter 13: Policy Governance and Political Economy
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Sample Questions
Q1) How can we explain the increasing MPC curve in figure 13.1 a?.
A) Increasing marginal returns to labor
B) Increasing marginal returns to production
C) Diminishing marginal returns to production
D) Diminishing marginal returns to consumption
Q2) Policymakers would like to create institutions that provide good governance,that is:
A) They want to divert as many resources as possible toward their policy
B) They want to ensure success of their policy
C) They would like to eliminate agents who rarely offer anything beneficial
D) They would like to guide agents into productive exercise of their discretion
Q3) Interest groups derive their ________ from their economic power and from the ________of their organization?
A) Political power; efficiency
B) Political power; effectiveness
C) Political institutions; efficiency
D) Political institutions; effectiveness
Q4) How can agents be held accountable for their choices and under what conditions will various schemes work to ensure feasible accountability?
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Chapter 14: Policy Analysis
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Sample Questions
Q1) Some policies only achieve their objectives indirectly through spillover effects for example:
A) A program provides loans to small business in the hopes that increased labor demand will increase wages for unskilled labor
B) Agricultural research and extension programs who aim to increase the well-being of adopting famers
C) A resulting increase in food prices from a policy mean some poor become worse off as a result of the policy
D) When a cash transfer program increases some incomes of the non-poor.
Q2) What are the seven questions policy maker use to guide a poly analyst through comprehensive study of a policy's benefits and costs?
Q3) A policy's direct effect includes___________.
A) The effects of a policy on third parties
B) Changes in market prices resulting from a policy
C) Changes in behavior in people directly affected by policy
D) Includes all of the effects from a policy including the spillovers
Q4) What are the fundamental objectives in policy analysis?
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Chapter 15: Targeted Transfer Programs
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Sample Questions
Q1) The increase in a household's well-being resulting from participation in a targeted transfer program becomes larger (all else equal)when?
A) The program raises the household's non-labor income by more; or when it requires to households to undertake fewer costly behaviors
B) The program raises the household's labor income by more; or when it requires the household to undertake more costly behaviors
C) The program raises the household's asset value; or simply increases their labor hours
D) The program lowers the threshold to qualify for the program; or includes more poor families into the program
Q2) Social norms and institutions guide some families or communities to provide mutual assistance.So a household that can receive a transfer may be unable to receive the private help they would normally receive.This public transfer is said to:
A) Replace public transfers
B) Substitute public safety net transfers
C) Substitute private safety net transfers
D) Crowd out private transfers
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Chapter 16: Workfare
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Sample Questions
Q1) In order for a workfare program to be self targeting,it must offer a wage ______ than what's available to poor households currently and ________ that what is available to a wealthier household?
A) Higher; lower
B) Higher; higher
C) Lower; lower
D) Lower; higher
Q2) All of the following are reasons why a household would choose to participate in a workfare program except:
A) If they already have a job as a high skilled worker at a less than competitive wage
B) If they are aware of the program
C) If they believe the benefits outweigh the costs
D) If they are deemed eligible
Q3) According to figure 16.1 which person will choose to participate in a workfare programs?
A) Jane
B) Mary
C) Neither
D) Both
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Page 18
Chapter 17: Agricultural Market Interactions and Reforms
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Sample Questions
Q1) How do quantitative export restrictions and an equivalent export tax rate differ?
A) There is no difference
B) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic consumers
C) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic exporters
D) Under an export tax money is generated for exporters and with quantitative restrictions money is generated for the government.
Q2) How can increasing the export tax rate may even cause tax revenue to fall?
Q3) In the 1930s,1940s and 1950s many developing countries intervened in agricultural markets in order to _________.
A) Keep food prices down for the poor
B) Keep food prices high to benefit farmers
C) Keep food prices down for urban workers
D) Encourage growth in export businesses
Q4) How can an increase in the price of a good introduce intra-household effects?
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Chapter 18: Infrastructure Policies and Programs
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Sample Questions
Q1) Project selection decisions include decisions to:
A) Define the more detailed technical specifications
B) Determine the general type quality and location of the infrastructure assets to be constructed
C) Oversee procurement of labor and materials required for operation
D) Determine the fees charged for use of services
Q2) What is volume targeting?
A) By far the least common approach for getting subsidies to the poor
B) May take the form of decreasing block tariffs
C) Average fees rise with the volume of services a household uses
D) An example would be when households pay a premium for the first quantities used then a lower price as more is consumed
Q3) How do policy makers evaluate the investment in a new community level asset?
A) When there is significant demand
B) When the average income in the community is below the poverty line
C) When the social benefits outweigh the social costs
D) When the costs outweigh the benefits for a private firm
Q4) Describe how switching from using substitute services to new infrastructure may improve well-being? (Include at least three new infrastructure services)
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Chapter 19: Education
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Sample Questions
Q1) What are the potential benefits and costs of eliminating school fees?
Q2) Hundreds of studies have been conducted that shows that earning go up by _____ for every _______?
A) 10-20%; additional $1000 spent on education
B) 25-50%; 1 year of additional schooling completed
C) 10-20%; 1 year of additional schooling completed
D) 25-50%; additional $1000 spent on education
Q3) What is the problem with using retrospective studies to look at the determinants of learning?
A) The omitted variable problem means that the causal effect of some variables are understated
B) The omitted variable problem means that the causal effect of some variables are overstated
C) The over-inclusion variable problem means that the causal effect of some variables are understated
D) The over-inclusion variable problem means that the causal effect of some variables are overstated
Q4) Why should government bureaucrats want to transfer authority over school management to school management committees?
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Chapter 20: Agricultural Research and Extension
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Sample Questions
Q1) The internal rate of return (IRR)indicates the interest rate at which the discounted stream of benefits would just equal the discounted costs; thus _______ internal rates of return indicate ______ investments.?
A) Lower; no change to B) Lower; better
C) Higher; worse
D) Higher; better
Q2) Which of the following effects from adopting a new agricultural technology is considered a negative spillover effect?
A) When technical change leads decreases crop yield
B) When technical change lowers the cost of labor for a farm
C) When technical change leads to an increase in food supply lowering the price of food paid by consumers
D) When technical change leads to an decrease in farm profit for non-adopting farms as food prices decrease
Q3) How does the tacit nature of technological knowledge complicate the job of an extension agent?
Q4) What are some rationales for government intervention in agricultural research?
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Chapter 21: Microfinance
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Sample Questions
Q1) Several MFIs take advantage of an innovative lending technology known as group liability lending.What is the advantage of group liability lending
A) Its shifts the burden of screening and supervising from group members to loan officers
B) It reduces the risk involved in borrowing from an MFI
C) It lowers lending costs by shifting some the burden of screening and supervising from loan officers to group members
D) It provides borrowers with dynamic incentives for repayment
Q2) Microfinance programs were first created by Nobel prize winning economist Muhamed Yunus in what decade?
A) 1950's
B) 1960's
C) 1970's
D) 1990's
Q3) The penalty for failing to repay a microfinance loan can be?
A) Jail time
B) Seizure of personal property
C) Denial of access to future microfinance loans
D) There is no penalty for failing to repay a microfinance loan
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Page 23
Chapter 22: Public Health, Health Care and Health
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Sample Questions
Q1) All of the following are reason why markets are unlikely to yield high quality and efficient health care in the absence of intervention except:
A) There is an asymmetric information problem where households know more about their situation than healthcare providers
B) Some providers may seek to raise profits by subscribing unnecessary tests
C) Financial markets may limit health care providers ability to manage stocks of medicines and supplies
D) Households' lack of knowledge regarding when to seek care may diminish efficiency
Q2) Why would private retailers under-invest in the dissemination of information about the potential health benefits?
A) They would have to pay the full private cost of producing
B) It would raise the demand for their competitors goods as well
C) They would receive the full benefit from the sale
D) All of the above
Q3) Within developing countries,why is ill health is a greater burden for the poor than the non-poor?
Q4) How is the DALYs lost to a disease in a given year calculated?
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