Globalization and Development
Textbook Exam Questions
Course Introduction
This course explores the complex relationship between globalization and development, examining how political, economic, social, and cultural forces shape and are shaped by the global integration of markets, ideas, and peoples. Through a multidisciplinary lens, students analyze the impact of globalization on economic growth, poverty reduction, inequality, governance, and environmental sustainability in both developed and developing countries. The course addresses key debates and controversies, including the roles of international organizations, trade, foreign investment, technology transfer, and social movements, while considering the diverse experiences and responses of nations and communities to global change.
Recommended Textbook
Economic Development 10th Edition by Michael
P. Todaro
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500 Flashcards
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Chapter 1: Economics, Institutions, and Development: a Global Perspective
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Sample Questions
Q1) In reviewing discussions of life in developing countries, what is it about lifestyles in the low-income countries compared with lifestyles in the high-income countries that most strikes you? Why?
Answer: This is an open-ended question to stimulate reflection.
Q2) Countries tend to be classified as more or less developed based on
A)the literacy rate.
B)the poverty rate.
C)the level of income per capita.
D) the types of goods they produce.
Answer: C
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
Q4) 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: See Question 3 above.
Page 3
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Chapter 2: Comparative Economic Development
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Sample Questions
Q1) Developing countries are starting to converge with developed countries in the long run in what respect?
A)Growth rate
B)Income inequality
C)Population
D) Per capita income
Answer: D
Q2) What are the three main indicators that make up the Human Development Index?
Answer: Life expectancy, educational attainment, GDP per capita measured in PPP terms.
Q3) What are remittances and what role do they in developing countries? How could this potentially benefit an economy?
Answer: An answer should pose a definition, mention how remittances reduce poverty for many migrants and their families, and speak to the possible net increase in labor force skills driven by the desire to emmigrate.
Q4) What are the three major components of economic growth?
Answer: Capital accumulation, labor force growth, and technological progress.
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Chapter 3: Classic Theories of Economic Growth and Development
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Q1) 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: C
Q2) 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: D
Q3) Describe one important criticism of Rostow's stages of economic growth theory.
Answer: The stages are only necessary and not sufficient conditions, savings is too aggregate a measure, the theory does not take into account the constraints of the international economic order, and there are counter examples such as Argentina.
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Chapter 4: Contemporary Models of Development and Underdevelopment
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Q1) In contrast to the earlier neoclassical models of economic growth, in endogenous growth models, there is more emphasis on A)human capital.
B)externalities.
C)increasing returns to scale.
D) All of the above.
Q2) Explain what is meant by the term coordination failure and provide an example.
Q3) How can the O-ring theory help explain the existence of a low-level equilibrium that an economy may find itself in?
Q4) Explain how the government can help the economy avoid a coordination failure.
Q5) According to the HRV growth diagnostic framework why is there no "one size fits all" development policy?
Q6) Is it possible for a super-entrepreneur to solve all of the coordination failure problems within?a developing economy? Discuss.
Q7) 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.
Page 6
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Chapter 5: Poverty, Inequality, and Development
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Sample Questions
Q1) The number of people in the world who are absolutely poor is closest to A)a quarter-billion.
B)a half-billion.
C)one billion.
D) two billion.
E) four billion.
Q2) Poverty is better studied with size distribution measures than with those based on factor distribution because
A)labor income may be highly concentrated in well-paid modern sector workers.
B)some poor farmers may receive a sizable share of income in rent.
C)income from nonmarket activities, such as foraging, may be important.
D) All of the above.
Q3) Higher-income countries tend to have lower levels of absolute poverty because they
A)have more employment opportunities.
B)have more public assistance.
C)have greater entrepreneurship opportunities.
D) All of the above.
Q4) Using a Lorenz curve diagram, explain how to calculate the Gini coefficient.
Q5) "The 1980s were a lost decade for the absolutely poor." Evaluate this statement.
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Chapter 6: Population Growth and Economic Development:
Causes, Consequences, and Controversies
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Q1) Provide a concise statement about the relationship between population growth and absolute poverty, female wages, rural-urban migration, availability of pensions, availability of healthcare, availability of education, and rate of investment.
Q2) Explain the reasons for the hidden momentum of population growth and state its implication for population levels.
Q3) The number of live births per 1000 people in the population per year is the A)hidden momentum of population growth.
B)population growth rate.
C)demographic transition.
D) crude birth rate.
Q4) The world rate of population growth is closest to A)1%.
B)2%.
C)3%.
D) 4%.
Q5) Explain carefully the opportunity costs of a mother's time, what may lead these to change over time, and what effects these changes have on family decisions.
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Chapter 7: Urbanization and Ruralurban Migration: Theory and Policy
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Q1) Explain what is meant by urban bias. What are the major effects of urban bias?
Q2) Rural-urban migrants differ from the rest of the rural population in that they are more likely to be
A)well educated.
B)poor.
C)female.
D) All of the above.
Q3) Discuss the importance of rural-urban migration as a source of urban population growth in various parts of the developing world, being as specific as you can.
Q4) Point out the main differences in job conditions and worker characteristics between the urban formal and informal sectors.
Q5) What are the characteristics of those who migrate to urban areas? What positive and negative effects does their leaving have on those who remain?
Q6) 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.
Page 9
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Chapter 8: Human Capital: Education and Health in Economic Development
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Q1) 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 getting jobs in the private sector.
D) all of the above.
Q2) Human capital is best defined as
A)the amount of wealth people have.
B)the amount of money people have to spend on schooling.
C)human capacities that raise productivity.
D) the average education level of the population.
Q3) What factors cause private and social rates of return for primary and secondary education to diverge in developing countries?
Q4) An individual's demand for education is most affected by A)direct and indirect costs of schooling.
B)development priorities of the country.
C)the desire to escape agricultural work.
D) all of the above.
Q6) Is child labor a problem in developing countries? Explain. Page 10
Q5) Why is eradicating child labor seen as an economic investment?
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Chapter 9: Agricultural Transformation and Rural Development
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Q1) 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.
Q2) Explain the role of risk and uncertainty in an analysis of the economic behavior of peasant farmers. What kinds of questions does this analysis enable us to answer?
Q3) The primary goal of an agricultural extension service is to A)bring new areas under cultivation.
B)increase the yield per hectare.
C)introduce land reform.
D) assist rural-urban migration.
Q4) What are the primary determinants of agricultural labor productivity?
Q5) Absentee landowners characterize the agrarian system of A)Asia.
B)Latin America.
C)Sub-Saharan Africa.
D) All of the above.
Q6) Explain the concept, goals, and methods of integrated rural development.
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Chapter 10: The Environment and Development
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Sample Questions
Q1) An example of a biomass fuel is
A)coal.
B)nuclear fuel.
C)manure.
D) oil.
Q2) Which of the following conditions is violated if there is a free rider problem?
A)Universality
B)Exclusivity
C)Transferability
D) Enforceability
Q3) Describe the basic issues involved in setting up a system of national accounts that includes the value of environmental capital and its loss.
Q4) What are the main environmental challenges facing the Philippines? What are the key ingredients of PA 21, the government plan to deal with these?
Q5) Why might it be in the direct economic interest of the United States to finance rain forest conservation programs in the Amazon?
Q6) Describe the costs of water pollution.
Q7) Provide a short definition of sustainable development.
Page 13
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Chapter 11: Development Policymaking and the Roles of
Market, State, and Civil Society
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Q1) Explain what is meant by market failure.
Q2) In what ways may social evaluations of costs and benefits differ from those implied by market prices? Explain carefully.
Q3) 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.
Q4) 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.
Q5) What are accounting, or "shadow" prices for project appraisal? In what way do they differ from market prices, and why do we need them? Additional question or part of question: How can reference to world prices help countries gauge the real opportunity costs of development projects?
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Chapter 12: International Trade Theory and Development Strategy
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Sample Questions
Q1) If the equilibrium exchange rate is 15 pesos per dollar and the central bank fixes the exchange rate at 17 pesos per dollar, then we can conclude that the peso is
A)appreciated.
B)depreciated.
C)overvalued.
D) undervalued.
Q2) State three country characteristics that encourage and three that discourage economic integration among developing countries.
Q3) 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
Q4) Explain briefly the vent-for-surplus theory of international trade. What is the relevance of this theory to the current development experience of low income economies?
Q5) What is the difference between a devaluation and a depreciation?
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Chapter 13: Balance of Payments, Developing-Country
Debt, and the Macroeconomic Stabilization Controversy
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Q1) The concept of odious debt implies
A)an excessive debt.
B)a debt that is not the responsibility of the nation's people.
C)a large debt burden.
D) the total external debt of a nation's people.
Q2) What is meant by the term odious debt?
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) Explain how international trade and trade policy helped South Korea transform itself from an underdeveloped country to a high income country in the space of a single generation. You might begin by discussing South Korea's trade strategy. Why do you think international trade is of such vital importance to South Korea?
Q5) What kinds of domestic policies, short of significant debt reduction, can be followed to alleviate a debt crisis? How effective have these policies been?
Q6) Why may the debt crisis be only "sleeping," rather than "dead?"
Q7) Discuss the options for financing a balance of payments deficit.
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Chapter 14: Foreign Finance, Investment, and Aid: Controversies and Opportunities
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Q1) 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.
Q2) 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.
Q3) Voluntary organizations that work with and on behalf of mostly local grassroots organizations in developing countries are termed
A)international organizations.
B)nongovernmental organizations.
C)multilateral institutions.
D) equity organizations.
E) None of the above
Q4) Explain what is meant by investment by MNCs that encourage inappropriate consumption.
Page 17
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Chapter 15: Finance and Fiscal Policy for Development
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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) What are some of the major characteristics of financial repression? To what degree may financial liberalization be expected to address the issue of inadequate saving?
Q3) 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
Q4) 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.
Q5) Describe the costs and benefits of privatization of state-owned enterprises. In which cases would privatization seem most advisable?
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Chapter 16: Some Critical Issues for the Twenty-First Century
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Q1) "The 1980s was a lost decade for the absolutely poor." Evaluate this famous statement.
Q2) Which of the following is/are among the agreements of Agenda 21 of the Rio Summit?
A)Development assistance for poverty alleviation
B)Research and extension for environmentally sound agriculture
C)Expanded family planning resources
D) Establishment of biodiversity funds
E) All of the above
F)None of the above
Q3) Which of the following was/were among the causes of sub-Saharan Africa's decline in the 1980s?
A)Flooding
B)Decline of Soviet influence
C)Rapid growth in Japan
D) Inefficient state-owned enterprises
E) All of the above were among the causes
F)None of the above.
Q4) What is the relationship between land reform and rain forest preservation?
19
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