International Development Exam Preparation Guide
Course Introduction
International Development is a multidisciplinary course that explores the economic, social, political, and environmental dimensions of development in countries around the globe. Students examine the historical and contemporary factors that influence development, such as globalization, inequality, international aid, policy frameworks, and grassroots initiatives. The course covers key theories, strategies, and institutions involved in development, while addressing issues like poverty, education, health, sustainability, and human rights. Through case studies and critical analysis, students gain a deeper understanding of the challenges and opportunities in promoting equitable and sustainable development worldwide.
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 for
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Sample Questions
Q1) The Public Sector refers to all of the following except:
A) governments
B) NGOs
C) any development actor
D) private market transactions
Answer: D
Q2) What is the ultimate aim in development?
A) To generate higher income per capita
B) To achieve faster economic growth
C) To make people's lives better
D) To make sure that everyone in the world is not hungry
Answer: C
Q3) What is the official poverty threshold in the United States?
A) $1 per person per day
B) $2 per person per day
C) $13 per person per day
D) $100 per person per day
Answer: C
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Chapter 2: Well-Being
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Q1) Developing country households make many kinds of investment.All of the following are considered as investment except:
A) purchase physical assets such as farm land,wells for clean drinking water,or tools for repairing rickshaws.
B) purchase stocks or government bonds
C) purchase working capital such as fertilizer
D) spend money or time to acquire human assets such as acquiring education or training
Answer: B
Q2) The textbook's definition of well-being is a summary assessment of all of the following except:
A) how good or bad her life circumstances are,quantities and quality of goods and services she consumes
B) how happy she is
C) the activities to which she allocates her time
D) hopes and fears regarding the future
Answer: B
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Chapter 3: Economic Growth
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Sample Questions
Q1) Economic growth is defined as:
A) the rate of increase in an economy's nominal GDP.
B) the rate of increase in an economy's real GDP.
C) the rate of increase in an economy's average income.
D) the rate of increase in an economy's price level.
Answer: C
Q2) Diminishing marginal product of labor refers to as the quantity of labor increases,
A) average product of labor reaches a maximum.
B) marginal product of labor decreases.
C) total product of labor reaches a maximum.
D) average product of labor decreases.
Answer: B
Q3) ________ provides a method to examine the differences determinants in GDP per capita growth over time within individual countries.
A) Growth accounting
B) Development accounting
C) Total factor productivity
D) Growth theory
Answer: A
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Chapter 4: Economic Growth Theory in Historical Perspective
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Q1) What is the significance of possible increasing returns to scale for our understanding of economic growth?
Q2) In the Neoclassical growth model,if the saving rate s increases,what will happen to the long-run steady state equilibrium level of capital per worker?
A) it increases.
B) it decreases.
C) it stays constant.
D) we cannot determine it without more information.
Q3) In the Neoclassical growth model,the steady state equilibrium level of capital per worker is:
A) growing at a constant rate.
B) decreasing C) constant.
D) we cannot determine it without more information.
Q4) Endogenous variables are:
A) given from outside the model.
B) determined by solving the system of equations.
C) assumptions of the model.
D) fixed.
Chapter 5: Poverty,Inequality and Vulnerability
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Q1) According to World Bank (2012),in Ethiopia,the poorest 20 percent of population received 9.3 percent of income or consumption and the richest 20 percent of population received 39.4 percent of income or consumption; in South Africa,the poorest 20 percent of population received 2.7 percent of income or consumption and the richest 20 percent of population received 68.2 percent of income or consumption.What conclusion can we reach based on the above statistics?
A) absolute poverty in South Africa is more widespread.
B) the income distribution is more unequal in South Africa.
C) relative poverty in South Africa is more widespread.
D) South Africa is growing faster than Ethiopia.
Q2) What is involved in constructing a measure of poverty?
Q3) Growth policies are more likely to reduce vulnerability in the following situations except
A) raising the incomes of the poor
B) creating immunization programs
C) people moving in response to new opportunities.
D) facilitate the development of market relationships
Q4) What is involved in constructing a measure of inequality?
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Page 7
Chapter 6: Consumption, Time Allocation and Production
Choices
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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) If the prices of food and non-food stay constant and consumers income doubles,what will happen to the budget line?
A) The budget line will stay unchanged.
B) The budget line will shift in toward the origin in a parallel fashion.
C) The budget line will shift out from the origin in a parallel fashion.
D) The budget line will change but we need more information to know how.
Q3) Joshua has income endowment of $1,000,the price of food is $2 per unit and the price of non-food is $4 per unit.If he spent all of his income on food,how many units of food can he buy?
A) 1,000 units.
B) 250 units.
C) 500 units.
D) 0 unit.
Page 8
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Chapter 7: Houesholds
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Q1) _______________ theories thus assume that household decisions are reached through a bargaining process,in which each spouse seeks to get his or her way in allocating household resources and threatens to break up the household (causing the benefits of cooperation to disappear)if household allocations are not satisfactory?
A) Collective bargaining
B) Unitary
C) Voting
D) Cooperative bargaining
Q2) 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
Q3) How can rising incomes reduce gender gaps in consumption?
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Chapter 8: Domestic Markets for Goods and Services
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Q1) 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 and sellers will chose not trade at all with big city?
A) Panel a
B) Panel b
C) Panel c
D) That situation is not described by any of the panels
Q2) Private producers will only choose to sell their output when the benefit outweighs the cost.Which of the following could prevent a market from developing?
A) High transportation costs
B) High transfer costs
C) Poor legal system
D) All of the above could prevent a market from developing.
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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Chapter 9: Labor Markets
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Q1) When labor supply is _______,asset growth that increases the demand for low-skill labor _________ and well-being __________ for the low-skill workers already in the market.
A) Elastic; reduces wages; significantly
B) Elastic; raises wages; insignificantly
C) Inelastic; decreases wages; insignificantly
D) Inelastic; raises wages,significantly
Q2) All of the following are reasons why a labor market may remain segmented rather than eventually settling into a competitive labor market except:
A) A minimum wage above the competitive equilibrium wage
B) A minimum wage below the competitive equilibrium wage
C) Labor unions
D) It may be profitable for firm to maintain higher pay rather than facing a high search cost and high training costs
Q3) What is the effect of a technological improvement that only affects some firms in the market?
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) How do well-functioning markets for loanable funds encourage economic growth and allow a larger set of investors to participate in growth?
Q2) Behavioral economist point to empirical evidence what shows people exhibit ___________ which sometimes leads them not to follow through on saving and investment plans.
A) Timing preferences
B) Present bias
C) Time consistent preferences
D) Time inconsistent preferences
Q3) What is the net return of an investment?
A) The total benefit from the investment asset
B) The total improvements in the investor's life circumstances from the investment
C) The difference between gross return and the operating and maintenance costs
D) The difference between the gross return and the interest rate
Q4) A key factor in promoting economic growth is:
A) Eliminating foreign trade
B) Well-functioning financial markets
C) High interest rates
D) Stock market volatility
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Chapter 11: International Markets and General Equilibrium
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Sample Questions
Q1) Taxes imposed on imports are called ________.
A) excise tax
B) luxury tax
C) trade tax
D) tariff
Q2) A country's terms of trade is defined as the ratio of ________ to ________.
A) its currency; foreign country's currency
B) its tariff rate; foreign country's tariff rate
C) price of its importing product; price of its exporting product
D) price of its exporting product; price of its importing product
Q3) Which of the following would be an exchange rate?
A) one dollar can be exchanged for four quarters.
B) one dollar can be exchanged for one candy bar.
C) one dollar can be exchanged for 100 yens.
D) one textbook can be exchanged for 10 large pizzas.
Q4) ________ exchange rates tend to discourage ________.
A) over-valued; imports
B) under-valued; imports
C) over-valued; exports
D) under-valued; exports
Page 13
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Chapter 12: Institutions and Cooperation
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Sample Questions
Q1) People exhibit ________ when they choose actions that are more beneficial to other people (and more costly to themselves)after they witness the others acting in a manner they perceive as fair or generous.They exhibit ________ when they choose actions that are more costly to other people (even if extracting these penalties is costly to themselves)after they witness the others acting in a manner they perceive as unfair or selfish.
A) positive consumption; negative consumption
B) positive externalities; negative externalities
C) positive reciprocity; negative reciprocity
D) good choices; bad choices
Q2) 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.
Q3) Why do community-level institutions in developing countries merit close study? Provide three reasons.
Q4) 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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Q1) The decision-maker maximizes the activity's net contribution to his ________ by choosing the quantity Q* at which the MPB just _____ the MPC.
A) Net worth; equals
B) Well-being; equals
C) Total surplus; exceeds
D) Consumer surplus; exceeds
Q2) How might private institutions succeed in providing public goods where markets fail? Is this likely to succeed?
Q3) How can foreign aid do more harm than good,from a development standpoint?
A) When it adds to corruption
B) When the majority of the aid does not reach its target population
C) By financing investment in the wrong types areas.
D) By weakening society's capacity to hold policy makers accountable
Q4) Under which of the following market structures do producers take the price as given?
A) Monopoly
B) Oligopoly
C) Perfect competition
D) Monopolistic competition
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Chapter 14: Policy Analysis
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Sample Questions
Q1) When policies seek to achieve their objectives by channeling benefits to their target groups,it can be susceptible to two types of targeting failures,____________ and
A) Over-coverage of the target group,; under-coverage to unintended groups
B) Leakages to the target group; under-coverage of the non-target group
C) Leakages to non-target groups; non-coverage of the target group
D) Externalities; feedback effects
Q2) What are the fundamental objectives in policy analysis?
Q3) Sometimes feedback effects can alter the intended outcomes of a policy,for example: In response to a policy that _______ the price of rice a farmer may see profits _______ however as more famers demand more labor profit will decrease as wages for unskilled labor __________.
A) Increases; increase; increases
B) Increases; decrease; decrease
C) Decreases; increase; increase
D) Decreases; decrease; decrease
Q4) What are the seven questions policy maker use to guide a poly analyst through comprehensive study of a policy's benefits and costs?
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Page 16
Chapter 15: Targeted Transfer Programs
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Q1) When a transfer program benefits lead to more influence in the family,__________effects are introduced.Indeed empirical studies have confirmed the presence of _______________effect where the benefits targeted to specific household member stick to those members.
A) Inter-household; target
B) Intra-household; flypaper
C) Inter-household; flypaper
D) Intra-household; target
Q2) In order for a program to achieve significant poverty reduction,policy makers hope to avoid two types of targeting failure:
A) Non coverage of the poor,also called an inclusion error and leakage to the non-poor also called an exclusion error
B) Non coverage of the poor,also called an exclusion error and leakage to the non-poor also called an inclusion error
C) Over-coverage of the poor,also called an inclusion error and under-coverage of the poor also called an exclusion error
D) Over-coverage of the poor,also called an exclusion error and under-coverage of the poor also called an inclusion error
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Chapter 16: Workfare
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Q1) If a workfare program faces a fixed budget limit,B,then total program costs are largely fixed in advance and policy analysts may wish to ask: How many workers are likely to obtain employment through the program? If program administrators have set the program wage w and the target ratio n of non-wage to wage costs,then the budget will finance the creation of roughly _______worker-days of employment.
A) B x [w(1+n)]
B) B/[w(n)]
C) B/[w(1+n)]
D) [w(1+n)] /B
Q2) All of the following are the primary objectives of most workfare programs except:
A) Immediate reduction of poverty for participants
B) Reduction in the vulnerability for households that might fall into the need in the future
C) Increased economic growth
D) To give poor people skills to find their own job
Q3) Under what conditions can workforce programs reduce vulnerability for workers?
Q4) Discuss the cost and benefits or raising a program wage.
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Chapter 17: Agricultural Market Interactions and Reforms
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Sample Questions
Q1) Which of the following results of a price increase is most likely to lead to an increase in economic growth?
A) One time changes in the level of income
B) Profound changes to the distribution of income
C) A significant increase in efficiency improvements
D) One time increase in wages
Q2) The model of profit-maximizing production decisions suggests that if fertilizer is an important input to rice production,then an increase in the fertilizer price _________ the quantity of rice that farmers _______ to the market at any price,shifting the local rice supply schedule to the ________.
A) Reduces; supply; left
B) Increases; supply; right
C) Increases; demand; left
D) Reduces; demand; left
Q3) Discuss the potential benefits and costs of replacing a marketing board with a fully competitive and efficient private marketing sector.
Q4) How can increasing the export tax rate may even cause tax revenue to fall?
Q5) 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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Q1) _________,are those goods are services people use in the absence of new infrastructure.
A) Displaced services or goods
B) Inferior services or goods
C) Substitute services or goods
D) Obsolete services or goods
Q2) All of the following are reasons why the poor are less likely to use new infrastructure than the non-poor except:
A) Because some poor families will place a higher weight on food staples over using new infrastructure
B) When connection and user fees are insignificant
C) Because they tend to have smaller farms and fewer complimentary assets
D) Poor families tend to live in more remote locations and are likely to lack physical access to some new infrastructure services
Q3) What is administrative targeting?
A) Involves the use of means tests or categorical restrictions
B) Involves offering different levels of quality
C) Involves different prices for different quantities
D) By far the most common approach for getting subsidies to the poor
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Chapter 19: Education
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Q1) The Opportunity cost of sending a child to school_________?
A) Includes the tuition and fees the school charges
B) May be low because some of the time a child spends in school comes out of time the child could have been earning wages
C) Can be high because of the cost of transportation to and from school
D) May be high because it may require their mother or older siblings to reallocate time from income generating activities to child care
Q2) What is the primary purpose of creating an education voucher program?
A) An increased in enrollment especially from children of wealthier households
B) To encourage competition among schools for government resources
C) To encourage competition among schools for students
D) An increase in enrollment especially from children of poorer households
Q3) All of the following are examples of market failure in providing education and require government intervention except:
A) Education generates positive externalities
B) If schooling choices are liquidity constrained
C) If households have perfect information about the costs and benefits of schooling
D) If education is considered vital for achieving poverty reduction
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Chapter 20: Agricultural Research and Extension
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Q1) Let p,q,and w represent the crop price,fertilizer price and harvest-season wage.Which of the following is an expression for the expected change in profits from adopting a new technology?
A) = p Y + q F - w L
B) = p Y - q F + w L
C) = p Y + q F + w L
D) = p Y - q F - w L
Q2) Which of the following is not considered an up-front cost of adopting a new technology?
A) The cost of purchasing or constructing capital structures
B) The cost of learning
C) Fees for extension services
D) Labor costs for utilizing the new technology
Q3) Agricultural extension agents include any actors who:
A) Informs or teach farmers about the use of new technologies
B) Farmers who use new technology
C) Extend the life of current technology
D) Agricultural researchers who develop new strains of crops
Q4) How does the tacit nature of technological knowledge complicate the job of an extension agent?
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Chapter 21: Microfinance
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Sample Questions
Q1) A microenterprise is ______.
A) A small family run business
B) Has relatively easy access to capital to finance investments
C) A car rental company offering smaller sized vehicles
D) A small business with at least three employees
Q2) As interest rates increase the cost of borrowing_____,profit for microenterpirses_____ and participation in microfinance programs__________?
A) increases; increases; increases
B) increases; decreases; decreases
C) decreases; decreases; increases
D) increases; stays the same; decreases
Q3) Why is it difficult to empirically measure the impact of a microfinance program?
A) Microfinance programs are too young to measure the impacts
B) There are too few examples of microfinance in practice to create any significance
C) The time it takes to for investments to payoff are different in each case
D) Incomes are measured in different currencies
Q4) What are some ways that MFI's can increase sustainability without sacrificing outreach or impact?
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Chapter 22: Public Health, Health Care and Health Insurance
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Q1) If an individual faces a 3% chance of requiring a surgery that costs $10,000 then a risk-averse person would be willing to pay ____________ per year for health insurance that would cover the cost of the surgery if the shock hits.
A) More than $300.
B) $30
C) $300
D) $3,000
Q2) The burden of a disease is best measured by:
A) Death rate
B) Disability Adjusted Life Years lost
C) Infant mortality
D) Life expectancy
Q3) Within developing countries,why is ill health is a greater burden for the poor than the non-poor?
Q4) What proximate objectives to health policy makers pursue to help pursue the ultimate goals of reducing the physical mental and financial burden of health shock and to reduce households' vulnerability to the burdens that future health shocks might bring?
Q5) How is the DALYs lost to a disease in a given year calculated?
Page 24
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