Type:
Test Bank
Development Economics Theory, Resource: Empirical Research, and Policy Analysis Edition:
1st Edition
Author(s):
Julie Schaffner
Test Bank, Chapter 1: What is Development Economics good for? 1. According to World Bank classification, many African and Asian countries qualify as ________, while most Latin American countries qualify as ________. a. b. c. d.
High income countries, Middle income countries Low income countries, High income countries Low income countries, Middle income countries Middle income countries, Low income countries
Answer: c Heading: Assessing global poverty and prosperity Level: Medium
2. The average income statistics is a useful measure, however, they fall short of fully describing prosperity and deprivation for the following reasons: a. Income is not distributed equally. b. Among people with the same income, some may have better access to clean water and good education. c. Among people with the same income, some may face lower risk of going hungry. d. All of the above. Answer: d Heading: Assessing global poverty and prosperity Level: Medium
3. What is the official poverty threshold in the United States? a. b. c. d.
$1 per person per day $2 per person per day $13 per person per day $100 per person per day
Answer: c Heading: Assessing global poverty and prosperity Level: Easy
4. If we were to employ a poverty threshold of $10 per day rather than $2 per day, what would happen to the number of poor people in the world? a. increase
b. decrease c. stay the same d. all possible Answer: a Heading: Assessing global poverty and prosperity Level: Easy
5. Which of the following is NOT true about rural Ethiopia? a. b. c. d.
Most people live on less than $2 a day Most people do not have access to clean water Most people have one or two children Most people have never been enrolled in school
Answer: c Heading: Assessing global poverty and prosperity Level: Medium 6. What is the objective in development? a. Sustained improvement in the well-being of rich people only b. Sustained improvement in the well-being of poor people only c. Sustained improvement in the well-being of a country’s many people, with special emphasis on improvements for the rich. d. Sustained improvement in the well-being of a country’s many people, with special emphasis on improvements for the poor. Answer: d Heading: Defining the Development Objective Level: Medium
7. What is the ultimate aim in development? a. b. c. d.
To generate higher income per capita To achieve faster economic growth To make people’s lives better To make sure that everyone in the world is not hungry
Answer: c Heading: Defining the Development Objective Level: Easy
8. Which is the following statement is true? a. b. c. d.
The objective in development is merely to generate higher income per capita. The objective in development is to make people’s lives better. Development can happen over night Income and well-being are exactly same concept
Answer: b Heading: Defining the Development Objective Level: Difficult
9. All the development actors should treat a. b. c. d.
Income and well-being as the exactly same thing Income as priority Non-income measures as priority all of the above
Answer: d Heading: Defining the Development Objective Level: Easy
10. For different development actors, what do their development objective definitions share in common? a. The objective in development is to make people’s lives better, not merely to generate great economic statistics b. The objective in development is improvements for many people, especially for the poor c. The objective in development is to have sustained improvement over many years d. All of the above Answer: c Heading: Defining the Development Objective Level: Easy
11. How many Millennium Development Goals are there? a. 6 b. 8 c. 10
d. 15 Answer: b Heading: The Millennium Development Goals Level: Easy
12. The Millennium Development Goals include a. b. c. d.
achieving universal primary education eliminating the proportion of people living on less than $1 per day. eliminating HIV/Aids, malaria and other diseases all of above
Answer: a Heading: The Millennium Development Goals Level: Medium 13. The accumulation of assets is central to understanding development, assets can be broadly grouped into the following categories EXCEPT: a. b. c. d.
Business assets Infrastructure assets Inflation assets Human assets
Answer: C Heading: 1.3 Understanding the Development process Level: Easy
14. 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 Heading: Defining the Development Objective Level: Easy
15. The quantity, quality and types of assets that an economy creates in any period of time and the way the value generated by the assets is distributed across diverse groups are determined in a country’s _____________ system? a. b. c. d.
network command socioeconomic infrastructure
Answer: c Heading: 1.3 Understanding the Development Process Level: Medium
16. High quantity, institutions can do all of the following for a developing country except: a. b. c. d.
discourage theft encourage trade and cooperation minimize fraud minimize competition
Answer: d Heading: 1.3 Understanding the Development Process Level: Medium
17. The Public Sector refers to all of the following except: a. b. c. d.
governments NGOs any development actor private market transactions
Answer: d Heading: 1.4 Analyzing Development Policy Level: Medium
18. The term policies can refer to all of the following except: a. b. c. d.
governments strategies programs projects
Answer: a Heading: 1.4 Analyzing Development Policy Level: Medium
19. Development policies can be broken down into three main categories, they are: a. b. c. d.
asset creation policies, safety net policies, and intervention policies asset creation policies, growth policies, and inflation policies growth policies, price control policies, and investment policies safety policies, financial policies, and income growth policies
Answer: a Heading: 1.4 Analyzing Development Policy Level: Medium
20. Asset creation policies include: a. b. c. d.
the government hiring a contractor to build a road social assistance programs providing food to the poor government taxation and subsidies tariffs and other polices aimed at encouraging or discouraging international trade
Answer: a Heading: 1.4 Analyzing Development Policy Level: Medium
21. Safety net policies include: a. b. c. d.
the government subsiding low income housing making credit more available to stimulate investment by firms Social Insurance and assistance tariffs and other polices aimed at encouraging or discouraging international trade
Answer: c Heading: 1.4 Analyzing Development Policy Level: Medium
22. Policies that intervene in the market include: a. the government hires a contractor to build a road
b. making credit more available to stimulate investment by firms c. Social Insurance and assistance d. tariffs and other polices aimed at encouraging or discouraging international trade Answer: d Heading: 1.4 Analyzing Development Policy Level: Medium
23. Reinikka and Svennson in their 2004 paper identify which country as an example of bureaucratic corruption where only 13% of central government transfers to school actually made it to the schools? a. b. c. d.
Nigeria Indonesia Vietnam Uganda
Answer: d Heading: 1.4 Analyzing Development Policy Level: Medium
24. Agricultural research to improve corn yield will increase corn farmer’s income, which group is most like to be hurt by this research?
a. b. c. d.
Consumers who now have to pay higher prices for corn Consumer who now have to pay higher prices for wheat Wheat farmers who now receive a lower price for the same amount of wheat Dairy farmers who feed their cattle a mix of corn and wheat
Answer: c Heading: 1.4 Analyzing Development Policy Level: Medium
25. All of the following are examples of development indicators except:
a. b. c. d.
Economic growth rates Poverty Interest rates Income
Answer: c
Heading: 1.2 Level: Medium
Test Bank, Chapter 2: Well-being 1. There are many factors that limit households' success in their pursuit of well-being. We group these “Determinants of well-being” into following categories except: a. b. c. d.
assets needs family market conditions and institutions
Answer: c Heading: Well-being – introduction Level: Easy 2. In studying the well-being, it is most common to focus on: a. b. c. d.
households individuals entrepreneurs the Macro economy
Answer: a Heading: Well-being – introduction Level: Easy 3. What is the normal interest rate charged on a howlats loan? a. b. c. d.
0% 3.5% 5% 10%
Answer: a Heading: Life among the Poor in Bangladesh Level: Medium 4. Howlats loans are loans that citizens borrow from: a. b. c. d.
the federal and local government friends, relatives and neighbors the central bank private companies
Answer: b Heading: Life among the Poor in Bangladesh Level: Medium
5. 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 Heading: a Working Definition of Well-being Level: Difficult 6. Amanda and Bill consume the exact same quantities of every consumption item, but Amanda gets to make her consumption choice decisions on how to spend her income while Bill’s consumption levels are dictated by the government. According to economist-philosophers like Amartya Sen, which of the following statement is true? a. Amanda has a higher well-being b. Bill has a higher well-being c. Amanda and Bill have the same well-being since the utility from the consumption choices is the same for both of them. d. There is no way we can compare Amanda and Bill’s well-being. Answer: a Heading: A working definition of well-being Level: Difficult 7. To identify the features of life circumstances that matter to developing country households, and then to identify the factors that constrain their pursuit of well-being, the author suggests it is useful to describe four sets of activities which are: a. Increasing wealth, improving life expectancy, decreasing infant mortality and gaining freedom b. Increasing wealth, fetching fresh water, improving environmental quality and building future through savings c. Earning Income, gaining access to stable healthcare, Increasing wealth, improving life expectancy d. Earning income, coping with fluctuations, building future through investment and acquiring goods and services Answer: d Heading: How Households in Developing Countries Pursue Well-being Level: Medium
8. By the World Bank definition, with income per capita of $350, Malawi is classified as a ______. a. b. c. d.
Low Income Country Lower Middle Income Country Upper Middle Income Country High Income Country
Answer: a Heading: How households in developing countries earn income Level: Medium 9. By the World Bank definition, with income per capita of $8,890, Mexico is example of ______. a. b. c. d.
Low Income Country Lower Middle Income Country Upper Middle Income Country High Income Country
Answer: c Heading: How households in developing countries earn income Level: Easy 10. Typically, which of the following sectors has a much larger share of the labor force in developing countries compared to developed countries? a. b. c. d.
Manufacturing, Construction and Utilities Wholesale and Retail Trade and Transport Agriculture and Mining sector Business and Personal Services
Answer: c Heading: How households in developing countries earn income Level: Medium 11. Among these four countries, one would expect that the percentage of workers who are self employed, employers and family workers is: a. b. c. d.
highest in Indonesia highest in Malawi highest in Mexico highest in the United States
Answer: b
Heading: How households in developing countries earn income Level: Medium 12. Basic foods are very important in the budgets of low income households. According to the study of Banerjee and Duflo (2007), it is common for the low income households to spend _____ of their total consumption budget on food. a. b. c. d.
<10% 10% - 50% 50% - 90% >90%
Answer: c Heading: How households in developing countries spend income and acquire goods and services Level: Easy 13. As income levels rise, per capita food expenditure tends to_________ while the percentage of total expenditure on food tends to ________. a. b. c. d.
rise; rise rise; fall fall; rise fall; fall
Answer: b Heading: How households in developing countries spend income and acquire goods and services Level: Medium 14. An empirical pattern known as Engel’s Law states that as income levels rise, per person food expenditure a. b. c. d.
falls, but its share in total consumption expenditure rises falls, and its share in total consumption expenditure falls rises, but its share in total consumption expenditure falls rises, and its share in total consumption expenditure rises
Answer: c Heading: How households in developing countries spend income and acquire goods and services Level: Medium 15. From the study of Filmer, et al. (2000), in Zimbabwe, among women who had given birth in a rural health center, what percentage reported being hit by a nurse during delivery?
a. b. c. d.
1% 5% 13% 50%
Answer: c Heading: How households in developing countries spend income and acquire goods and services Level: Medium 16. Households in developing countries face lots of fluctuations and shocks. Seasonal fluctuations in agriculture means that in off-seasons farmers tend to demand less labor and supply less food which _________ wages and __________ food prices. a. b. c. d.
raises ; increases raises; decreases reduces; decreases reduces; increases
Answer: d Heading: How households in developing countries cope with fluctuations and shocks Level: Difficult 17. In countries like Gambia, seasonal fluctuations are so profound that the last few months before the new harvest are called the: a. b. c. d.
“dead season” “hungry season” “famished season” “starving season”
Answer: b Heading: How households in developing countries cope with fluctuations and shocks Level: Easy
18. One of the issue facing households in developing countries is how they cope with fluctuations or shocks which can arise from all of the following except: a. b. c. d.
seasonal changes in weather life cycle event such as marriage and old age market Prices consumption smoothing
Answer: d Heading: How households in developing countries cope with fluctuations and shocks Level: Medium
19. 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 Heading: How households in developing countries cope with fluctuations and shocks Level: difficult 20. Which of the following cost saving activities is referred to as ex post responses to fluctuations? a. b. c. d.
Households spend less than earnings in an effort to “Save up” Keep extra money in a mud bank Take out a loan, promising to repay it with interest out of future income Purchase a formal insurance
Answer: c Heading: How households in developing countries cope with fluctuations and shocks Level: Medium 21. The following are examples of income smoothing except: a. b. c. d.
Farmers producing crops that harvest at different times during the year Farmers working for neighbor’s farm producing the same crops as at home Famers working part time in a non agriculture job Farmers using different soil qualities or farming plots of land at different latitudes
Answer: b Heading: How households in developing countries cope with fluctuations and shocks Level: Medium
22. The magnitude of household’s needs can be affected by all of the following except: a. b. c. d.
Households with members that are disabled or sick Cultural norms regarding celebrations and other obligations Income Number of dependants in the household
Answer: c Heading: How households in developing countries cope with fluctuations and shocks Level: Easy 23. 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 Heading: How households in developing countries build better futures through investment Level: Medium 24. Households' well-being levels are determined not only by the assets, but also by the nature and magnitude of their needs. Households' needs depend on all of the following except: a. b. c. d.
the number of dependents the incidence of illness, injury and disability cultural norms households' income
Answer: d Heading: Needs Level: Medium
25. Changing market conditions can alter a household’s well-being, __________prices for output and ________prices for inputs raises potential profits. a. higher; lower b. higher; higher c. lower; higher
d. lower; lower Answer: a Heading: Market conditions Level: Medium 26. What is the ultimate goal in development policy making? a. b. c. d.
Higher Incomes Higher GDP Higher Well Being More consumption choices
Answer: c Heading: Empirical Study of Well-being Level: Medium
27. Since we cannot measure well-being directly, people often turn to the most common measure of standards living which is: a. b. c. d.
nominal income real income nominal income per capita real income per capita
Answer: d Heading: Real household per capita income Level: Easy
28. Other than income, what is the next most common measure of a household’s living standard? a. b. c. d.
Land Real per capita consumption expenditure Investment opportunities Level of education of the head of the household
Answer: b Heading: Real per capita consumption expenditure Level: Easy