Below room a collection of sample test inquiries taken indigenous previous exams inDevelopment Economics. The answers are suggested by the *. Please notethat that is feasible that questions may have the * in the wrong place.You must think through every one of these.

Also, these are just sample questions. They are put here because students frequently think it is helpful to see past exams. The fact that this are below does not represent a meeting that inquiries on your exam will be likethese or top top the same subject matter. This is especially so since the subject matter and also organization that the course has recently been adjusted. In addition, together the material covered between exams changes semester come semester, the questions below are not damaged into particular exams.

1. A supply side vicious circle of poverty says that poor nationsremain poor because a. Saving stays low b. Investment continues to be low c. There is a lack of efficient government d. Every one of the above e.* a and b over

2. The global Comparisons Project, which provided purchasing powerparity rates rather than industry exchange rates, has discovered that the genuine standard of living in plenty of less occurred countries (LDCs) is also lower than suggested by your dollar per-capita income. a. True b.* false

3. Together incomes climb there has tendency to be a shift of job from the solutions sector come the commercial sector. a. True b.* false

4. I beg your pardon of the following is not typically an facet in the structural readjust that accompanies development? a.* boost in the re-publishing of farming in GDP (gross domestic product)b. Boost in manufacturing as a share of GDP c. Boost in urbanizationd. Every one of the over changes accompany advance

5. The essence of Engel"s legislation is the as family members incomes rise a. The save rate rises b.* the proportion of income spent ~ above food decreases c. Expenditure top top food decreases d. Proportion of revenue spent top top luxuries declines

6. Financial growth procedures the a. Development of performance b. Boost in nominal earnings c.* rise inoutput d. None of the over

7. Non-traded goods do not get in measured GDP due to the fact that a. They are intermediate items b.* they space not traded in the market c.there is no value-added in the manufacturing of such items d. Their value isnot captured by the exchange rate method of conversion come a typical unit

8. The concept of opportunity expense is based top top the rule of a. Require b. Usage c.* scarcity d. Profit

9. Which of the following is an incorrect statement about a spending plan constraint a. Points on a budget constraint stand for combinations the the products that precisely use up revenue b. Points in ~ the budget constraint represent combinations of the goods that do not use up all the income. C.* If points A and also B lie on the budget constraint, we can deduce that human being will it is in indifferent between the two d. If the price of one great decreases, every else the same, the spending plan constraint will swivel or rotate outward

10. As soon as the manufacturer of power looms expands, there are forward linkage effects due to a. Shed employment in the hand-loom sector b. Enhanced incomes of workers that manufacture looms c.* boosted output of woven cloth made by the power looms d. Increased demand for electric motors

11. Financial growth is necessary and sufficient to eradicate most of absolute poverty. a. True b.* false

12. Earnings level or GDP is criticized together an indicator of advance mainly since it bring away no account of the circulation of income. a.* true b. False

13. A details amount the goods and also services is essential for a minimumstandard of living. This is referred to as a.* straightforward needs b. Pure poverty c. An international standard of life d. The ide of development

14. With perfect earnings equality the Gini coefficient in a country would it is in a. Infinity b. 1 c. .5 d.* 0

15. Rawls said that the income circulation should be determined a. By a free vote of all teams on a society b. By whatever the poor decide is an agree minimum level c.* by what all culture agrees come behind a `veil the ignorance" d. As completely equal revenue shares for all groups

16. All however one that the complying with are approaches to represent in its entirety income inequality: a. Variance b. Gini coefficient c. Ratio of the top revenue decile come the lowest income decile d. Lorenz curve e.* GDP per capita

17. The concept of selection would come to be irrelevant if a. We were dealing with a an extremely simple, one-person economy b. Poverty were eliminated c.* scarcity was got rid of d. Capital was eliminated

18. Study the adhering to diagram: The Gini coefficient is

a.* A/(A+B) b. B/(B+A) c. A/B d. (A+B)/A

19. According to Simon Kuznets, the relationship between GNP every capita and also inequality in the distribution of income have the right to be expressed as a. A strictly decreasing partnership b. A strictly boosting relationship c. No connection d.* very first increasing and then diminish

20. The physical quality of life table of contents (PQLI) is an aggregation the widely available indicators of simple human needs. I beg your pardon of the adhering to is nota component of the PQLI: a. Life span b.* every capita earnings c. Infant mortality d. Literacy

21. If Lorenz curves cross, us say there is much less inequality in the case where a. The poorer gain a larger percentage of earnings b. The poorer acquire a smaller portion of income c. The richer are much less rich d.* us cannot say

22. If the development procedure is identified by what us have called "modern sector enlargement", the relationship in between GNP per capita andinequality in the circulation of income can be expressed together a. A strict decreasing partnership b. A strictly enhancing relationship c. No relationship d.* very first increasing and then to decrease

23. If the development procedure is defined by what we have called "modern ar enlargement", the relationship between GNP every capita andpoverty in the distribution of income have the right to be expressed together a.* a strict decreasing connection b. A strictly enhancing relationship c. No relationship d. Very first increasing and also then decreasing

24. Vice versa, the headcount measure tells united state the variety of poor and thepoverty space measure speak us about the average depth that poverty amongst thepoor, the Foster-Greer-Thorbecke measure up (also called P-alpha) tells united state aboutthe number, the average depth the poverty and a. Average income b. Inequality in the population c.* inequality among the negative d. Variance of average earnings

25. The ide of Purchasing strength Parity a. Is based upon the price of hamburgers approximately the civilization b.* is based top top the expense of the same market basket of goods in different nations c. Is basedupon the market exchange rate d. Is based upon the in the name exchange rate

26. If the distribution of revenue in country C is (1, 2, 2, 3, 5) andthe poverty heat is 2.5, the headcount measure tells united state what percent ofthe populace is in poverty a. 40 b. 3 c. 2 d.* 60

27. If the circulation of earnings in country C is (1, 2, 2, 3, 5) andthe poverty line is 2.5, the average revenue shortfall measure up tells united state theaverage depth the poverty among the poor is a.* 5/6 b. 5/2 c. 2 d. 0

28. If the circulation of revenue in country C is (1, 2, 2, 3, 5) , and also in country D that is (1, 1, 2, 3, 5), and the poverty heat in both nations is 2.5, by the headcount measure up which nation has more poverty? a. C b. D c.* poverty is the exact same in C and D d. We cannot tell from theinformation provided

29. If the circulation of income in country C is (1, 2, 2, 3, 5) , and also in country D it is (1, 1, 2, 3, 5), and also the poverty line in both countries is 2.5, by the average earnings shortfall measure which country has an ext poverty? a. C b.* D c. Poor is the same in C and also D d. Us cannot tell from theinformation offered

30. If the circulation of income in nation C is (1, 2, 2, 3, 5) , and also in country D the is (1, 1, 2, 3, 5), and the poverty heat in both nations is 2.5, through the Lorenz curve which nation has an ext inequlity? a. C b. D c. Inequality is the same in C and D d.* us cannot tell native the details given.

31. The empirical evidence indicates the today"s developing countries space undergoing a demographic transition very similar to what the developed countries knowledgeable in the past. a. True b.* false

32. The dependency proportion is the ratio of a. Kids to adults in the population b. Unemployed to employed employees in the labor force c. Foreign aid to full GNP d.* non-working period grouppopulation to working age populace

33. Malthus argued that the bad would always remain negative because a.* population growth tends to outrun expansion of food manufacturing b. Theydo not save enough c. There are not enough resources to educate them d. Every one of the above

34. Compared to the arisen countries, the LDCs have a. Higher birth rates and also lower death rates b.* higher birth prices and higher death prices c. Reduced birth rates and lower death rates d. Lower birth rates and higher death prices

35. Children have costs and also benefits to parents, and also a. Fathers and also mothers share this equally b. The influence on family members income is always negative, so kids can be viewed as customer durables c.* there is a trade off come parents in between quantity and also quality of kids d. The revenue elasticity of demand for children is strongly negative e. Nobody of theabove

36. Both the Ricardian expansion model and also the Lewis design share the assumption that population growth will outpace food production in the long run. a. True b.* false

37. The Lewis design of the double economy renders the following assumption(s) a. The landscape wage initially remains consistent b. Market makes a profitby employing cheap job c. Rural wage will rise as soon as industry expands sufficiently d.* all of the over e. Nobody of the over

38. Industry encounters an elastic it is provided curve that labor because the marginal product of labor in agriculture is a. Reduced than the marginal product in market b. Less than the averageproduct in agriculture c.* an extremely low or zero d. Constant at all levels ofagricultural output

39. Underemployment is a situation where a. People who space willing to work-related are can not to find jobs b. Countless peoplein the labor force hold two or an ext jobs c.* people are working full-timeand hard, yet have actually a short marginal product d. People work in a complimentary labormarket with a an extremely low wage

40. The Malthusian theory of populace growth, as formulated by Malthus, showed a. Completely correct for human habits b.* overly cynical about future productivity boosts c. The food calculation will decrease with population growth d. No one of the over

41. The endogenous development model confirms the neoclassical model"s implications about convergence. a. True b.* false

42. One LDC has actually an ICOR of 5 and also a savings rate s = 15%. If present GDP is $1000, what will certainly be GDP following year? a. $1150 b. $850 c. $1200 d.* $1030

43. The theory of the "advantage that backwardness" a. Explains how LDCs might catch-up in efficiency b. Suggests that already known modern technology can be transferred relatively cheaply from the advancedcountries to the LDCs c. Is incorrect; there room no advantages to backwardnessd.* a and b over

44. "L" shame isoquants perform not indicate a. The inputs are supplied in addressed proportions b. Incremental capital-output ratio is continuous c.* enhancing returns to scale d. No substitution between inputs

45. I m sorry is a measure up of absolute poverty? a. Headcount. B. Average income shortfall. C. Sen index. D.* all of theabove.

46. The Lorenz standard a. Permits us to rank all countries by the level of inequality. B. Enables us to rank all countries by the degree of poverty. C. Is a measure of the wealth of a country. D.* is one incomplete measure of inequality.

47. Consider the following distribution of income in nation x and also country y: country x (2, 3, 4) country y (6, 9, 12) a. Inequality is higher in x than in y. B. Inequality is higher in y 보다 in x. C.* inequality is the very same in x and y. D. The information provided is notsufficient to to compare inequality in x and y.

48. Consider the following circulation of income in country x and also country y: nation x (2, 3, 4) country y (6, 9, 12) a. Absolute poverty is higher in x than in y. B. Absolute poverty is greater in y than in x. C. Absolute poverty is the exact same in x and y. D.* the information offered is not sufficient to compare pure poverty in x and y.

49. Consider an economy with low per capita income. Assume i) whenever every capita revenue rises above subsistence level, population grows and also ii) whenever that falls listed below subsistence level, populace shrinks. Given, i)and ii), a.* a poverty trap exists. B. A critical minimum effort increasing per capita income by 1.5% every annum is necessary for advancement to take place. C. The economic situation is prepared for Rostow"s take-off stage. D. No one of the above.

50. I m sorry of the complying with would no be considered as an example of industrialization a.* increase in literacy b. Replacement of human with mechanically skillsc. Improved economic organization d. Enhanced extraction and also working of raw materials

51. The production possibility frontier deserve to be thought about a measure up of a. Genuine G.N.P. B. Nominal G.N.P. C.* Potential G.N.P. D. Nobody of the over

52. Many lists of an easy human needs encompass all the adhering to items other than a.* simple transportation, such together bicycles. B. Minimal levels of nutrition c. Minimal delivery of sanctuary d. Supplication of straightforward health treatment

53. Rising per-capita GNP may fail to increase incomes for many citizens because: a. Gains from expansion may be supplied for high value glory tasks that provide few concrete benefits to the people. B. Profit from expansion may be heavily reinvested,so usage gains room postponed c. Those who room already relatively well-offmay obtain all or many of the benefits d.* all of the over

54. The idea which argues that poverty is self-perpetuating becausepoor countries are can not to save and invest enough to accumulate the capitalstock the would assist them flourish is a. The exposed theory. B.* the vicious-circle-of-poverty hypothesis.c. Neo-colonialism. D. The under-consumptionist hypothesis.

55. If the vicious-cycle-of-poverty theory were true at every levels of every capita income, climate a. All economies would construct at the same rate. B.* no nation could ever achieve economic development. C. No country would ever before fail to reach the highest possible level of economic development. D. Poverty would not be self-perpetuating.

56. The absolute poverty line: a. Should be readjusted from time to time together real earnings grows b. Reflects the average earnings of the shortest 10 percent the the populace c. Varies v theGini coefficient d.* nobody of the above.

57. The Gini coefficient offers a measure up of: a. The level of poverty b.* the level of loved one inequality c. Disguised unemployment d. The price of development

58. To draw a Lorenz curve mirroring the distribution of earnings by household, one should first rank all family members according come a. Household size. B. Period of head that household. C. Fairy level. D.* earnings per capita.

59. One study uncovered that the Gini coefficient for Egypt .403 . Was virtually the very same as that for Australia .404. Native this information one deserve to conclude the Egypt and also Australia a. Had actually virtually the same number of households in absolute poverty. B. Had virtually the same percentage of families in pure poverty. C. Had actually virtually the same Human development Index level. D.* none of the above.

60. According to the reverse U hypothesis of Kuznets, as economies construct a. Average household incomes an initial fall and later rise. B. Industry"s re-superstructure of GNP very first rises and later falls. C.* revenue inequality very first rises and also later falls. D. The populace growth rate very first rises and later falls.

61. If "s" is the save rate and "v" the capital-output ratio, then"g" the price of expansion in the Harrod Domar model is stood for by a. V/s. B. Sv. C. Sv. D.* s/v.

62. Well balanced growth theories of Ragnar Nurkse advocate a. A steady price of expansion of GNP b. Parity in between capital stock and also labor c.* simultaneous breakthrough of every sectors the the economy d. All of the above.

63. Critical minimum initiative refers come a. The minimum labor input forced to advanced the MPl b. The right ratioin i m sorry to integrate labor with resources c.* the large push promoted to raisean economic situation from continued stagnation d. Nobody of the above.

64. The Arthur Lewis design utilizes the presumption that, a.* an countless supply of job is accessible at a solved wage price b. Supply of labor is a strict increasing function of wage rate c. Labor supply grows at a fixed price d. Disguised unemployment should not exist in the farming sector.

65. If a nation experiences a rapid increase in per-capita earnings due to discovery of new oil reserves, then it is experiencing: a.* growth yet not necessarily development. B. Breakthrough but not growth. C. Both growth and also development. D. Neither growth nor development.

66. Follow to Kuznets, the identifying characteristic that "modern economic growth" is a. Expansion of heavy industry. B. A rapid decrease in populace growthrates. C.* high prices of saving and investment. D. Applications of scienceto difficulties of economic production.

67. In constant 1968 lira, real GNP in Turkey boosted from L206.1 exchange rate in 1980 to L214.7 billion in 1981. Invest in 1980 totaled L43 billion. What was the worth of the ICOR? a.* 5. B. 0.176. C. L8.6 billion. D. It cannot be identified from thesedata.

68. All however one of the following elements is a characteristic of the demography transition. I m sorry one is the exception? a. Originally high bear rate and death rate. B. At first low rate of organic increase. C.* Rapid increase in the bear rate throughout the beforehand stages of development. D. A sharp fall in the fatality rate followed with a lag through a decrease in the bear rate.

69. The supply curve of labor to market is horizontal if there is surplus labor in agriculture. The condition occurs as lengthy as: a. The marginal product of labor in farming is less than the averageproduct of labor. B. The marginal product of labor in farming is lessthan the marginal product of job in industry. C. There room diminishingreturns to labor in agriculture. D.* the marginal product of job in agricultureis zero.

70. I m sorry of the adhering to statements is continuous with Hirschman"sstheory of unbalanced growth? a. A nation should focus on industry, because farming is not a dynamic sector. B. To initiate the industrialization process a nation requires a "big push." c. When specific industries are emerged first, linkage results will induce the advance of new industries. D.* every one of the above.

71. Which of the following is a direct implication of the view that childbearing is an economic decision? a. Civilization will not have added children uneven they have the right to earn a benefit from law so. B. Social factors have no result on childbearing decisions. C. Compulsory education and learning will boost fertility by increasing each child"s prospective earnings. D.* Fertility should loss with improved methods for women to job-related in jobs outside the home.

72. The primary focus of advance strategy during the 1950"s was on a. Palliation in unemployment, b.* increase in G.N.P., c. Increase in foreign trade, d. Rise in literacy

73. The exploit of stole ore has increased on account of increased demand for steel. The over is an instance of a. Front linkages, b.* behind linkages, c. Backward and forward linkages, d. No one of the above

74. According to W.W.Rostow, i beg your pardon of the following does not belong to the "precondition for take off": a. Increased farming productivity, b. Politics stability, c. Breakthrough of social overhead capital, d.* growth of the durable customer goods industry

75. If a instance exists whereby it is not financially rewarding for any single producer to increase production since of market limitation, then the finest strategy because that the nation to adopt would be a.* balanced growth strategy, b. Unbalanced development strategy, c. Employment growth strategy, d. No one of the over

76. An unbalanced development strategy may be desirable if a. Indivisibilities space important, b. Expansion expenses are important, c.* Both of the above, d. No one of the over

77. I m sorry of the adhering to is not true around agriculture"s role in economic breakthrough a. Offers labor for non-agricultural sector, b. Provides a sector fornon-agricultural commodities, c. Resource of industrial raw materials, d.*None of the above

78. I beg your pardon of the adhering to is not a weak of the income substitution strategy of development a.* Reduces production of contemporary sector, b. Leader to one inappropriate residential K/L ratio, c. Leader to a balance of payment problem, d. Reduce exports ofagricultural goods

79. Follow to the Harrod-Domar model, rise in growth rates counts on a. Increase in capital-output ratio b.* to decrease in capital-output ratio, c. Increase in marginal propensity come consume, d. Nobody of the above

80.In the Harrod-Domar model, the is assumed that the elasticity of substitution between capital and labor is a. Infinite, b. One, c. Between zero and one, d.* Zero

81. In the concept of demography transition, the price of development of populace is most likely to increase in a. Duration I, b.* duration II (c) duration III (d) period I & II

82. Follow to Malthus, the fixed factor of manufacturing is a. Labor, b. Capital, c.* Land, d. Entrepreneurship

83. According to Malthus, instances of preventative checks room a. Abortion, b.* Deferred marriage, c. Famine, d. Both a and also b

84. In a perfect competitive economy, if the need curve for laboris infinitely elastic then all of the national revenue will accrue to a.* Workers, b. Capitalists, c. Landlords, d. None of the over

85. Follow to A. Sen, famines room most likely to occur on account that a. Loss in manufacturing of farming goods, b.* failure in circulation of agricultural goods, c. Disadvantage weather conditions, d. Autumn in money it is provided

86-90. Intend there are 5 workers in one economy and initially every the workers work in the classic sector in ~ a wage same to 1 (call this early stage period, duration 0). In each subsequent period, one worker migrates native the classic sector come the modern sector wherein wages are equal to 4. Assuming the the number of workers remains constant, then period 5 all the workers room in the modern-day sector.

86. In duration 5 the gini coefficient that inequality is a. 1, b. 0.5, c.* 0, d. None of the above

87. As migration takes place the gini coefficient the inequality a.* At first rises,then falls, b. At first falls,then rises, c. Falls continuously, d. Rises repeatedly

88. As migration takes location the earnings share of the poorest 50% a. At very first rises,then falls, b.* At very first falls,then rises, c. Drops continuously, d. Rises repetitively

89. As migration takes ar the every capita income of the employees a. At very first rises,then falls, b. At very first falls,then rises, c. Falls continuously, d.* Rises repeatedly

90. The revenue share of the poorest 20% is most likely to be in ~ a minimum in which period a. Duration 2, b. Period 3, c.* duration 4, d. Period 5

91. Expect we hypothesize that wages are collection at a subsistence level.Then what observation will combine our theory a. There is no involuntary unemployment, b.* Wages carry out not loss as laborproductivity changes, c. Wages fall in the slack agricultural seasons, d.None the the above

92. In a solved rent tenancy, risk is a.* Borne by the tenant, b. Borne by the landlord, c. Shared between landlord and tenant, d. No one of the over

93. I m sorry of the complying with is not a justification for sharecropping a. That acts as a screening device, b. It shares risks between landlord and tenant, c. It reduces price of supervision because that the landlord, d. None of the above

94. Landscape interest rates are likely to it is in a.* higher than in the arranged credit market, b. Very same as in the organized credit market, c. Reduced than in the organized credit market, d. No one ofthe over

95. In the Harris-Todaro model, in equilibrium, the intended urban wage rate will it is in _________ the landscape wage price a. Higher than, b.* equal to, c. Less than, d. None of the over

96. Intend migrants are threats averse, then in the Harris-Todaro model, in equilibrium, the intended urban incomes will it is in _________ the rural wage rate a.* better than, b. Equal to, c. Less than, d. Nobody of the over

97. I m sorry of the complying with is not an example of financial repression a. Required sales of government debt come the bank system, b. Interest price controls top top loan and deposit rates, c. An extremely high prices of monetary growth, d.* creation of a huge public ar

98. Follow to the Ricardian model, the factor for reduced priced services in the LDC"s is a. Labor -productivity in products is the very same in rich and also poor countries, b.* Labor-productivity in commodities is lower in poor countries, c. Labor-productivity in services is lower in negative countries, d. No one of the above

99. Which of the complying with statements is no true around import border a. Income restrictions tempt resources to safeguarded industry, b. Import restrictions involve a deadweight loss, c. Import restrictions raise prices because that buyers to a product, d.* import restriction transition welfare from producers to consumer

100. In a non-Harris-Todaro world, if it is observed that poverty is highly associated with joblessness then which an option of methods is likely to reduce poverty a.* Labor extensive techniques, b. Funding intensive techniques, c. Benefit maximizing techniques, d. Nobody of the above

101. If the birth price is 6% and also the death rate is 2%, the herbal rate of population increase is a. 0 .3% b. 3.0% c.* 4.0% d. 8.0%

102. Historically, low price of populace growth to be maintained since of a. Low fertility rates. B.* high mortality rates. C. Migration the end of occurring countries. D. Government restrictions on the variety of children families canhave.

103. The main domestic resource of to save in LDCs is a. Government savings through budget plan surplus b. This firm retained revenue c.* savings by families d. To save by public sector enterprises

104. During years of jae won repression in LDCs, the real interest rate was often an unfavorable due to: a. Explicit policy by the federal government b. Short interest rates instituted by government to encourage funding investment c. Federal government policy to combat inflation d.* one inadvertent result of inflation developing after nominalinterest rates had actually been fixed.

105. The LDCs want foreign capital in the kind of a. Loans once they want to retain control of domestic industry b. Equitywhen they desire to share dangers with international investors c. Irreversible loans forlong-term infrastructure projects d.* all of the over

106. If the marginal product of capital is twice that the labor and the price of funding is three times the of labor, then, a. Funding will it is in substituted for labor b.* labor will certainly be substituted for funding c. The price of resources will fall, and price of labor will climb d. Twice as much resources as labor will certainly be work

107. Investment in capital implies a. Future sacrifice for existing gain b. Purchase financial assets together asstocks or binding c. No sacrifice since it leader to expansion d.* a presentsacrifice for supposed future obtain

108. Autarky refers to a country a. Through an authoritarian federal government b.* i m sorry is me sufficient, and is a closed economic situation c. Which has complimentary trade with the remainder of the world d. No one of the over

109. A public works projects pay $5 a day to negative rural laborers who would otherwise earn just $2 every day indigenous casual labor. The opportunity cost, or shadow fairy rate, of labor is: a.* $2 b. $3 c. $5 d. $7

110. Peasant farmers in LDCs are typically observed to a. Respond appropriately to alters in price incentives b. Use availableresources effectively c.* Both a and also b d. No a no one b

111. In the family production model, agents choose their hours andtype of work so regarding maximize: a. Production b. Earnings c.

You are watching: Which of the following statements is true of a traditional economy?

See more: Angel In Blue By The J. Geils Band Angel In Blue, Angel In Blue (Remastered/2006)

Recreation d.* energy e. Short-run consumption