Exam 3: Classic Theories of Economic Growth and Development  

The neoclassical counter-revolution school supports

Apply what you have learned about development and development theories to speculate on the following thought experiment: What if anything might be different about today's international economic order if the Spanish had colonized North America and the English had colonized ?South America?

Assume a closed economy, perfectly elastic labor supply, and linear technology. Suppose the incremental capital-output ratio (ICOR) is 3, the depreciation rate is 3%, and the gross savings ?rate is 10%. Use the Harrod-Domar growth equation to determine the rate of growth. What would ?the gross savings rate have to be to achieve 5% growth? Assuming a perfectly elastic labor supply, state one criticism of this model from an exogenous growth theory viewpoint and another criticism ?of this model from an endogenous growth theory viewpoint.

Explain the concept of the "idea gap" in development economics.

What are the key assumptions of the Lewis model that give rise to its conclusions? How would the theory's conclusions differ if these assumptions do not hold?

Does it follow from the false paradigm model that World Bank economists are intentionally trying to keep developing countries from realizing genuine development? Why or why not?

Which of the following is not a policy proposal of the neoclassical counter-revolution school?

Which of the following approaches does not offer an international dependence explanation of underdevelopment?

During the past decade, India has invested about 22% of its GDP while China's investment rate has been double that of India's. India's annual growth rate has been about 6% while that of China has been about 9%. What conclusions can you draw?

The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as

Patterns of development or structural change analysis stress internal change in a developing country's economic, industrial, and institutional structure. What are some of the most important changes?