Deck 19: Developmenteconomics

Question 1

The table shown provides economic development data for a set of countries. Which country has the lowest economic growth?

A) Ghana
B) Italy
C) Brazil
D) Germany

Answer 1

Italy

Question 2

Economic growth focuses on _______, utility focuses on _______, and the capabilities approach focuses on _______.

A) human development; individual pleasure; output
B) output; human development; individual pleasure
C) output; individual pleasure; human development
D) human development; output; individual pleasure

Answer 2

output; individual pleasure; human development

Question 3

An example of a capability would be the ability to:

A) take a vacation over a long weekend.
B) live free of the fear of violence.
C) afford a luxury home.
D) purchase an item you really want.

Answer 3

live free of the fear of violence.

Question 4

The table shown provides economic development data for a country from 1990-2020. Which decade experienced the largest gain in economic development?

A) 1980 - 1989
B) 1990 - 1999
C) 2000 - 2009
D) 2010 - 2019

Question 5

The table shown provides economic development data for a set of countries. Which country has the lowest economic development?

A) Ghana
B) Italy
C) Brazil
D) Germany

Question 6

Development economics focuses on how countries can promote:

A) health and education.
B) sound monetary policy and education.
C) health and fiscal policy.
D) sound monetary and fiscal policy.

Question 7

An example of a capability would be the ability to:

A) receive appropriate healthcare as required for a healthy life.
B) acquire adequate food and shelter.
C) travel freely.
D) All of these are true.

Question 8

What level of daily income is the World Bank's measure of extreme poverty?

A) $1.00
B) $1.90
C) $2.25
D) $3.00

Question 9

Education is key for all of the following except:

A) economic development.
B) economic growth.
C) increasing the capabilities of a society.
D) interest rate policy.

Question 10

The Saudi Arabian government recently passed a law that allows women to travel without a sponsor's permission. This is an example of:

A) decreased human development.
B) increased capabilities.
C) decreased utility.
D) increased economic growth.

Question 11

Who is the Nobel Prize-winning economist from Harvard who developed the capabilities approach?

A) Amartya Sen
B) Milton Friedman
C) John Kenneth Galbraith
D) Gary Becker

Question 12

The table shown provides economic development data for a set of countries. Which country has the fastest economic growth?

A) Ghana
B) Italy
C) Brazil
D) Germany

Question 13

The table shown provides economic development data for a set of countries. Which country has the highest economic development?

A) Ghana
B) Italy
C) Brazil
D) Germany

Question 14

Limited capabilities often affect ___________ the most.

A) journalists
B) the richest
C) politicians
D) the poorest

Question 15

The table shown provides economic development data for a country from 1990-2020. Which decade experienced the least amount of economic development?

A) 1980 - 1989
B) 1990 - 1999
C) 2000 - 2009
D) 2010 - 2019

Question 16

All of the following are examples of capabilities except the ability to:

A) find secure and meaningful work.
B) afford a new sports car.
C) live free of the fear of violence.
D) acquire nutritious food.

Question 17

The table shown provides economic development data for a country from 1990-2020. Which decade experienced the highest rate of economic growth?

A) 1980 -1989
B) 1990 - 1999
C) 2000 - 2009
D) 2010 - 2019

Question 18

Which of the following does not limit people's capabilities?

A) Market failures
B) Income
C) Economic growth
D) Political repression

Question 19

What is the relationship between economic growth and economic development?

A) Economic growth always promotes economic development.
B) There is a negative relationship between economic growth and economic development.
C) While there is a rough correlation between economic growth and economic development, the relationship does not always hold.
D) There is no relationship between economic growth and economic

Question 20

The capabilities approach considers:

A) how much total output changes over time in a society.
B) what people can be and how much people can do in a society.
C) how to develop physical capital in an economy.
D) the environmental impact of economic growth.

Question 21

Development economists working in health care aim to:

A) force doctors to practice good medicine.
B) pass government policy mandating that families make better health care choices.
C) increase the frequency of preventative medicine, such as childhood immunizations.
D) increase government involvement in the production of necessary healthcare items.

Question 22

Educated workers are generally:

A) more productive.
B) less productive.
C) less healthy.
D) happier.

Question 23

What is the relationship of good governance to economic growth and development?

A) It is important to economic growth, but not to economic development.
B) It is important to both economic growth and development.
C) It is important to economic development, but not to economic growth.
D) It is important neither to economic growth nor development.

Question 24

In general, educating workers:

A) does not make them more productive.
B) increases overall economic growth.
C) contributes little to other capabilities.
D) encourages them to leave their native country.

Question 25

As school attendance has increased globally, policymakers are now challenged with increasing the:

A) availability of childhood education.
B) quality of childhood education.
C) availability of college education.
D) consistency of education across countries.

Question 26

People who live in countries with _______ average incomes generally live _______ lives.

A) lower; shorter
B) lower; longer
C) higher; shorter
D) None of these are true.

Question 27

Economic growth is _______ improved health conditions in a nation.

A) always needed for
B) not necessarily needed for
C) always more important than
D) negatively related to

Question 28

Development economists working in health care strive to figure out how to:

A) give doctors the right incentives to practice good medicine.
B) force families to make better health care choices.
C) influence markets in order to lower the costs of health care.
D) mandate that a certain number of students go into health care fields.

Question 29

National health insurance programs:

A) can increase the use of health clinics over traditional village doctors, who often have no medical training.
B) are usually too costly for developing nations to implement.
C) have solved the problem of providing high-quality care in places like India.
D) are always less efficient than privatized programs.

Question 30

Development economists working in health care want to:

A) force doctors to practice good medicine.
B) incentivize families to make better health care choices.
C) increase the effectiveness of healthcare systems.
D) All of these are true.

Question 31

In general, each additional year of schooling is worth about _______ percent more in overall earnings over the course of one's lifetime.

A) 10
B) 5
C) 25
D) 50

Question 32

A study of health care provisions in Delhi, India by Hammer and Das found:

A) doctors often work at or beyond their knowledge frontier in spite of lower pay.
B) doctors in public clinics are often more creative in diagnoses and care than doctors in private facilities.
C) health care clinics in poorer areas provide lower quality care because doctors often are working below their knowledge frontier.
D) national health insurance programs consistently provide quality care.

Question 33

Between 1999 and 2019, more children attended school:

A) only in countries with strong economic growth.
B) only in countries with free college education.
C) across the globe, even in countries that did not experience strong economic growth.
D) in developing countries, which contributed to a drop in family cohesiveness.

Question 34

In general, educating workers:

A) makes them more productive.
B) does not affect overall economic growth.
C) contributes little to other capabilities.
D) All of these are true.

Question 35

What is a major reason for the increase in worldwide school attendance between 1999 and 2019?

A) The abolishment of school fees
B) The creation of laws forbidding child labor
C) An increase in the minimum wages adults could earn
D) The enactment of legislation mandating education

Question 36

Which of the following is a reason why national health care programs are not as effective as they could be?

A) Health care providers tend to have a high absentee rate.
B) Clinics continue to use traditional remedies.
C) Many clinic doctors do not have sufficient knowledge to properly diagnose patients.
D) Health care is still too expensive for the majority of the population.

Question 37

Health care improvements often don't happen because:

A) citizens generally prefer government investment in other policies.
B) policy advisors tend to undervalue health care compared to other policy areas.
C) doctors in government clinics have limited incentives to practice good medicine.
D) home remedies and traditional medicine are generally more expensive.

Question 38

Which of the following is a reason why health care improvements often don't happen?

A) Improvements are too expensive to implement.
B) Doctors overprescribe testing and procedures, driving health care costs too high.
C) Health care facilities don't exist in some parts of the world.
D) Improvements are too expensive to have any significant impact.

Question 39

National health care programs are not as effective as they could be because:

A) high uptake causes overcrowding of existing healthcare clinics.
B) public health care clinics often run out of important drugs.
C) younger populations prefer not to use public health care systems.
D) many clinic doctors do not have sufficient knowledge to properly diagnose patients.

Question 40

In an effort to improve health care, many developing countries have implemented:

A) A subsidies for medical school.
B) national health insurance programs.
C) single payer health care systems.
D) tax incentives or companies to build healthcare infrastructure.

Question 41

When governments choose to favor some industries over others, they undertake:

A) industrial espionage.
B) corporate growth policy.
C) corporate pricing policy.
D) industrial policy.

Question 42

It's impossible to sustain economic growth or development in the absence of:

A) a rule of law.
B) natural resources.
C) membership to world organizations, like the United Nations.
D) income equality.

Question 43

China is an example of a country that has:

A) achieved economic growth without a democratic regime.
B) achieved economic growth only after a democratic regime was put in place.
C) failed to achieve economic growth, despite having an autocratic regime.
D) failed to achieve economic growth, despite having a democratic regime.

Question 44

Governments choose to pursue industrial policy to:

A) raise tax revenue.
B) spur economic growth.
C) craft a balance between economic growth and environmental sustainability.
D) create fair working conditions within certain industries.

Question 45

Economists like Hernando de Soto feel that a _______ is the key to economic development.

A) strong national defense
B) strong currency
C) strong titling system
D) stable currency

Question 46

What are the three main types of industrial policy?

A) Import substitution, export-led growth, and clustering
B) Import substitution, export-led growth, and crowding out
C) Import substitution, government subsidy, and clustering
D) Market substitution, government subsidy, and crowding out

Question 47

Which of the following is not a way a government might pursue industrial policy?

A) Offer incentives for foreign direct investment
B) Offer tax breaks to firms in a certain industry
C) Invest in research to create more growth
D) Directly manipulate markets in order to control prices

Question 48

Peruvian economist Hernando de Soto claims that the weak titling system in Latin America results in:

A) dead capital.
B) faster economic growth.
C) low inflation.
D) weaker governance.

Question 49

According to the capabilities approach, democracy is:

A) required for economic growth and essential in sustaining basic freedoms.
B) not required for economic growth, but it is essential in sustaining basic freedoms.
C) not required for economic growth and thus not a consideration when we discuss improving lives.
D) required for economic growth and should only be considered when creating capabilities that directly contribute to growth.

Question 50

Which of the following is not a tool of industrial policy?

A) Subsidies
B) Trade barriers
C) Tax breaks
D) Interest rate controls

Question 51

Economist Douglass North suggested that in development economics, government bodies, development agencies, and international groups should be referred to as:

A) organizations.
B) institutions.
C) agencies.
D) groups.

Question 52

Import substitution:

A) protects domestic industries until they are efficient enough to compete in the world market.
B) incentivizes consumers to substitute imported goods for domestic goods.
C) encourages domestic industries to ship exports to other countries.
D) mandates that imports can only be sold if the domestic economy does not produce that good.

Question 53

Which of the following would not be considered an industrial policy tool?

A) Incentives for foreign portfolio investment
B) Investment in research
C) Incentives for foreign direct investment
D) All of these are tools of industrial policy.

Question 54

According to economist Douglass North, institutions:

A) are the "rules of the game" in a society.
B) are the humanly devised constraints that shape human interactions.
C) include laws enforced by the government as well as cultural norms.
D) All of these are true.

Question 55

Property rights and a strong titling system are seen as important to economic development because they allow:

A) loans to be taken out against the equity of their assets, increasing investment.
B) loans to be taken out without risk, increasing the quality, but not quantity, of investment.
C) savers to invest in property and capital.
D) governments to charge higher tax rates on untitled property.

Question 56

Rwanda is an example of a country that has:

A) achieved economic growth only after a democratic regime was put in place.
B) achieved economic growth without a democratic regime.
C) failed to achieve economic growth despite having an autocratic regime.
D) failed to achieve economic growth, despite having a democratic regime.

Question 57

Industrial policy is an effort by a government to:

A) regulate prices in particular industries.
B) identify the most profitable industries in the world and adopt them in its country.
C) favor some industries over others.
D) regulate industrial labor markets.

Question 58

Which of the following would be referred to as an institution in development economics?

A) Cultural norms
B) The World Bank
C) The FBI
D) None of these are institutions.

Question 59

Most development economists agree that the most basic and important task of any government is to:

A) create a stable political system.
B) provide a national health care system.
C) maintain a stable currency.
D) ensure basic education for all citizens.

Question 60

In many developing countries, the system of titling is:

A) weak, allowing more and faster investment.
B) weak, slowing economic development.
C) strong, slowing the amount of property transfer.
D) strong, slowing economic growth.

Question 61

In place of import substitution, some Asian countries have instead:

A) supported export-led growth.
B) focused on developing agricultural production.
C) restricted trade to mostly occur with other Asian countries.
D) practiced extensive quantitative easing.

Question 62

Bangladesh has had success with:

A) clustering the textile industry.
B) clustering the fishing industry.
C) supporting export-led growth policy.
D) supporting import substitution policy.

Question 63

What do countries gain by opening up to free trade?

A) They gain access to a wider array of goods at cheaper prices.
B) They gain access to a wider array of goods, but generally have to pay more for those goods.
C) They gain access to a wider array of goods, but only if they implement environmental and labor regulations to export goods.
D) They receive more international assistance as long as they comply with new trade regulations.

Question 64

In reference to industrial policy, networks of interdependent firms, universities, and businesses that focus on production of a specific type of good are called:

A) bundles.
B) clusters.
C) vertical industries.
D) integrated industries.

Question 65

Which country has had success with export-led growth policy?

A) Italy
B) South Korea
C) Russia
D) Liberia

Question 66

Tariffs are:

A) taxes on exports.
B) subsidies for imports.
C) taxes on imports.
D) subsidies for exports.

Question 67

The "Asian miracle" refers to the:

A) success that countries like Japan, South Korea, and Taiwan have had with export-led growth policy.
B) fact that countries in Asia have managed to promote human development without strong economic growth.
C) fact that countries like Japan and South Korea have had consistent growth despite failing industrial policies.
D) high growth that countries like Japan and South Korea have experienced in the absence of a democratic government.

Question 68

According to the Gallup World Values Survey, 40 percent of those living in the poorest quartile of countries would like to:

A) get more education.
B) receive more aid.
C) trade freely.
D) emigrate.

Question 69

Which of the following statements describes the success of import substitution?

A) Approval from the World Trade Organization is required in order for import substitution to be successful.
B) Import substitution has been successful for the great majority of countries.
C) Import substitution is generally unsuccessful in the real world.
D) Import substitution is typically more successful than clustering, but less successful than export-led growth.

Question 70

Japan, Singapore, and Taiwan have all:

A) hadsuccess with import substitution policy.
B) failed to succeed after imitating South Korea's export-led growth policy.
C) failed tosucceedwith clustering as industrial policy.
D) had success with export-led growth policy.

Question 71

Export-led growth policy involves:

A) favoring industries that export goods over those that only produce domestically consumed goods.
B) investing heavily in industry through tax breaks and export subsidies, with the aim of selling goods around the world.
C) encouraging private investment in industries that currently export goods, rather than those expanding domestically.
D) discouraging imports with high tariffs.

Question 72

Which organization monitors and enforces trade agreements and promotes free trade?

A) The World Bank
B) UNICEF
C) The World Trade Organization
D) The National Alliance Trade Organization

Question 73

Developing countries:

A) should avoid trade until they are ready to compete globally.
B) should focus on importing goods rather than relying on export-led growth.
C) can use imports as a major source of development.
D) can use trade as a major source of development.

Question 74

In terms of industrial policy, clusters refer to:

A) networks of interdependent firms, universities, and businesses that focus on production of a specific type of good.
B) firms in an economy that are so interconnected they all fail when just one fails.
C) groups of underperforming industries.
D) the industries supported in a country practicing import substitution policy.

Question 75

What is a problem associated with import substitution as an industrial policy?

A) It removes the incentive for industries to be efficient.
B) Industries are often chosen for political, and not economic, reasons.
C) It often stays in place long after it was expected to lapse.
D) All of these are problems associated with import substitution.

Question 76

Which of the following is not a task of the World Trade Organization?

A) Monitoring trade agreements
B) Promoting free trade internationally
C) Enforcing trade agreements between nations
D) Ensuring trade doesn't adversely affect the environment

Question 77

The idea behind clustering is that:

A) each part of a network generally operates better in isolation, and if governments reduce regulation, firms should realize large gains in productivity.
B) too many firms in the same network cuts down on profits, so if governments can subsidize the most profitable businesses, they should realize large gains in productivity.
C) each part of a network is far less productive operating in isolation, so if governments can push each element of the network together, they should realize large gains in productivity.
D) many parts of a network don't have the technical expertise required to realize large gains in technology, so the government should provide technical resources to help these networks develop.

Question 78

Since the 1980s and 1990s, many Asian countries have:

A) supported export-led growth instead of import substitution policies.
B) supported import substitution policies instead of export-led growth.
C) conducted effective monetary policy.
D) failed in their attempts at industrial clustering.

Question 79

Which country has had success with clustering?

A) Japan
B) Liberia
C) China
D) Bangladesh

Question 80

The goal of import substitution is to:

A) protect domestic industries until they can become price competitive in the world market.
B) convince domestic consumers to change the types of goods they import.
C) shift domestic production away from capital intensive industries toward more labor intensive industries.
D) All of these are goals of important substitution.