Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 9

Professor Bucks and Professor Liber are having a debate about the role of economic growth in contributing to economic development. Professor Bucks contends that economic growth is the only thing to consider in development, as people's utility is directly related to their income. Professor Liber agrees that income is directly related to development, but says that there are other things to consider. Given what we've learned in this chapter, pick the option that is most correct according to the capabilities approach. a. Professor Bucks is correct, because increases in income are the only way to measure economic development
B) Professor Bucks is correct, because capabilities always increase when income does.
C) Professor Liber is correct, because income is unrelated to capabilities, which are the most important factor in development.
D) Professor Liber is correct, because income is related to development, but it is not the only contributor to capabilities.