Question 1

Which of the following is generally regarded as the true index of economic growth?

Accepted Answer

A)  An increase in national income at constant prices during a year
B)  A sustained increase in real per capita income
C)  An increase in national income at current prices over time
D)  An increase in national income along with a corresponding increase in population A

Question 2

The concept of economic growth is___________.

Accepted Answer

A)  Identical with the concept of economic development
B)  Narrower than the concept of economic development
C)  Wider as compared to that of economic development
D)  Unrelated to the concept of economic development B

Question 3

Which of the following explains the term economic development?

Accepted Answer

A)  Improvement in the technology involved
B)  Improvement in production
C)  Improvement in distribution system
D)  All the above D

Question 4

Economic development means__________.

Accepted Answer

A)  Economic growth.
B)  Economic growth plus structural and qualitative changes.
C)  Improvement in the living standard of the urban population.
D)  Sustainable increases in Gross National Product (GDP) .

Question 5

The classical theory of economic development is of relevance for the less developed countries today because it lays emphasis on .

Accepted Answer

A)  Need for favourable institutional and social initiatives
B)  Extension of markets
C)  Capital accumulation
D)  All of the above

Question 6

The rate of growth of an economy mainly depends upon ___________ .

Accepted Answer

A)  The rate of growth of the labour force
B)  The proportion of national income saved and invested
C)  The rate of technological improvements
D)  All of the above

Question 7

Economic development refers to __________.

Accepted Answer

A)  Economic growth.
B)  Economic growth plus changes in output distribution and economic structure.
C)  Improvement in the well-being of the urban population.
D)  Sustainable increases in Gross National Product.

Question 8

Economic growth can be seen by an outward shift of __________ .

Accepted Answer

A)  The Production Possibility Frontier
B)  The Gross Domestic Barrier
C)  The Marginal Consumption Frontier
D)  The Minimum Efficient Scale

Question 9

Which one of the following statements is not in tune with the Ricardian theory of growth?

Accepted Answer

A)  Rent tends to rise
B)  Money wages tend to rise
C)  Profits tend to fall
D)  Profits tend to rise

Question 10

In the Ricardian system, a crucial role in development was assigned to .

Accepted Answer

A)  Specialisation
B)  Technological changes
C)  Profits
D)  Government

Question 11

Ricardo built his theory round .

Accepted Answer

A)  Value
B)  Capital
C)  Wages
D)  Natural resources

Question 12

Which of the following explains the term economic growth?

Accepted Answer

A)  Increase in per capita production
B)  Increase in per capita real income
C)  Structural change in the economy
D)  All the above are right

Question 13

Economic development is characterized by

Accepted Answer

A)  Structural change in the economy
B)  Change in the occupational structure
C)  Both A and B
D)  None of the above

Question 14

Which of the following models uses three distinct concepts of stages of growth?

Accepted Answer

A)  Ramsey model
B)  Harrod model
C)  Domar model
D)  Lewis model

Question 15

Among the following determinants of growth, which is a non-economic factor?

Accepted Answer

A)  Natural resources
B)  Population growth
C)  Favourable legislation
D)  Capital accumulation

Question 16

In the Ricardian scheme of things, savings are provided by .

Accepted Answer

A)  Labourers
B)  Capitalists
C)  Landlords
D)  Both B and C

Question 17

The concept of Economic Planning in India is derived from?

Accepted Answer

A)  USA
B)  UK
C)  Australia
D)  Russia

Question 18

Besides increase in output, economic development is concerned with:

Accepted Answer

A)  Inputs and their efficiency
B)  Equitable distribution of income
C)  Life sustenance, self-esteem and freedom from want, ignorance and squalor
D)  All of the above

Question 19

Which of the following is not an indicator of economically underdeveloped countries?

Accepted Answer

A)  Low per capita income
B)  High death-rate
C)  Low proportion of labour force in the primary sector
D)  High level of illiteracy

Question 20

Which one of the following is not an assumption of the Ricardian theory?

Accepted Answer

A)  Rising real wages
B)  Fixity of land
C)  Operation of the law of diminishing returns
D)  Perfect competition

Exam 1: Economic Growth and Development Theory: Part A