Question 1

One of the characteristics of the poor is that they are

Accepted Answer

A) more likely to be employed in the modern industrial sector. 
B) more likely to come from small families. 
C) more likely to be well educated. 
D)  more likely to live in a rural area.

Question 2

The Ahluwalia-Chenery Welfare Index

Accepted Answer

A) is a method used to measure changes in absolute poverty. 
B) shows the value judgement implications of using the change in income per capita as a measure of the change in development. 
C) is a method used to measure changes in inequality. 
D)  is a method used to measure the growth rate of GDP.

Question 3

Distribution of income according to percentiles, such as the highest 40 percent or lowest 20 percent ?is known as the _______________ distribution of income.

Accepted Answer

A) size 
B) functional 
C) GNP-weighted 
D)  equal-weighted

Question 4

Consider the following distribution of income in a 12-person economy, with the modern urban?wage ₌ 3, the traditional rural income ₌ 1, and the informal urban wage ₌ 2: (1, 1, 1, 1, 2, 2, 2, 2, 3, 3, 3, 3). The poverty line ₌ 1.25. Suppose rural incomes are raised to 1.5 through expanded agricultural exports. What happens to relative inequality? Absolute poverty? Calculate the Ahluwalia-Chenery Welfare Index for terciles (3 fractiles) under GNP weights and equal weights. Why is the equal-weighted index higher?

Accepted Answer

The answer of Consider the following distribution of income in...

Question 5

What are the characteristics of the poor (be specific)?

Accepted Answer

The answer of What are the characteristics of the poor...

Question 6

Developing countries who have adopted capital intensive technologies tend to have

Accepted Answer

A) relatively higher Gini coefficients. 
B) relatively lower Gini coefficients. 
C) Gini coefficients equal to one. 
D)  Gini coefficients equal to zero.

Question 7

The absolute poverty line

Accepted Answer

A) decreases as real income grows. 
B) shows the average income of the lowest income group. 
C) can be measured with the Lorenz curve. 
D)  None of the above.

Question 8

Increasing GNP is a necessary but not a sufficient condition for improving living standards in less developed countries. True or false, explain.

Accepted Answer

A) True 
 B)False

Question 9

Brazil's growth rate during the 1960s was 6.0 percent when poverty weights were used to evaluate growth, compared with 8.2 percent when GNP weights were used to evaluate growth. One can conclude from these numbers that

Accepted Answer

A) average income growth was greater for poor households than for rich households. 
B) average income growth was greater for rich households than for poor households. 
C) more and more households were falling below the poverty line. 
D)  the size distribution of income was getting worse.

Question 10

The following income distribution data are for Brazil.
  
a.Carefully graph the Lorenz curve, labeling the axes.

Accepted Answer

The answer of The following income distribution data are for...

Question 11

Explain the difference between size and functional measures of income distribution.

Accepted Answer

The answer of Explain the difference between size and functional...

Question 12

The Gini coefficient provides a measure of

Accepted Answer

A) the level of poverty. 
B) the level of relative inequality. 
C) disguised unemployment. 
D)  the rate of growth.

Question 13

Poverty is better studied with size distribution measures than with those based on factor distribution because

Accepted Answer

A) labor income may be highly concentrated in well-paid modern sector workers. 
B) some poor farmers may receive a sizable share of income in rent. 
C) income from nonmarket activities, such as foraging, may be important. 
D)  All of the above.

Question 14

Which of the following policies may decrease the level of capital intensity in industry?

Accepted Answer

A) an increase in the cost of capital 
B) a decrease in the minimum wage 
C) an increase in the elasticity of substitution 
D)  All of the above

Question 15

About how many girls and women are said to be "missing" in LDCs?

Accepted Answer

A) 2 million 
B) 20 million 
C) 200 million 
D)  2 billion

Question 16

Distinguish between economic growth by modern sector enlargement, modern sector enrichment, and traditional sector enrichment. For each of the three cases, show what happens to absolute poverty and to relative inequality, using a precise measure of each.

Accepted Answer

The answer of Distinguish between economic growth by modern sector...

Question 17

With modern sector enrichment growth, inequality will

Accepted Answer

A) first rise and then fall. 
B) first fall and then rise. 
C) remain about the same. 
D)  None of the above.

Question 18

What is the Grameen Bank and what is its contribution to tackling rural poverty?

Accepted Answer

The answer of What is the Grameen Bank and what...

Question 19

The number of people in the world who are absolutely poor is closest to

Accepted Answer

A) a quarter-billion. 
B) a half-billion. 
C) one billion. 
D)  two billion. 
E)  four billion.

Question 20

Consider the following distribution of income in a 12-person economy, with the modern urban ?wage ₌ 10, the traditional rural income ₌ 2, and the informal urban wage ₌ 4: (2, 2, 2, 2, 4, 4, 4, 4, 10, 10, 10, 10).
a.Suppose rural incomes are raised to 3, other things equal. Show the change using the Lorenz curve. How would this type of growth be characterized? (It is suggested that you use the Fields growth decomposition in answering. This shows traditional sector enrichment growth.) b.Calculate the Ahluwalia-Chenery Welfare Index for terciles (3 fractiles) under GNP weights and equal weights. Which index is higher and why?

Accepted Answer