Question 1

Which growth model inspired the use of capital-output ratio for development planning?
A)the Harrod-Domar model
B)Solow's mode
C)Kaldor's model
D)Feldman's model

Accepted Answer

The Harrod-Domar model inspired the use of the capital-output ratio for development planning by emphasizing the importance of savings and investment for economic growth.

Question 2

Which of the following models makes the assumption of constant saving-income ratio?
A)Kaldor model
B)Leontief model
C)Harrod-Domar model
D)Joan Robinson model

Accepted Answer

The Harrod-Domar model assumes a constant saving-income ratio, which is a key feature of this economic growth model. It suggests that the growth rate of an economy is directly related to the level of savings and inversely related to the capital-output ratio.

Question 3

The Harrod-Domar model is one of the well- known models of growth. Which of the two authors of this model wrote earlier and in which year?
A)Domar in 1940
B)Harrood in 1939
C)Domar in 1946
D)Domar in 1948

Accepted Answer

Harrod published his work on the model in 1939, which predates Domar's contributions.

Question 4

The concept of economic growth is __________ .
A)Identical with the concept of economic development
B)Narrower than the concept of economic development
C)W ider as compared to that of economic development
D)Unrelated to the concept of economic development

Accepted Answer

Economic growth refers specifically to the increase in a country's output or income over time, whereas economic development encompasses economic growth along with improvements in living standards, reduction in poverty, and equitable distribution of wealth, making it a broader concept.

Question 5

Economic growth in India will happen necessarily if there is .
A)Population growth
B)Capital formation
C)Technical progress in the global economy
D)All the above

Accepted Answer

Capital formation is crucial for economic growth as it means more investment in physical assets like machinery, buildings, and infrastructure, which increases productivity and economic output. Population growth and technical progress in the global economy can contribute to economic growth but are not necessary conditions.

Question 6

Which of the following is inconsistent with Adam Smith's theory of development?
A)Development process is cumulative in nature
B)There is no limit to the growth process
C)Capital accumulation and market extension are two prerequisites for output expansion
D)There should be no government interference in the working of the economy

Accepted Answer

The answer of Which of the following is inconsistent with...

Question 7

Karl Marx ideas about development theory are available in __________ .
A)Communist Manifesto
B)Das Kapital
C)Capital: A Critique of Political Economy
D)None of these

Accepted Answer

The answer of Karl Marx ideas about development theory are...

Question 8

In Schumpeter's theory of development maximum stress has been laid on:
A)Capital
B)Interest
C)Land
D)Entrepreneurship

Accepted Answer

Schumpeter's theory of development emphasizes the role of the entrepreneur as the dynamic force behind innovation and economic growth. Entrepreneurs introduce new products, processes, and technologies, driving the creative destruction process that characterizes capitalist development.

Question 9

Which sector was emphasised most by Ricardo in the context of economic growth?
A)Trade
B)Industry
C)Agriculture
D)Services

Accepted Answer

David Ricardo emphasized agriculture in the context of economic growth, particularly through his theory of comparative advantage and the impact of agricultural productivity on the economy.

Question 10

Which one of the following, according to Ricardo, would form a bottleneck to economic growth?
A)Shortage of land
B)Rising rent
C)Shortage of gold and silver
D)Rising wage bills

Accepted Answer

David Ricardo, a classical economist, posited that a shortage of land would lead to diminishing returns in agricultural production, which in turn would form a bottleneck to economic growth. This is because as population grows, less fertile land is brought into production, leading to higher costs and limiting economic expansion.

Question 11

Which of the following is inconsistent with the Schumpeter's theory of development?
A)The course of growth is continuous
B)The output expansion, initiated by the entrepreneur, increases in size with time, making it cumulative
C)Growth takes place on account of entrepreneurs who, with the help of bank credit, invest ininnovative activity
D)Capitalism destroys itself by being successful through the erosion of its institutions, by the hostility of its intellectuals and other elite classes, and also by the weakening of entrepreneurial innovation

Accepted Answer

Schumpeter's theory of development, also known as creative destruction, suggests that economic growth is not a smooth, continuous process but rather one characterized by cycles of innovation and destruction. Therefore, the idea that growth is continuous contradicts Schumpeter's view that development occurs through disruptive innovations leading to periods of rapid change followed by adjustments.

Question 12

According to the Schumpeter's model, the innovating entrepreneurs get the necessary finance from__________.
A)Voluntary Savings
B)Own Resources
C)Bank Credit
D)Government

Accepted Answer

According to Schumpeter's model, the innovating entrepreneurs primarily get the necessary finance from bank credit. Schumpeter emphasized the role of the banking system in providing credit to entrepreneurs to fund innovations, which in turn drives economic development and growth.

Question 13

Which one of the following was given a central place by Schumpeter in his theory of development?
A)Capital accumulation
B)Role of the Government
C)Need for balanced growth
D)Role of innovations

Accepted Answer

Schumpeter emphasized the role of innovations and entrepreneurs in driving economic development and change. He argued that innovations in the form of new products, processes, markets, and forms of organization are the critical source of economic development.

Question 14

In which year was the first volume of Das Capital be Karl Marx published?
A)1848
B)1859
C)1867
D)1873

Accepted Answer

The first volume of Das Kapital by Karl Marx was published in 1867.

Question 15

Myrdal builds his theory of economic development around the idea of__________ .
A)Regional inequalities on the national plane
B)Regional inequalities on the international plane
C)Both A and B
D)None of the above

Accepted Answer

Myrdal's theory of economic development emphasizes the significance of both national and international regional inequalities, arguing that these disparities are crucial in understanding and addressing development issues.

Question 16

The concept of, Vicious Circle of Poverty' is related to __________.
A)Karl Marx
B)Nurkse
C)Adam Smith
D)None of the above

Accepted Answer

The concept of the "Vicious Circle of Poverty" is related to Ragnar Nurkse, who described how poor countries remain poor due to a circular constellation of forces that act and react upon one another.

Question 17

Who formulated the theory of circular and cumulative causation which explains the perpetuation of underdevelopment through growing inequalities between developed and the underdeveloped countries?
A)Lewis
B)Gunnar Myrdal
C)Higgins
D)J. H. Boeke

Accepted Answer

Gunnar Myrdal developed the theory of circular and cumulative causation, which describes how inequalities can become self-perpetuating between more developed and less developed regions or countries.

Question 18

In the context of which region was the 'big push' strategy of development formulated?
A)South Asia
B)South East Asia
C)Eastern Europe
D)East Africa

Accepted Answer

The 'big push' strategy of development was formulated in the context of Eastern Europe, particularly in the post-World War II period, to rapidly industrialize and develop the economies of these countries.

Question 19

Which among the following is a characteristic of underdevelopment?
A)Vicious circle of poverty
B)Rising mass consumption
C)Growth of industries
D)High rate of urbanization

Accepted Answer

A vicious circle of poverty is a characteristic of underdevelopment, where low income leads to low savings, which in turn leads to low investment, thereby perpetuating a state of poverty.

Question 20

Who fixes the poverty line?
A)Government
B)Lok Sabha
C)Rajya Sabha
D)Planning Commission

Accepted Answer

The Planning Commission, now replaced by the NITI Aayog, was responsible for defining and fixing the poverty line in India.

Quiz 2: Economic Growth and Development Theory: Part B

Which growth model inspired the use of capital-output ratio for development planning?

Which of the following models makes the assumption of constant saving-income ratio?

The Harrod-Domar model is one of the well- known models of growth. Which of the two authors of this model wrote earlier and in which year?

The concept of economic growth is __________ .

Economic growth in India will happen necessarily if there is .

Which of the following is inconsistent with Adam Smith's theory of development?

Karl Marx ideas about development theory are available in __________ .

In Schumpeter's theory of development maximum stress has been laid on:

Which sector was emphasised most by Ricardo in the context of economic growth?

Which one of the following, according to Ricardo, would form a bottleneck to economic growth?

Which of the following is inconsistent with the Schumpeter's theory of development?

According to the Schumpeter's model, the innovating entrepreneurs get the necessary finance from__________.

Which one of the following was given a central place by Schumpeter in his theory of development?

In which year was the first volume of Das Capital be Karl Marx published?

Myrdal builds his theory of economic development around the idea of__________ .

The concept of, Vicious Circle of Poverty' is related to __________.

Who formulated the theory of circular and cumulative causation which explains the perpetuation of underdevelopment through growing inequalities between developed and the underdeveloped countries?

In the context of which region was the 'big push' strategy of development formulated?

Which among the following is a characteristic of underdevelopment?

Who fixes the poverty line?