Deck 35: Development Economics

Question 1

Health care improvements often don't happen because:

A)they are too expensive to have any significant impact.
B)national health insurance only exists in highly developed countries,like the U.S.
C)doctors in government clinics have no incentive to practice good medicine.
D)All of these statements are true.

Answer 1

doctors in government clinics have no incentive to practice good medicine.

Question 2

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

A)$1.00
B)$1.25
C)$2.25
D)$3.00

Answer 2

$1.25

Question 3

Policies which promote good governance of a society are:

A)extremely rare.
B)always based on existing U.S.policy.
C)central to economic growth.
D)None of these statements is true.

Answer 3

central to economic growth.

Question 4

Development economics focuses on how countries can promote:

A)health.
B)education.
C)good governance.
D)All of these are central to development economics.

Question 5

Economic growth is:

A)about the quality of life for all sectors of society.
B)an indicator of individual poverty.
C)a measurement of available resources.
D)None of these statements is true.

Question 6

An example of a capability considered in the capabilities approach would be:

A)being able to live a long and healthy life.
B)to have adequate food and shelter.
C)to speak one's mind.
D)All of these are considered capabilities.

Question 7

In reality,overall growth and income for the poorest are:

A)highly positively correlated,but not perfectly.
B)uncorrelated.
C)highly negatively correlated,but not perfectly.
D)slightly positively correlated.

Question 8

Which of the following would NOT be considered a capability in the capabilities approach?

A)To be able to find secure and meaningful work
B)To be able to afford to travel freely
C)To live free of the fear of violence
D)All of these are considered capabilities.

Question 9

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

Question 10

The capabilities approach allows us to focus on issues of:

A)poverty,inequality,and human development.
B)income,poverty,and economic growth.
C)human development,capital development,and technological progress.
D)personal happiness,individual pleasure,and pain avoidance.

Question 11

In general,economic growth:

A)causes economic development,but development does not cause growth.
B)does not cause economic development,but development causes growth.
C)does not cause economic development,and development does not cause growth.
D)causes economic development,and development causes growth.

Question 12

Economic development is:

A)about the quality of life for all sectors of society.
B)an indicator of individual poverty.
C)a measurement of available resources.
D)about increases in real GDP.

Question 13

The Nobel Prize-winning economist from Harvard who developed the capabilities approach is:

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

Question 14

Policies which promote improvements in health for a society are central to:

A)economic development.
B)rising health care costs.
C)government deficit spending.
D)All of these statements are true.

Question 15

Health care improvements often don't happen because:

A)health care facilities don't exist in some parts of the world.
B)home remedies and traditional village doctors are more affordable.
C)doctors in government clinics have no incentive to practice good medicine.
D)All of these statements are true.

Question 16

A country with high economic growth:

A)will definitely experience high economic development.
B)will never experience high economic development.
C)will probably not experience high economic development.
D)may not experience economic development without attention paid to policy actions.

Question 17

Health care improvements often don't happen because:

A)they are too expensive to implement.
B)doctors overprescribe and drive the cost of health care too high.
C)health care facilities don't exist in some parts of the world.
D)All of these statements are true.

Question 18

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 over time in a society.
C)how much human capital improves over time in a society.
D)how much human capital one society has relative to another.

Question 19

Policies which promote education are central to:

A)economic development.
B)economic growth.
C)increasing the capabilities of a society.
D)All of these statements are true.

Question 20

About how many people out of 7 billion live on just $1.25 a day in the world?

A)1 billion
B)500 million
C)1.5 billion
D)2 billion

Question 21

A major reason for the increase in school attendance by children between 1999 and 2011 throughout the world was:

A)the abolishment of school fees.
B)the creation of labor laws forbidding child labor.
C)an increase in the minimum wages adults could earn.
D)All of these contributed significantly to the increase in school attendance by children.

Question 22

In terms of economic growth,educated workers are generally:

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

Question 23

The improved health of a nation can increase:

A)the productivity of workers.
B)economic growth.
C)economic development.
D)All of these statements are true.

Question 24

In general,each additional year of schooling is worth about:

A)10 percent more in overall earnings over the course of a lifetime.
B)5 percent more in overall earnings over the course of a lifetime.
C)25 percent more in overall earnings over the course of a lifetime.
D)50 percent more in overall earnings over the course of a lifetime.

Question 25

National health insurance programs:

A)can increase use of health clinics versus traditional village doctors,who often have no medical training.
B)are usually too costly for developing nations to implement.
C)has solved the problem of providing high-quality care in places like India.
D)All of these statements are true.

Question 26

If average incomes of a nation don't rise over time:

A)improvements in health are impossible.
B)improvements in health are still possible.
C)improvements in health are still very likely.
D)it will have no impact on the nation's ability to improve health.

Question 27

One of the challenges for development economists working in health care is to figure out a way to:

A)give doctors the right incentives to practice good medicine.
B)give incentives to families to make better health care choices.
C)increase the frequency of preventative medicine,such as immunizing children.
D)All of these statements are true.

Question 28

Between 1999 and 2011,globally the number of children who were not attending school:

A)dropped to less than 16 percent.
B)reduced by half.
C)doubled.
D)dropped to less than 6 percent.

Question 29

Economic growth _____________ improved health conditions in a nation.

A)is always needed for
B)is not necessarily needed for
C)is only loosely correlated with
D)None of these statements is true.

Question 30

People who live in countries with ________ average incomes generally live __________ lives.

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

Question 31

Between 1999 and 2011,throughout the world more children attended school:

A)only in those countries with strong economic growth.
B)only in those countries with free college education.
C)even in countries that did not experience strong economic growth.
D)None of these statements is true.

Question 32

The study of health care provision in Delhi,India by Hammer and Das found:

A)doctors often worked at or beyond their knowledge frontier.
B)doctors in public clinics were often more creative in diagnoses and care than those who worked in private facilities.
C)unless doctors were intrinsically motivated,no incentive exists for them to provide high quality care.
D)All of these statements are true.

Question 33

In terms of capabilities,education can be seen as:

A)contributing to better family planning.
B)a factor that reduces income inequality in countries.
C)a feature of more democratic regimes.
D)All of these statements are true.

Question 34

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

A)health care providers tend to have a high absentee rate.
B)public health care clinics often run out of important drugs.
C)doctors often diagnose below their knowledge frontier.
D)All of these statements are true.

Question 35

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

A)public health care clinics often run out of important drugs.
B)traditional Western medicine is largely untrusted in most parts of the developing world.
C)many doctors in clinics do not have sufficient knowledge to properly diagnose patients.
D)All of these statements are true.

Question 36

Doctors in private health care clinics provide better care than those in public clinics because:

A)they are better trained.
B)they have more incentive to practice good medicine.
C)their fixed salary is generally higher than the fixed salaries of public clinic doctors.
D)All of these statements are true.

Question 37

The newest challenge for development economists is:

A)increasing availability of education to children.
B)increasing the quality of education to children.
C)increasing the availability of college education.
D)increasing the consistency of education across countries.

Question 38

National health insurance programs:

A)can increase use of health clinics versus traditional village doctors,who often have no training.
B)are starting to be implemented in poorer areas like Ghana to increase access to health care.
C)still face challenges in some areas to provide good,high quality care.
D)All of these statements are true.

Question 39

Which of the following has been found to be most effective in improving the quality of education?

A)Training women in the community to offer supplemental lessons
B)Distributing textbooks
C)Providing parents with information about the quality of the children's schools
D)All of these were found to equally improve the quality of education.

Question 40

In general,educating workers:

A)makes them more productive.
B)increases overall economic growth.
C)contributes to other capabilities.
D)All of these statements are true.

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

The evidence to support economist de Soto's claim that a strong titling system would lead countries to increase their economic development is:

A)strong and undisputed.
B)mixed,and implies they may be important with other factors present.
C)absent,and his claims are unfounded.
D)None of these statements is true.

Question 43

China is a clear example of a country that has:

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

Question 44

Hernando de Soto claims the ___________ in Latin America results in "dead capital."

A)weak titling system
B)strong titling system
C)general lack of strong national defense
D)generally weak currencies

Question 45

Governments choose to pursue industrial policy to:

A)raise tax revenue.
B)spur economic growth.
C)create publicly owned companies.
D)regulate the growth of certain industries.

Question 46

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,not quantity,of investment.
C)savers to invest in property and capital.
D)None of these statements is true.

Question 47

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

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

Question 48

Democracy is ______________ to economic growth.

A)clearly linked and is essential
B)clearly linked and is not essential
C)not so clearly linked,yet seems to be essential
D)not so clearly linked and does not seem to be essential

Question 49

Rwanda is a clear example of a country that has:

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

Question 50

In many 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 51

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

A)a rule of law.
B)improvements in education.
C)membership to world organizations,like the United Nations.
D)All of these are essential to sustainable growth and development.

Question 52

Democracy _______ essential to economic growth and according to the capabilities approach should _______________.

A)is;also be seen as essential to sustaining basic freedoms
B)is not;still be seen as essential in sustaining basic freedoms
C)is not;not be considered as improving lives if it doesn't directly contribute to growth
D)is;not be considered to create capabilities without directly contributing to growth

Question 53

Which of the following industrial policies are effective for developing countries to deal with inflows of capital from overseas?

A)Import substitution
B)Export-led growth
C)Clustering
D)All of these are effective ways for developing nations to use capital inflow.

Question 54

Good governance is:

A)important to economic growth,but not to economic development.
B)important to both economic growth and development.
C)important to economic development,but not to economic growth.
D)not important to either economic growth or development.

Question 55

Economist Douglass North's definition of institutions:

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

Question 56

The term institutions is commonly used to refer to:

A)government bodies.
B)development agencies.
C)international groups.
D)All of these statements are true.

Question 57

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 58

An example of a tool a government might use to pursue industrial policy would be:

A)incentives for foreign direct investment.
B)tax breaks.
C)investment in research.
D)All of these statements are true.

Question 59

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 their country.
C)favor some industries over others.
D)All of these statements are true.

Question 60

Economist Douglass North suggests that the term used to describe government bodies,development agencies,and international groups should be:

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

Question 61

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 62

Recently,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)been extremely successful in their attempts at industrial clustering.
D)failed in their attempts at industrial clustering.

Question 63

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

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

Question 64

If a government pursues the industrial policy of import substitution,it is:

A)protecting domestic industries until they are efficient enough to compete on the world market.
B)giving consumers incentive to substitute imported goods for those domestically produced.
C)encouraging domestic industries to ship imports to other countries.
D)mandating that imports can only be sold if the domestic economy does not produce that particular good.

Question 65

A country that has had success with export-led growth policy is:

A)North Korea.
B)South Korea.
C)Russia.
D)Liberia.

Question 66

An example of an industrial policy would be:

A)subsidies.
B)trade barriers.
C)tax breaks.
D)All of these statements are true.

Question 67

The idea behind clustering is that each part of a network is ___________ productive operating in isolation,so if governments can push each element of the cluster in unison,they should realize ___________ in productivity.

A)far more;huge gains
B)far less;huge losses
C)far less;huge gains
D)far more;huge losses

Question 68

The "Asian miracle" refers to:

A)the success countries like Japan,South Korea,and Taiwan have had with export-led growth policy.
B)the success countries like Japan,South Korea,and Taiwan have had with import substitution policy.
C)the fact that countries like Japan and South Korea have had consistent growth despite their failing industrial policies.
D)the high growth in countries like Japan and South Korea despite the absence of a democratic government.

Question 69

Successful export-led growth policy entails:

A)choosing the "right" industries to invest in.
B)blocking the "right" industries from importing to domestic markets.
C)choosing the "right" incentives to encourage exports.
D)choosing the "right" disincentives to reduce imports.

Question 70

South Korea has:

A)had success with export led growth policy.
B)chosen "winners" to invest in by supporting companies like Samsung.
C)chosen to encourage exports instead of supporting import substitution policy.
D)All of these statements are true.

Question 71

The traditional industrial policy of import substitution:

A)has been successful for those countries that managed to pick the "right" industries.
B)has been successful for the great majority of countries.
C)is unsuccessful in the real world.
D)is used by most countries with some degree of success.

Question 72

In terms of industrial policy,clusters refers to:

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

Question 73

Realizing the problems with import substitution,some Asian countries have:

A)supported export-led growth.
B)become isolationist,like North Korea.
C)practiced contractionary monetary policy.
D)worked to maintain a fixed exchange rate.

Question 74

When one country can produce a good more efficiently than another country:

A)that country should produce that good and be the sole "winner" of trade.
B)that country can specialize in that good and choose only to export goods.
C)both can specialize in the industry in which they have comparative advantage and experience mutual gains.
D)None of these statements is true.

Question 75

The idea behind the traditional industrial policy of import substitution is:

A)to protect infant industries until they can become price competitive in the world market.
B)give certain industries a chance to enter a market and gain efficiencies that companies elsewhere in the world have already gained in that industry.
C)build up home industries to compete with others in the world.
D)All of these statements are true.

Question 76

Export-led growth policy involves:

A)favoring those industries that export goods over those that only produce domestically consumed goods through high tariffs.
B)investing heavily in an 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 77

Something that would not be considered a tool in pursuit of industrial policy would be:

A)incentives for foreign portfolio investment.
B)investment in research.
C)incentives for foreign direct investment.
D)All of these are examples of industrial policies.

Question 78

Japan,Singapore,and Taiwan have all:

A)had success with import substitution policy.
B)imitated South Korea's export-led growth policy and failed.
C)imitated South Korea's import substitution policy and failed.
D)had success with export-led growth policy.

Question 79

An example of a country that has had success with clustering is:

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

Question 80

A problem associated with import substitution as an industrial policy is:

A)it removes the incentive for industries to be efficient.
B)industries are often chosen for political,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 policy.