Question 1

Economic development refers to
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.

Accepted Answer

D

Question 2

The Physical Quality of Life Index (PQLI) combines three indicators. They are
A)infant mortality, life expectancy and adult literacy rate.
B)crime rate, clean environment and quality of housing.
C)air pollution rate, water pollution rate and sanitation.
D)health, education and environment.

Accepted Answer

C

Question 3

The Human Development Index (HDI) summarizes a great deal of social performance in asingle composite index, combining
A)disparity reduction rate, human resource development rate and the composite index.
B)longevity, education and living standard.
C)minimum schooling, adult literacy and tertiary educational attainment.
D)human resource training, development and r&d.

Accepted Answer

A

Question 4

As economic development proceeds, income inequality tends to follow a(n) __________ curve
A)convex.
B)inverted u-shaped.
C)l-shaped.
D)s-shaped.

Accepted Answer

The concept of income inequality following an inverted U-shaped curve is known as the Kuznets curve. This theory suggests that as an economy develops, income inequality first increases and then decreases after a certain average income is attained.

Question 5

The Harrod-Domar growth model suggests that growth is
A)directly related to savings and inversely related to the capital/output ratio.
B)directly related to the capital/output ratio and inversely related to savings.
C)indirectly related to savings and the capital/output ratio.
D)directly related to savings and the capital/output ratio

Accepted Answer

The answer of The Harrod-Domar growth model suggests that growth...

Question 6

Rostow's economic stages are
A)the preconditions for take-off, the take-off, the drive to maturity, and the age of creative destruction.
B)the traditional society, the preconditions for take-off, the take-off, the drive to maturity, and the age of high mass consumption.
C)the preconditions for consumption, the replication, the drive to maturity, and the age of high mass consumption.
D)the learning curve, the age of high mass consumption, post-take-off, and the drive to maturity.

Accepted Answer

Rostow's economic stages include the traditional society, the preconditions for take-off, the take-off, the drive to maturity, and the age of high mass consumption.

Question 7

A value of 1 in Gini index represents
A)low inequality.
B)maximum inequality.
C)100% inequality.
D)1% inequality.

Accepted Answer

A Gini index of 1 represents maximum inequality, where one person or group holds all the wealth or income.

Question 8

The Lorenz curve shows
A)patterns of poverty between developed and developing countries.
B)the change in gdp per capita over time.
C)the poorest's income shares fall in the early stages of growth.
D)income concentration relative to a 45-degree line.

Accepted Answer

The Lorenz curve is a graphical representation used to illustrate the distribution of income or wealth within a society, showing the proportion of total income earned by cumulative percentages of the population. The curve is plotted against a 45-degree line that represents perfect equality, where everyone has the same income. The further the Lorenz curve is from the 45-degree line, the greater the degree of income inequality.

Question 9

Economic growth can be seen by an outward shift of:
A)the production possibility frontier
B)the gross domestic barrier
C)the marginal consumption frontier
D)the minimum efficient scale

Accepted Answer

Economic growth is represented by an outward shift of the production possibility frontier (PPF), indicating that an economy can produce more goods and services than before, expanding its capacity.

Question 10

The concept of economic growth is:
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

Accepted Answer

Economic growth refers specifically to the increase in a country's output or income over time, while 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 11

The rate of growth of an economy mainly depends upon:
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

Accepted Answer

The rate of growth of an economy is influenced by multiple factors including the growth of the labor force, the proportion of national income that is saved and invested, and the rate of technological improvements. These elements collectively contribute to economic expansion by enhancing productivity, increasing capital, and improving efficiency.

Question 12

The stationary state as envisaged by Adam Smith, is marked by:
A)low rate of profit
B)subsistence level wages
C)high rents
D)all of the above

Accepted Answer

Adam Smith's concept of the stationary state is characterized by a low rate of profit, subsistence level wages, and high rents, as economic growth stagnates and competition for resources intensifies.

Question 13

Which growth model inspired the use of capital-output ratio for development planning?
A)the harrod-domar model
B)solow's model
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. It emphasizes the importance of savings and investment as drivers of economic growth and uses the capital-output ratio to determine the necessary investment to achieve a desired growth rate.

Question 14

With economic growth, the proportion of labour-force engaged in agriculture:
A)increases
B)decreases
C)remains unaffected
D)changes in an uncertain manner

Accepted Answer

As economies grow, there is a shift from agriculture to manufacturing and services, leading to a decrease in the proportion of the labor force engaged in agriculture. This is part of the structural transformation process of economies.

Question 15

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 the 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 16

Identify the model which is concerned with the 'golden age' equilibrium:
A)kaldor model
B)joan robinson model
C)keynesian model
D)domar model

Accepted Answer

The Joan Robinson model is concerned with the 'golden age' equilibrium, which refers to a state of steady growth where all factors of production grow at the same rate, and the economy is in a state of full employment.

Question 17

India's First Five Year Plan was based on:
A)mahalanobis model
B)feldman model
C)harrod-domar model
D)leontief model

Accepted Answer

India's First Five Year Plan, which was launched in 1951, was based on the Harrod-Domar model. This model emphasized the importance of savings and investment as drivers of economic growth.

Question 18

The Gini coefficient is a technique frequently used to show:
A)variations in life expectancy
B)income inequality
C)differences in infant mortality
D)the education gap

Accepted Answer

The Gini coefficient is a measure used to indicate the level of income inequality within a country, showing the income distribution among a country's residents.

Question 19

A graphical technique that can be used to show the degree of inequality that exists between two variables is the:
A)lorenz curve
B)median-line bar graph
C)kuznets curve
D)semantic differential profile

Accepted Answer

The Lorenz curve is a graphical representation used to illustrate the distribution of income or wealth within a population, thereby showing the degree of inequality between individuals or groups. It plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The further the curve is from the line of equality, the greater the inequality.

Question 20

Which of the following explains the term economic growth?
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

Accepted Answer

Economic growth encompasses an increase in per capita production, an increase in per capita real income, and structural changes in the economy, making all the provided options correct.

Quiz 1: Understanding Economic Development and Growth: Exploring Indicators, Models, and Concepts

Economic development refers to

The Physical Quality of Life Index (PQLI) combines three indicators. They are

The Human Development Index (HDI) summarizes a great deal of social performance in asingle composite index, combining

As economic development proceeds, income inequality tends to follow a(n) __________ curve

The Harrod-Domar growth model suggests that growth is

Rostow's economic stages are

A value of 1 in Gini index represents

The Lorenz curve shows

Economic growth can be seen by an outward shift of:

The concept of economic growth is:

The rate of growth of an economy mainly depends upon:

The stationary state as envisaged by Adam Smith, is marked by:

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

With economic growth, the proportion of labour-force engaged in agriculture:

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

Identify the model which is concerned with the 'golden age' equilibrium:

India's First Five Year Plan was based on:

The Gini coefficient is a technique frequently used to show:

A graphical technique that can be used to show the degree of inequality that exists between two variables is the:

Which of the following explains the term economic growth?