Economic Development Quiz

A low-income country experiences extreme poverty in its rural areas. What is a possible cause of this?

• development of better irrigation techniques

• distribution of international food aid

• high trade barriers imposed by high-income countries

• higher prices for agricultural produce

Developing countries are sometimes given aid by charities and foreign governments. Which aid programme would be least likely to lead to long-term economic growth?

• the building of an irrigation system

• the construction of a new airport

• the distribution of gifts of food

• the training of technical staff

Which change is most likely to be expected when an economy is developing?

• birth rates increase rapidly

• poverty rates fall

• unemployment levels rise

• the primary sector overtakes the secondary sector

What describes absolute and relative poverty?

• Absolute poverty is a condition where household income is below a necessary level to maintain basic living standards, while relative poverty is when households receive 50% less than average household incomes.

• Absolute poverty is when people have less than $1.90 a day, while relative poverty is when people have less than $5.50 a day.

• Absolute poverty is a universal measure, while relative poverty varies from country to country.

• Absolute poverty is a temporary condition, while relative poverty is a permanent state.

Which of the following best describes the poverty cycle?

• A short-term rise in poverty caused by natural disasters

• The increase in poverty due to overpopulation

• The self-reinforcing pattern where poverty is passed down through generations

• A decrease in poverty during periods of economic growth

In countries with absolute poverty, low incomes can start a process that keeps incomes low. What are the stages of this process?

• low incomes ➔ low consumption ➔ low prices ➔ low output ➔ low incomes

• low incomes ➔ low government spending ➔ high taxation ➔ low employment ➔ low incomes

• low incomes ➔ low investment ➔ high profits ➔ low dividends ➔ low incomes

• low incomes ➔ low saving ➔ low investment ➔ low productivity ➔ low incomes

The table shows the percentage share of GDP held by the richest 20% and poorest 20% of the population in each country. Which country had the greatest extremes of income and poverty?

• Ghana

• Nigeria

• Senegal

• South Africa

Which characteristic will show that a country has significant absolute poverty?

• A majority of the population will have less than average income.

• Basic living needs are not being met.

• Most people do not have mobile phones.

• There is a high number of people living in rural areas.

What role does limited access to education play in the poverty cycle?

• Limited access to education is not a factor in the poverty cycle

• Limited access to education can help break the poverty cycle

• Limited access to education has no impact on the poverty cycle

• Limited access to education contributes to the poverty cycle.

What is the purpose of progressive taxation?

• An incentive for higher income individuals to work more and earn more income

• To generate tax revenue for the government from all income levels equally

• To redistribute wealth and reduce income inequality

• To encourage investment and savings among lower income individuals.