Economic Development Quiz

According to Todaro and Smith (2020), which combination best captures the multidimensional nature of economic development?

• Industrialization, foreign investment, and privatization

• Changes in social structures, acceleration of economic growth, and reduction of absolute poverty

• Liberalization, deregulation, and market expansion

• GDP growth, currency stabilization, and foreign exchange accumulation

Schaffner (2013) emphasizes the importance of structural transformation in economic development. Which of the following best illustrates structural transformation?

• A country increases its exports of raw materials

• Transition from agriculture-based employment to manufacturing and services

• Expansion of military spending in response to regional conflicts

• Government maintaining fixed exchange rates for a decade

Which critique is most applicable when using per capita income as a sole indicator of economic development?

• It overstates the importance of environmental sustainability

• It neglects distributional aspects and non-economic dimensions like health and education

• It underestimates foreign exchange reserves

• It fails to measure the size of a country's informal economy

The 17 Sustainable Development Goals (SDGs) emphasize a global partnership. Which of the following targets directly relates to both economic and social development dimensions?

• Targeting a 5% GDP growth rate

• Achieving full and productive employment and decent work for all

• Reducing trade tariffs globally

• Expanding foreign direct investment in extractive industries

Which of the following best explains Todaro & Smith's distinction between economic growth and development in terms of policy focus?

• Economic growth policies always lead to improved well-being

• Economic development requires qualitative improvements beyond quantitative economic metrics

• Economic growth is a necessary and sufficient condition for development

• Economic growth focuses exclusively on currency stabilization and inflation control

According to Schaffner (2013), which factor best explains the persistence of high poverty rates despite economic growth in developing countries?

• Global financial crises

• Inadequate attention to social institutions and distributional mechanisms

• Overemphasis on agricultural subsidies

• Persistent current account surpluses

Which of the following concepts highlights the importance of institutions in shaping development outcomes, as discussed by Perkins et al. (2013)?

• The Ricardian model of comparative advantage

• Institutional quality's role in ensuring fair market access and contract enforcement

• Purchasing power parity (PPP) adjustments in GDP calculations

• Absolute advantage in international trade

What key issue is raised in the development literature about the limitations of using GDP growth as a proxy for human well-being?

• It includes only government spending and excludes private investment

• It captures short-term volatility rather than long-term trends

• It may reflect increased output without corresponding improvements in health, education, or equality

• It is measured in local currency units, complicating international comparisons

Which of the following combinations best describes the characteristics of developing countries according to Todaro and Smith (2020)?

• High capital intensity, declining population growth, and low dependency ratios

• High dependency ratios, dualistic economies, and widespread poverty

• Full employment, income equality, and low inflation

• Trade surpluses, technological leadership, and high living standards

The 'two-gap model' mentioned in development studies is primarily concerned with:

• The productivity gap between rural and urban sectors

• The gaps in infrastructure and industrialization

• Savings and foreign-exchange constraints limiting investment and growth

• The difference between planned and actual government expenditures