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Development Economics IIA

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Universität Development Economics Quiz on Development Economics IIA, created by Chanté on 04/12/2014.
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Quiz by Chanté, updated more than 1 year ago
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Created by Chanté almost 10 years ago
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Question 1

Question
Which of the following would be an appropriate alternative to this Development Economics IIa as a name for this course?
Answer
  • Industrialisation and development: Strategies and experience
  • Development economics: The Neoclassical Approach
  • Open Economy development economics
  • Developing countries in the international economy
  • Development, Accumulation and Structural Change

Question 2

Question
Who wrote the textbook for the course and what kind of economist is he
Answer
  • Weaver - Kaleckian
  • Thirdwood - Keynesian
  • Thirllwarld - Supply-sider
  • Thirlwall - Kaldorian
  • Furball - Neoclassical

Question 3

Question
Using the figures from our lecture (lecture 1), roughly speaking, what is the average percent of the workforce in the low income countries working in each of the following sectors? Agric. - Indus. - Services
Answer
  • 5 - 15 - 80
  • 33 - 33 - 34
  • 80 - 15 - 5
  • 75 - 10 - 15
  • 61 - 19 - 21

Question 4

Question
At what level of employment does the diminishing marginal product of labour start?
Image:
Untitled (image/png)
Answer
  • LA
  • LB
  • LC
  • LD
  • LE

Question 5

Question
Which of the following has NOT been argued in the lectures
Answer
  • Agriculture is characterised by diminishing returns to labour
  • The income elasticity of demand for agricultural output is relatively low
  • As income rises (and productivity rises) the relative importance of agriculture in purchases will increase
  • Industry is an increasing returns activity
  • The income elasticity of demand for industry’s output is relatively high

Question 6

Question
Using our standard growth formula assume we have a population growth of 2% per year and our incremental capital output ratio is 5. What level of savings would be required to give us a constant GDP per capita if the annual GDP was £150 billion. (Assuming all the savings are invested)
Answer
  • 5%
  • 15%
  • £15 billion
  • £150 billion
  • There is insufficient information

Question 7

Question
Lack of access to basic sanitation and primary health care low income countries contributes to high infant mortality. On average and approximately, how many deaths are there per 1000 live births?
Answer
  • 1
  • 10
  • 60
  • 300
  • 600

Question 8

Question
How might this “Kuznets curve” be best labelled?
Image:
Untitled (image/png)
Answer
  • A=High Growth B=Low Growth C=Low Industrialisation D=High Industrialisation
  • A=Low Gini B=High Gini C= High Level of Development D=Low Level of Development
  • A=High Gini B=Low Gini C= Low Level of Development D=High Level of Development
  • A=High Growth B=Low Growth C= Low Level of Development D=High Level of Development
  • None of the above

Question 9

Question
Who defines undernourishment as: “a state in which physical functioning of a person is impaired to the point where she cannot maintain an adequate level of performance at physical work, or at resisting or recovering from the effects of any of a garden variety of diseases”?
Answer
  • Kuznets, S (1955) Economic Growth and Income Inequality
  • Malthus, T (1798) Essay on the Principle of Population
  • Dasgupta, Partha (1993) An Inquiry into Well-being and Destitution
  • Galbraith, J.K. (1962) Economic Development in Perspective
  • Sen, A (1984) Poverty and Famines: An Essay in Entitlement and Deprivation

Question 10

Question
What it is the missing word in the following famous quote? “The country that is more developed _________ only shows, to the less developed, the image of its own future.”
Answer
  • Agriculturally
  • Culturally
  • Financially
  • Industrially
  • Economically

Question 11

Question
Which of these did NOT explicitly advance a “stage” theory of development?
Answer
  • Smith
  • Clark
  • Marx
  • Fisher
  • Verdoorn

Question 12

Question
Which of the following is not one of Rostow’s stages?
Answer
  • Traditional
  • Take-off
  • Transitional
  • Maturity
  • Pre-maturity

Question 13

Question
Which of Rostow’s stages might be best described as involving a shift to “self sustaining growth”, the emergence of “leading sectors”, an expansion of the market for output, an increase in the supply of capital, a channelling of agriculture’s surplus (via the state or private sector) to industry, the growth of self-finance by businesses, the spread of new production techniques (production functions) and the beginning of a secondary expansion?
Answer
  • Traditional
  • Transitional
  • Take-off
  • Pre-maturity
  • Maturity

Question 14

Question
Which of the following was not one of Kaldor’s growth laws (as described in the lecture)? NOTE: m - manufacturing; nm - non-manufacturing; p - productivity; g - growth
Answer
  • gGDP = f(gm) f’ >0
  • pm = f(gm) f’ >0
  • gm = f (ggdp) f’ >0
  • pnm= f(gm) f’ >0
  • Verdoorn’s Law

Question 15

Question
Which of the following best describes Allyn Young’s (1928) “increasing returns” ?
Answer
  • a microeconomic phenomenon involving the returns gained at the enterprise level by an expansion in output
  • a sectoral level phenomenon involving the returns gained where by, for example agricultural, productivity will increase as a result of a reduction in the sector’s size
  • a macroeconomic phenomenon involving the interaction between activities in the process of general economic expansion
  • An echo of Smith’s worries about the dangers of over specialisation of labour
  • A myth. Young believed in constant returns

Question 16

Question
Which of the following most closely corresponds to Fisher (1939) and Clark (1940) stages?
Answer
  • Traditional – Transitional - Take-off –Maturity – Age of High mass consumption
  • Hunting and gathering – Shepherding – Agriculture - Commercial Society
  • The sequential dominance of primary production, then secondary production followed by tertiary production
  • Primitive Communism – Slavery – Feudalism – Capitalism – Socialism –Communism
  • The sequential dominance of the Nobility, then Entrepreneurs, then Technocrats

Question 17

Question
Which author or authors’ “stage theory” has the income elasticity of demand and changes in income elasticity of demand as the major driver of shifts between stages?
Answer
  • Smith
  • Rostow
  • Marx
  • Fisher and Clark
  • Kaldor

Question 18

Question
This is the result of a regression estimating “Verdoorn’s Law” in China pm = -9.46E-05 + 0.71(gm) (-0.02) (19.10) R^2=0.73 How might we best interpret this result?
Answer
  • Productivity increases are causing growth in manufacturing
  • The R^2 of 0.73 and the coefficient on manufacturing sector growth 0.71 are sufficiently similar to counterbalance the negative coefficient on the intercept
  • A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in that sector’s productivity. But the low R2 and the negative t stat on intercept coefficient render the result meaningless
  • A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in the growth of that sector’s productivity
  • Productivity and growth are not related to each other as the t-statistic on the growth coefficient (19.10) is too low

Question 19

Question
Which of the following is a “correct” reference for a book by Alice Amsden?
Answer
  • Amsden, Alice (1929) Asia’s Next Giant: South Korea and Early Industrialisation
  • Amsden, Alice (1959) Asia’s Giants: South Korean and Japanese Industrialisation
  • Amsden, Alice (1979) Asia’s Last Giant: Japan and Late Industrialisation
  • Amsden, Alice (1989) Asia’s Next Giant: South Korea and Late Industrialisation
  • Amsden, Alice (1999) Asia’s Next Giant: North Korea and Early Industrialisation

Question 20

Question
Suppose a country’s population is growing at 3% per year and the ICOR is 4. Using the “standard” formula what savings rate would be needed to ensure a constant level of GDP/capita?
Answer
  • 12%
  • 4%
  • 3%
  • 0.75
  • There is insufficient information

Question 21

Question
Which of the following is least likely to be assumed by traditional development economists?
Answer
  • As income and productivity rise the relative importance of agriculture in purchases will increase
  • Agriculture is characterised by diminishing returns to labour
  • The income elasticity of demand for agricultural output is relatively low
  • Industry is an increasing returns activity
  • The income elasticity of demand for industry’s output is relatively high

Question 22

Question
How might this “Kuznets curve” be best labelled?
Image:
Untitled (image/png)
Answer
  • A=High Growth B=Low Growth C=Low Industrialisation D=High Industrialisation
  • A=High Growth B=Low Growth C= Low Level of Development D=High Level of Development
  • A=High Gini B=Low Gini C= Low Level of Development D=High Level of Development
  • A=Low Gini B=High Gini C= High Level of Development D=Low Level of Development
  • None of the above

Question 23

Question
Which of these is NOT a Classical Economist and/or did NOT write the Book on the date implied
Answer
  • Karl Marx (1867) Capital: A Critique of Political Economy
  • David Ricardo (1817) Principles of Political Economy and Taxation
  • Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations
  • Thomas Malthus (1798) Essay on the Principle of Population
  • W. W. Rostow (1805) The Stages of Economic Growth

Question 24

Question
In the lecture (L4) it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?
Answer
  • The encouragement of invention of “machines which facilitate and abridge labour, and enable one man to do the work of many”
  • The Pin Factory example
  • Learning by doing increasing the “dexterity of every particular workman”
  • The saving of time “passing from one species of work to another”
  • Smith’s arguments with Malthus about the role of trade

Question 25

Question
Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?
Answer
  • Ricardo’s Law
  • Smith’s Law
  • Marx’s Law
  • Verdoorn’s Law
  • Say’s Law

Question 26

Question
Which of the following is NOT true about Ricardo?
Answer
  • He was an industrialist, politician and economist
  • He argued that UK should specialise in agricultural produce, including corn and beef, because of its absolute advantage in producing these
  • He campaigned for repeal the “Corn Laws” in England which had been protecting UK agriculture
  • He predicted that capitalist economies would end up in stationary state with no accumulation and therefore no growth
  • He argued that diminishing returns in agriculture would lead to higher food prices

Question 27

Question
Where variable capital = v constant capital =c profits = s A Marxist economist would NOT normally use which of the following definitions
Answer
  • Total output=v+c+s
  • Degree of exploitation = s/v
  • Organic composition of capital = c/v
  • The rate of profit = (s/v)/(1+[c/v])
  • Growth = s/c

Question 28

Question
Thirlwall Ch5 Theories of Economic Growth argues: "An attempt is made to illustrate the contemporary relevance of the theories discussed. … the wheel has turned full circle, and … the most recent theories of endogenous growth rehabilitate many of the ideas of the old classical economists particularly _________ __________ emphasis on increasing returns associated with investment in manufacturing industry, and the general emphasis in both classical and __________ theory on the role of capital accumulation, and the embodiment of various forms of technical progress associated with it.” What are the missing words?
Answer
  • Thomas Malthus’s AND Ricardian
  • David Ricardo’s AND Neoclassical
  • Adam Smith’s AND Keynesian
  • Karl Marx’s AND Neo-Keynesian
  • Joseph Schumpeter’s AND evolutionary

Question 29

Question
Which of these is NOT a Classical Economist and/or did NOT write the Book on the date implied
Answer
  • Karl Marx (1867) Capital: A Critique of Political Economy
  • Nicholas Kaldor (1805) The Stages of Economic Growth
  • David Ricardo (1817) Principles of Political Economy and Taxation
  • Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations
  • Thomas Malthus (1798) Essay on the Principle of Population

Question 30

Question
Suppose a country’s population is growing at 3% per year and the ICOR is 4. Using the “standard” formula what savings rate would be needed to ensure a constant level of GDP/capita?
Answer
  • 24%
  • 12%
  • 4%
  • 0.75
  • There is insufficient information

Question 31

Question
In the lecture on the Classical Economists it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?
Answer
  • The encouragement of invention of “machines which facilitate and abridge labour, and enable one man to do the work of many”
  • Smith’s discussions with Marx about the role of exploitation
  • The Pin Factory example
  • Learning by doing increasing the “dexterity of every particular workman”
  • The saving of time “passing from one species of work to another”

Question 32

Question
Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?
Answer
  • Ricardo’s Law
  • Say’s Law
  • Smith’s Law
  • Marx’s Law
  • Verdoorn’s Law

Question 33

Question
Which of the following is not one of Harrod’s questions?
Answer
  • What must be the DY/Y for Ip to equal Sp (i.e. for a “dynamic equilibrium”?)
  • Will a dynamic equilibrium between Ip and Sp tend to prevail?
  • Is any dynamic equilibrium between Ip and Sp stable?
  • Will the growth rate be such that labour and capital will tend to be fully employed?
  • What is the optimal level of growth to ensure the maximisation of the sum individuals in the society’s welfare?

Question 34

Question
Assuming there is a problem with the warranted growth rate being less than the natural growth rate. Which of the following was NOT suggested as a possible solution?
Answer
  • reduce the population growth rate
  • raise the savings rate using fiscal policy
  • raise the savings rate using monetary policy
  • reduce the amount of capital needed per unit of output
  • encourage more of the population to work

Question 35

Question
Joan Robinson used which phrase to describe the situation where ga=gw=gn
Answer
  • The perfect equilibrium
  • The growth “norm”
  • A “golden age”
  • The desired optimum
  • A “happy medium”

Question 36

Question
Who in 1946 published an article in Econometrica outlining a model very similar in insights to Roy Harrod’s 1939 model?
Answer
  • E. Dorar
  • E. Domar
  • E. Domer
  • E. Dormer
  • E. Dobar

Question 37

Question
This is a Cobb-Douglas Production function in “extensive” form Y = bK^(a)*L^(1-a) Which of the following is not true?
Answer
  • Y is output
  • b is some measure of technology
  • a = elasticity of output with respect to the capital stock
  • 1-a = elasticity of output with respect to the labour force
  • a+ (1-a) = 1 =>increasing returns to scale

Question 38

Question
If you were writing an essay on the major features of "stages of growth" theories who would you be least likely to mention as one of the stage theorists?
Answer
  • Kaldor
  • Rostow
  • Fisher and Clark
  • Marx
  • Smith

Question 39

Question
In a standard Cobb-Douglas Production function (Y=TKaLb) which of the following is NOT true?
Answer
  • a+b=1 implies constant returns to scale
  • a+b<1 implies decreasing returns to scale
  • a+b>1 implies increasing returns to scale
  • 0<a<1 and 0<b<1 reflects diminishing returns to the factors
  • a and b are often assigned the values 0.6 and 0.8 to reflect their respective shares in national income

Question 40

Question
Taking logs of a standard Cobb-Douglas Production function (Y=TKaLb) differentiating with respect to time and using a discrete approximation we get the following functional form: rY=rT+a rK+b rL When using this to model an economy which of the following would NOT be a good description of rT ?
Answer
  • The annual rate of growth of “total productivity”
  • That part of growth of output not attributable to increases in factors of production
  • A “coefficient of ignorance”
  • “Advances in knowledge”
  • An accurate measure of the economies degree of technical progress

Question 41

Question
Thirlwall discusses the possible contributions of the agricultural sector to the process of development under four headings. Which is not one of them?
Answer
  • Product contribution
  • Factor contribution
  • Market contribution
  • Foreign exchange contribution
  • Environmental contribution

Question 42

Question
Who was the father of the 1960s Green Revolution and was awarded the Nobel Peace Prize in 1970 in recognition of his contributions to world peace through increasing food supply
Answer
  • W. A. Lewis
  • Norman Borlaug
  • Nicholas Kaldor
  • Tony Thirlwall
  • Thomas Malthus

Question 43

Question
Complete the following quote from Lewis. “The central problem in the theory of economic development is to understand the process by which a community which was previously
Answer
  • saving and investing 4 or 5 per cent of its national income or less, converts itself into an economy where voluntary saving is running at about 12 to 15 per cent. of national income or more.”
  • corrupt, converts itself into a democracy.”
  • industrialised, converts itself into a post industrial society.”
  • saving 15-20 per cent of its national income, converts itself into an economy where voluntary saving is running at about 50 per cent. of national income or more.”
  • investing nothing, converts itself into an economy where voluntary saving is running at about 10 per cent. of national income.”

Question 44

Question
What is Lewis’s answer to the question "why do [poor countries] save so little”? Because
Answer
  • they are poor
  • their government are too corrupt
  • their taxes are too high
  • their capitalist sector is small
  • they lack a sufficiently developed financial sector

Question 45

Question
In Lewis’s model earnings in the subsistence sector set a floor to wages in the capitalist sector but in practice wages in the capitalist sector have to be higher than this. That is, there is a “gap”. Which is the figure closest to Lewis’s estimate of the typical size of this gap?
Answer
  • 10 %
  • 15 %
  • 20 %
  • 30 %
  • 50%

Question 46

Question
Which of these is not one of Lewis’s description or explanation of the gap?
Answer
  • The gap is nominal not real in that it merely reflects the higher cost of living in capitalist sector
  • Reflecting a psychological cost. The cost of moving from an easy going way of life in the subsistence sector to the more regimented and urbanised environment of the capitalist sector
  • Reflecting unskilled workers being of more use to the capitalist sector after they have been there for some time than is the raw recruit from the country
  • Because of the need for urban workers to send money home to the countryside
  • Reflecting a difference in conventional standards as a result of acquiring tastes and a social prestige which conventionally are recognised by higher real wages

Question 47

Question
According to Google Scholar how many times, approximately, has Lewis, W.A. (1954) Economic development with unlimited supplies of labour. The Manchester School, 22(2), 139-191. been cited?
Answer
  • 0
  • 8
  • 80
  • 800
  • 8000
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