exam 1 econ 333

_________________ attributes underdevelopment to faulty and inappropriate advice provided by well-meaning but often uninformed and biased international experts from developed-country assistance agencies and multinational donor agencies.

Correct!

False-Paradigm Model

Correct Answer

Dualistic-Development Thesis

False-Equivalence Theory

Foreign Dominance Model

Question 2

1 / 1 pts

HW#1_Table 1.pdf

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(See Table 1). The education index for Haiti is:

Correct!

0.428

Correct Answer

0.333

0.556

0.319

Question 3

1 / 1 pts

HW#1_Table 1.pdf

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(See Table 1). The life expectancy index for Haiti is:

0.487

Correct!

0.656

Correct Answer

0.256

0.219

Question 4

1 / 1 pts

HW#1_Table 1.pdf

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(See Table 1). The standard of living index for Haiti is:

Correct!

0.256

Correct Answer

0.333

0.556

0.319

Question 5

1 / 1 pts

HW#1_Table 1.pdf

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(See Table 1). Human Development Index (HDI) for Haiti is:

0.253

Correct!

0.416

Correct Answer

0.257

0.222

Question 6

1 / 1 pts

A closed economy is one in which assumes that there is:

no government spending

no international trade; i.e., no exports and imports

no government spending but with free trade

government spending but no international trade

Correct!

Both A and B

Correct Answer

Question 7

1 / 1 pts

According to the Lewis Two-Sector Model, the rate of growth (or speed of growth) of output and employment in the modern, industrialized sector of an underdeveloped economy is due, in part to:

unsurplus labor in the agricultural sector and marginal labor productivity in the agricultural sector

falling marginal productivity in the industrialized sector

Correct!

rate of industrial investment and capital accumulation

Correct Answer

rate of industrial investment and surplus labor

Question 8

1 / 1 pts

Autarky refers to:

Correct!

A closed economy that attempts to be completely self-reliant

Correct Answer

An open economy that attempts to be completely self-reliant

A closed economy that attempts to be completely dependent on other countries

An open economy that attempts to be completely dependent on other countries.

Question 9

1 / 1 pts

Economies with higher growth rates tend to be those that have:

large amounts of natural resources.

Correct!

a stable government that protects property rights.

Correct Answer

high levels of government regulation.

a large defense budget.

Question 10

1 / 1 pts

If a country's saving rate increases, then in the long run:

productivity is higher but real GDP per person is not higher.

real GDP per person is higher but productivity is not higher.

Correct!

productivity and real GDP per person are both higher.

Correct Answer

neither productivity nor real GDP per person is higher.

Question 11

1 / 1 pts

If Tanzanian policymakers decide to enact policies wherein the nations shifts from agrarian to manufacturing economy, then this an example of:

Surplus Labor

Manufacturing transformation

Correct!

Structural Transformation or Structural change

Correct Answer

All of the above.

Question 12

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One of the characteristics of the poor is that they are:

more likely to be employed in the modern industrial sector.

more likely to come from small families.

more likely to be well educated.

Correct!

more likely to live in a rural area.

Correct Answer

Question 13

1 / 1 pts

Suppose that Slovenia undertakes a policy to increase its saving rate. This policy will likely:

have no impact on GDP growth.

lead to higher GDP growth for a few years.

Correct!

lead to higher GDP growth for a period of several decades.

Correct Answer

lead to a permanently higher growth rate.

Question 14

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The association between poor economic performance – i.e., low schooling, insufficient infrastructure – and high ethnic and social divisions is known as:

Poverty trap

Correct!

Social fractionalization

Correct Answer

Middle-income trap

Absolute poverty

Question 15

1 / 1 pts

The Capabilities Approach places focus on:

Violence against land reform

Correct!

Freedom that a person has in terms of the choice of functionings given personal attributes and command over commodities

Correct Answer

unfreedoms to have the right to education

All of the above

Question 16

1 / 1 pts

The convergence hypothesis helps explain why:

highly educated people converge in high-income countries.

high-income individuals marry other high-income individuals.

high-income countries continue their high growth rates.

Correct!

the income of high-income and lower-income countries gets closer.

Correct Answer

Question 17

1 / 1 pts

The economic theory that attributes underdevelopment as a function of unequal and exploitative global capitalist system for rich-poor countries is called:

Undevelopment Thesis

Correct!

Neocolonial Dependence Model

Correct Answer

Globalization

Unfree capitalism

Question 18

1 / 1 pts

The gross domestic product (GDP) in a Fultonland in 2021 is $8 billion. The income received in 2021 by Fultonland residents from investment in Kingsland is $1 billion. The income received in 2021 by Kingsland residents from investments in Fultonland is $500 million. Using these above-mentioned figures, the gross national income (GNI) for Fultonland in 2021 is:

Correct!

$8.5 billion

Correct Answer

$8.6 billion

$8.41 billion

cannot be determined from the information given.

Question 19

1 / 1 pts

The main contributor to growth for developing countries is:

Correct!

capital accumulation.

Correct Answer

digital media productivity.

labor productivity.

political stability.

Question 20

1 / 1 pts

The Millennium Development Goals are international commitments by the countries to:

Reduce poverty and hunger

Reduce child mortality

Fight maternal health

Address special needs of least developed countries, in terms of tariffs and quotas

Correct!

All of the above

Correct Answer

Question 21

1 / 1 pts

The term human capital describes:

improvement made possible by better machines and the equipment available.

improvement in the technology available to the work force.

Correct!

improvement in a worker's skills made possible by education, training and knowledge.

Correct Answer

improvement in the robotics technology that can substitute for a human worker.

Question 22

1 / 1 pts

The underlying assumption of the Harrod-Domar growth model is that:

the incremental capital-output ratio is given by k = Y/K.

Correct!

growth is mainly determined by capital accumulation.

Correct Answer

growth can be sustained only if agricultural productivity rises.

developing countries save too much and invest too little.

Question 23

1 / 1 pts

Which is an example of a market failure?

There are not enough tickets available to concerts of extremely popular performers

The price of medical care has risen dramatically as a result of the introduction of sophisticated equipment and techniques

Correct!

Polio shots and chest x-rays provide both widespread benefits to the community as a whole and to the individuals who get them

Correct Answer

Extensive decreases in the prices of electronic equipment resulted in large numbers of bankruptcies in the computer industry

Question 24

1 / 1 pts

Which of the following is the best definition of GDP?

Correct!

the total dollar value of all final goods and services produced in the economy during a given year

Correct Answer

the total value of all basic goods and services produced in the economy during a given year

the total value of all primary, intermediate, and final goods and services produced in the economy during a given year

the total value of all goods and services produced and sold in the economy during a given year

Question 25

1 / 1 pts

If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation costs, the product's price should be the same in both markets. This is known as:

relative purchasing power parity.

interest rate parity.

Correct!

absolute purchasing power parity or the law of one price.

Correct Answer

equilibrium.

none of the above.

Question 1

1 / 1 pts

A situation in which the inability of agents to coordinate their choices or behaviors leads to an outcome or equilibrium that leaves all agents worse off than in an alternative situation that is also an equilibrium is called:

Binding Constraint

Economic Agent

Coordination Failure

Under-capped Development

Question 2

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Assume that the absolute poverty line is $120 in Pakistan. The total population of Pakistan is 194 million and the number of people in Pakistan whose incomes fall below the absolute poverty line is 102 million. The headcount ratio or headcount index of Pakistan is:

52.6%

190%

1.90%

.526%

Question 3

1 / 1 pts

Asymmetric information is when:

One party to a potential market transaction has more information than the other party

Both parties to a potential market transaction has equal information than the other

Both A and B

None of the above

Question 4

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Developing countries who have adopted capital-intensive technologies tend to have:

relatively higher Gini coefficients.

relatively lower Gini coefficients.

Gini coefficients equal to one.

Gini coefficients equal to zero.

Question 5

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If income were equally distributed among households, then:

each household's relative share of income would increase.

each household's relative share of income would decrease.

the top fifth of households would have 50 percent of the income.

50 percent of the households would receive exactly 50 percent of the income.

Question 6

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Kuznets inverted-U hypothesis:

implies that things must get worse before they get better.

suggests that inequality will worsen and then improve as a country grows.

suggests that inequality will improve and then worsen as a country grows.

points out six characteristics of modern economic growth.

Question 7

1 / 1 pts

Refer to Scenario I Scenario I.pdf

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. Assume that the absolute poverty line is $160 in Kenya. The number of people whose income falls below the absolute poverty line is:

10

6

7

5

Question 8

1 / 1 pts

Refer to Scenario I Scenario I.pdf

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. Assume that the absolute poverty line is $160 in Kenya. The total poverty gap for Kenya is:

$150

$200

$280

$500

Question 9

1 / 1 pts

Refer to Scenario I Scenario I.pdf

Actions

. Assume that the absolute poverty line is $160 in Kenya. Average income shortfall for Kenya is:

$50

$47.20

$46.67

$160

Question 10

1 / 1 pts

See Figure 1.1 Figure 1.1.pdf

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. The non-linear line below ab is the:

Lorenz curve.

line of equality.

line of poverty.

line of distribution.

Question 11

1 / 1 pts

See Figure 1.1 Figure 1.1.pdf

Actions

. The poorest 60 percent of households have what percent of the nation’s total income:

About 37 percent

About 60 percent

About 63 percent

Precisely 100 percent.

Question 12

1 / 1 pts

See Income Table-Brazil Income Table - Brazil.pdf

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. The Kuznets ratio for Brazil is:

1.33

1.69

1.43

2.56

Question 13

1 / 1 pts

The big-push theory argues that coordination failures may arise because of:

positive and negative externalities.

technological externalities.

lack of human capital.

all of the above.

Question 14

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The closer the Lorenz curve for income is to the line of equality,

the more equally incomes are distributed.

the larger is the nation’s total income.

the smaller is the nation’s total income.

the larger the fraction of the nation’s income received by the richest families.

Question 15

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The Gini coefficient provides a measure of:

the level of poverty.

the level of relative inequality.

disguised unemployment.

the rate of growth.

Question 16

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The idea that at very low income, low income leads to low investment (for example health care, human capital, roads, and physical capital goods), which in turn leads to low productivity and lack of economic progress is known as:

Poverty functionings

Capability Approach

Poverty Trap

Infrastructure Trap

Question 17

1 / 1 pts

The O-ring theory places emphasis on:

education of the labor force.

skill complementarities.

purchases of machinery and equipment by firms.

none of the above.

Question 18

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The S-curve is used to illustrate:

the typical path taken by the current account over time.

economic fluctuations in the economy.

the typical growth path of a developing economy.

the existence of multiple equilibria.

Question 19

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The total poverty gap is the:

absolute number of people below the international poverty line.

percentage of the population below the international poverty line.

private-sector resources (measured in dollars) necessary to bring everyone below the poverty line up to the poverty line.

total amount of income necessary to bring everyone in the country that is below the poverty line up to the poverty line.

Question 20

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When complementaries are present, then:

an action taken by one firm increases the incentives of other firms to take similar actions.

an action taken by one firm decreases the incentives of other firms to take similar actions.

All firms are limited by their actions.

Both A and C.

Question 21

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The severity of poverty index weights people in  ___________ more than people who are just below the poverty line.

extreme poverty.

absolute poverty.

relative poverty.

abject poverty.

Question 22

1 / 1 pts

Refer to Table 2.4. The mean or average of the ranked above data for a village in Peru is:

$245.44

$345.44

$123.44

$200.56

Question 23

1 / 1 pts

Refer to Table 2.4. Suppose that the covariance between the ranked income and the cumulative distribution of income is 33.24. The Gini coefficient for this village is approximately:

.212

.223

.271

.281

Question 24

1 / 1 pts

Why is inequality important from an economic standpoint?

Many people believe that it is unfair for all the benefits of economic growth to be concentrated among a select few in a society.

Some people in our society feel unhappy and deprived when a few have more goods and services.

Because inequality can affect efficiency and the structure of any economy in ways that disadvantage the poor, inequality can channel the benefits of growth away from the low socioeconomic classes.

All of the above.

Question 25

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The following income frequency distribution measured in percentiles compares inequality within Jamaica with different income levels.

Refer to Table 2.1. The poorest 10 percent of the Jamaican population gets approximately ____________   percent of the income.

3.7%

1.2%

0.2%

1.1%

Question 26

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Refer to Table 2.1. The poorest 30 percent of the Jamaican population gets approximately ____________   percent of the income.

7.2%

3.5%

3.2%

1.1%

Question 27

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Refer to Table 2.1. The richest 10 percent of the Jamaican population gets approximately ____________   percent of the income.

58.1%

16.2%

41.9%

11.3%

Question 28

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Refer to Table 2-3 above. Which country has the most equal income distribution?

Latvia.

Italy.

France.

Sweden.

Question 29

1 / 1 pts

Refer to Table 2-3. Which country has the most unequal income distribution?

Latvia.

Italy.

France.

Sweden.

Question 30

1 / 1 pts

The difference between poverty and inequality is that:

Poverty is more centered on individuals’ well-being relative to a set, defined line or measure of poverty.

Inequality is more concerned about individuals’ standard of living relative to other individuals’ within a society.

Both A and B.

Not enough information to determine correct answer.