Test Bank
to accompany
Economic Development
E.Wayne Nafziger
Ramesh Mohan
Test Bank to accompany
Economic Development
E. Wayne Nafziger and Ramesh Mohan
Copyright © 2005 E.Wayne Nafziger Economic Development
The contents or parts thereof, may be reproduced in print form solely for classroom use with ECONOMIC DEVELOPMENT provided such reproduction bears copyright notice, but may not be reproduced in any other form without prior written consent of E.Wayne Nafziger or Cambridge University Press, in any network or other electronic storage or transmission, or broadcast for distance learning.
Table of Contents
PART I PRINCIPLES AND CONCEPTS OF DEVELOPMENT
1. Introduction
2. The Meaning and Measurement of Economic Development
3. Economic Development in Historical Perspective
4. Characteristics and Institutions of Developing Countries
5. Theories of Economic Development
PART II POVERTY ALLEVIATION AND INCOME DISTRIBUTION
6. Poverty, Malnutrition, and Income Inequality
7. Rural Poverty and Agricultural Transformation
PART III FACTORS OF GROWTH
8. Population and Development
9. Employment, Migration, and Urbanization
10. Education, Health, and Human Capital
11. Capital Formation, Investment Choice, Information Technology,
and Technical Progress
12. Entrepreneurship, Organization, and Innovation
13. Natural Resources and the Environment: Toward Sustainable Development
PART IV THE MACROECONOMICS AND INTERNATIONAL
ECONOMICS OF DEVELOPMENT
14. Monetary, Fiscal, and Incomes Policy, and Inflation
15. Balance of Payments, Aid, and Foreign Investment
16. The External Debt and Financial Crises
17. International Trade
PART VI DEVELOPMENT STRATEGIES
18. Development Planning and Policymaking: the State, and the Market
19. Stabilization, Adjustment, Reform, and Privatization
Preface
This test bank is for classroom use with E. Wayne Nafziger, Economic Development, 4th edition, Cambridge University Press, 2006. These questions do not overlap with questions from Ramesh Mohan, Study Guide for Economic Development, available online at www.ksu.edu/economics/nafwayne/. Instructors who wish to reinforce student exercises from the workbook have the option of also using or modifying questions from the study guide.
The authors wish to thank Henry M. Hays, Jr. for permission to use questions from the Instructor’s Manual, 3rd edition.
E.W.N. & R.M.
© E. Wayne Nafziger Development Economics Cambridge University Press
Introduction
______
1. Which of the following is not true about the impact of globalization on India?
a. India’s information technology workers compete with many U.S. information technology
workers.
b. India’s rate of economic growth in the 1980s and 1990s was faster than in the 1950s and
1960s.
c. India’s software and related services exports exceed the U.S.’s software and related services
exports.
d. India’s top software services magnate ranks in the world’s top 500 in net worth.
e. India’s top 10 percent of income earners increased their income relative to the U.S. average
earners from 1980 to 2000.
Answer: C
2. Which of the following have been effects of globalization in recent decades in the United States?
a. U.S. corporations have increased their support for government health, education, and welfare
spending.
b. U.S. firms have hired Asians for services jobs previously done by Americans.
c. U.S. corporations have reduced their spending on inputs from affiliates overseas.
d. U.S. middle class income relative to Asian elites has increased.
e. All of the above are correct.
Answer: B
3. If you have an average income in the United States, you
a. are among the richest 90 percent but not the richest 60 percent of the world’s population.
b. are among the richest 50 percent but not the richest 25 percent of the world’s population.
c. are among the richest 10 percent of the world’s population.
d. have an income less than 40 percent of personal incomes in the world.
e. have an income less than 90 percent of personal incomes in the world.
Answer: C
4. What percentage of the world’s population lives in developing countries, that is, low-income and middle-income countries?
a. about three-fourths.
b. about one-third.
c. about one-sixth.
d. less than one-sixth.
Answer: A
5. Which of the following indicates achievements that India’s information and communications technology (ICT) industry has made since 2000?
a. an Indian software services magnate ranks in Forbes’ top 100 in net worth; ICT represents
more than 10 percent of India’s exports; India’s global ICT share is more than 10 percent; and
some Indian software firms have acquired US companies.
b. an Indian software services magnate ranks in Forbes’ top 100 in net worth; ICT represents
more than 2 percent of India’s GDP; ICT represents more than 10 percent of India’s exports;
and some Indian software firms have acquired US companies.
c. an Indian software services magnate ranks in Forbes’ top 100 in net worth; ICT represents
more than 2 percent of India’s GDP; India’s global ICT share is more than 10 percent; and
some Indian software firms have acquired US companies.
d. an Indian software services magnate ranks in Forbes’ top 100 in net worth; ICT represents
more than 10 percent of India’s exports; India’s global ICT share is more than 10 percent; and
some Indian software firms have acquired US companies.
e. ICT represents more than 2 percent of India’s GDP; ICT represents more than 10 percent of
India’s exports; India’s global ICT share is more than 10 percent; and some Indian software
firms have acquired US companies.
Answer: C [a, c, d and e are incorrect because India’s global ICT share in 2001 was just over 1 percent, not more than 10 percent.]
6. How did the median (50th percentile) income of developing-country regions change relative to the median income of the United States from 1960 to 2000?
a. The median of developing countries in general fell relative to the US, but with Asia’a median
increasing and sub-Saharan Africa’s median falling.
b. The median of developing countries in general fell relative to the US, but with sub-Saharan
Africa’s median increasing and Asia’s median falling.
c. The median of developing countries in general increased relative to the US, but with sub-
Saharan Africa’s median increasing and Asia’s median falling.
d. The median of developing countries in general increased relative to the US, but with Asia’a
median increasing and sub-Saharan Africa’s median falling.
e. The median of developing countries in general stayed about the same relative to the US,
Answer: D
7. What has been the effect of globalization on the real incomes of the North American (US and Canadian) middle classes and the real incomes of Asian elites since 1980?
a. Real incomes of both North American middle classes and Asian elites have increased, but Asia elites’ incomes have increased at a faster rate.
b. Real incomes of both North American middle classes and Asian elites have fallen.
c. Real incomes of both North American middle classes and Asian elites have increased at about
the same rate.
d. Real incomes of both North American middle classes and Asian elites have increased, but
North American middle classes’ incomes have increased at a faster rate.
e. Real incomes of both North American middle classes and Asian elites have stayed the same.
Answer: A
8. Assume that the attitudes of university graduates toward globalization is more favorable the faster the growth of their real incomes relative to those of their parents’ generation. Which alternative best indicates the attitudes of different world regions’ university graduates toward globalization in 2000?
a. East Asia’s university graduates would be more favorable and the United States’ university
graduates less favorable toward globalization.
b. Latin America’s university graduates would be more favorable and East Asia’s university
graduates less favorable toward globalization.
c. Sub-Saharan Africa’s university graduates would be more favorable and East Asia’s university
graduates less favorable toward globalization.
d. Sub-Saharan Africa’s university graduates would be more favorable and the United States’
university graduates less favorable toward globalization.
e. The United States’ university graduates would be more favorable and East Asia’s university
graduates less favorable toward globalization.
Answer: A
9. Former socialist countries that are currently undergoing economic transition include
I Russia.
II Ukraine.
III Poland.
IV Czech Republic.
a. I and II only.
b. II and III only.
c. I, II and III only.
d. I, II, III and IV.
Answer: D
10. Which of the following is the view of Dudley Seers?
a. It is necessary to unlearn some of standard economics to adapt to the developing world.
b. Principles of economics is accurately based on developing countries rather on the United
States.
c. The best preparation for analyzing developing countries is excellent grounding in economic
theory.
d. Both a and b.
e. None of the above is correct.
Answer: D
The Meaning and Measurement
of Economic Development
______
1. Which of the following was not a Millennium Development Goal?
a. Achieving universal primary education
b. Halting spread of malaria.
c. Promoting gender equality
d. Protecting property rights.
e. Reducing child mortality.
Answer: D
2. Among those listed, which country had the fastest real (PPP$) growth of GDP per capita from 1870 to 1998?
a. Argentina.
b. Australia.
c. Russia.
d. Spain.
e. United Kingdom.
Answer: D
3. GNI per capita measured at PPP exceeds nominal GNP per capita in
a. Denmark.
b. India.
c. Japan.
d. Norway.
e. all of the above.
Answer: B
4. For Nobel laureate Amartya Sen, the ultimate goal of economic life is
a. accumulation.
b. development.
c. freedom.
d. wealth.
e. None of the above is correct.
Answer: C
5. Which of the following are Millennium Development Goals?
a. halting the spread of HIV/AIDS, protecting national production, reducing poverty rates, and
reducing the debt burden of developing countries.
b. halting the spread of HIV/AIDS, protecting national production, reducing poverty rates, and
reducing the proportion of people without access to safe drinking water.
c. halting the spread of HIV/AIDS, protecting national production, reducing the debt burden of
developing countries, and reducing the proportion of people without access to safe drinking
water.
d. halting the spread of HIV/AIDS, reducing poverty rates, reducing the debt burden of
developing countries, and reducing the proportion of people without access to safe drinking
water.
e. protecting national production, reducing poverty rates, reducing the debt burden of developing
countries, and reducing the proportion of people without access to safe drinking water.
Answer: D
6. The highest ratio of GNI per capita measured at PPP to nominal GNI per capita is in
a. India.
b. Israel.
c. Norway.
d. Singapore.
e. the United States.
Answer: A
7. The components of the human development index (HDI) include
a. child mortality.
b. economic growth.
c. education.
d. food security.
e. price stability.
Answer: C
8. Economic growth refers to
a. reduction in inequality.
b. increases in output per person.
c. the fulfillment of basic needs.
d. rapid technological change.
e. None of the above is correct.
Answer: B
9. GNP per capita measured at PPP exceeds nominal GNP per capita in
a. Denmark.
b. developing Asia.
c. Japan.
d. Sweden.
e. all of the above.
Answer: B
10. The components of the human development index (HDI) include
a. economic growth.
b. food production per capita.
c. infant mortality.
d. literacy rate.
e. Paasche price index.
Answer: D
11. Which of the following is a major source of distortion in comparing nominal GNP figures for developed and developing countries?
a. GNP is overstated for developing countries, since many of their cheap, labor-intensive goods
have no impact on the exchange rate.
b. GNP is overstated for developing countries, which spend a higher portion of income on
intermediate goods that are costs of guarding income.
c. GNP is understated for developing countries, since a greater proportion of their goods and services are produced within the home or village.
d. GNP is understated for developing countries, where the price of foreign exchange is less than
a market-clearing price.
e. none of the above.
Answer: C
12. “Development as freedom,” in the view of Nobel-prize winner Amartya Sen, refers to
a. the capacity for choice among improved economic goods.
b. the freedom to use your resources in whatever way that you wish.
c. the maximization of economic growth.
d. Mao Zedong’s concept of the liberated communist man and woman.
e. None of the above is correct.
Answer: A
13. Mahatma Gandhi was an early advocate of
a. assembly-line production.
b. centralized planning.
c. machines to build machines.
d. state-owned enterprises.
e. village handicraft production.
Answer: E
14. The Physical Quality of Life Index consists of the following variables:
a. infant mortality, life expectancy, and literacy.
b. infant mortality, life expectancy, and PPP GDP per capita.
c. infant mortality, literacy, and PPP GDP per capita.
d. life expectancy, literacy, and PPP GDP per capita.
e. None of the above is correct.
Answer: A
15. The sector that most resists comparisons between one country’s economy and another
country’s economy is
a. automobiles.
b. food processing.
c. health and education.
d. iron and steel.
e. textiles.
Answer: C
16. GDP at PPP is derived by
a. converting a country’s GDP by using a PPP exchange rate.
b. finding the price of several hundred goods and services in each benchmark country.
c. making quality adjustments to substitute for an item directly observable.
d. using a series of simultaneous equations to solve PPP for numerous countries.
e. All of the above are correct.
Answer: E
17. Which of the following is a major source of distortion in comparing nominal GNP figures for
developed and developing countries?
a. GNP is overstated for developing countries, since a greater proportion of their goods and
services are produced within the home or village.
b. GNP is overstated for developing countries, which spend a higher portion of income on
intermediate goods that are costs of guarding income.
c. GNP is understated for developing countries, since many of their cheap, labor- intensive
goods have no impact on the exchange rate.
d. GNP is understated for developing countries, where the price of foreign exchange is less than