Exam Development Economics

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Multiple Choice questions (counts for 5/20)
1. The Millennium Development Goals include
a.
eliminating the proportion of people living on less than $1 per day.
b.
universal primary education.
c.
increasing exports by one half.
d.
all of the above.
2. One of the components of the human development index is
a.
the percentage of the population who are high school graduates.
b.
the average daily intake of protein.
c.
life expectancy at birth.
d.
the number of doctors per hundred people in the population.
3. Which of the following is an assumption of the Lewis two-sector model?
a.
surplus labor in the rural sector
b.
high unemployment in the urban modern sector
c.
rising real urban wages
d.
rising marginal product of labor in the rural sector
4. The underlying assumption of the Harrod-Domar growth model is that
a.
the incremental capital-output ratio is given by k Y/K.
b.
growth is mainly determined by capital accumulation.
c.
growth can be sustained only if agricultural productivity rises.
d.
developing countries save too much and invest too little.
5. The O-ring theory emphasizes
a.
Schooling of labour force
b.
Complementarities of skills
c.
Purchase of machinery by firms
d.
None of the above
6. Developing countries who have adopted capital intensive technologies tend to have
a.
relatively higher Gini coefficients.
b.
relatively lower Gini coefficients.
c.
Gini coefficients equal to one.
d.
Gini coefficients equal to zero.
7. The proportion of the total population aged 015 and over 65, is known as the
a.
dependency burden.
b.
unproductive population.
c.
surplus labor.
d.
population momentum.

8. Which of the following will cause the largest reduction in the birthrate?
a.
the population becomes less religious
b.
public healthcare improves
c.
education becomes more available
d.
an increase in the opportunity cost of a womans time
9. Other things constant, the elimination of factor price distortions in developing countries would
most likely
a.
decrease rural-urban migration.
b.
have little effect on rural-urban migration.
c.
increase rural-urban migration.
d.
increase urbanization.
10. Education of girls is a crucial development investment because
a.
it leads to improved child health.
b.
it leads to reduced fertility.
c.
women do most of the work in agriculture.
d.
all of the above.
11.Which of the following is not an indicator that is used by the World Bank in measuring the level
of economic development?
a.
life expectancy at birth.
b.
adult literacy rate.
c.
infant mortality rate.
d.
all of the above are not used by the World Bank.
12. If the expected private return of education is higher than the expected social return,
a. Then it is economically not efficient to provide education until the private demand is fulfilled
b. Then the intuition fees need to be increased
c. Then additional investments should be drawn to education
d. Then the market equilibrium wage shall be higher than the shadow price of labor
13. In stage II of the demographic transition,
a. the birth rate and the death rate are relatively low.
b. the birth rate and the death rate are relatively high.
c. the birth rate is relatively high and the death rate is relatively low.
d. the birth rate is relatively low and the death rate is relatively high.
14. The informal sector exhibits
a. free entry
b. labor intensive methods
c. small, competitive firms
d. all of the above
15. The ILO approach to combating child labor stresses
a. encouraging parents to migrate to the cities in search of work.
b. banning child labor.
c. tackling the sources of poverty.
d. all of the above.

FIVE MORE MULTIPLE CHOICE QUESTIONS IN TOTAL 20 QUESTIONS ON THE EXAM

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Theoretical questions (counts for 15/20)

Theoretical questions
1. According to the big push theory, multi-sectorial efforts are needed for countries to escape
a low level equilibrium trap. Explain.
2. O-ring theory

2. The high and rising population levels are explained by a demographic momentum, which is also a
result of high fertility levels that are in turn explained by decision making within the household.
a. Explain
b. How will social and economic development reduce fertility, and slow down population figures in
the long run?
Discussion question
3. Developing countries share a (high) number of very serious challenges, but on other
characteristics they differ. What are the implications for the design of development policies on
education and health? (tip elaborate your answer sufficiently)
or another example of a discussion question. Discuss the limitations some countries face to grow
faster. These limitations can be at different levels (internationally, nationally, locally). Are there
policy strategies that can be more successful according to you?

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