Reference no: EM13854432

This homework is due at the beginning of class on October 8, 2015. Late submissions and submissions by email will not be accepted. Your homework must be typed and stapled, hand written submissions will not be graded.

Multiple Choice

(1) Which of the following is a major argument of trade pessimists?

(a) Increased productivity of developed country agriculture
(b) Increased efficiency in industrial use of raw materials
(c) Protectionism against labor-intensive manufacturers
(d) All of the above

(2) Most important role of the World Trade Organization is

(a) To promote market oriented economic policies
(b) To settle trade disputes
(c) To provide development assistance
(d) To help countries choose the appropriate level of a tariff or quota

(3) The S-curve is used to illustrate

(a) The typical path taken by the current account over time
(b) Economic fluctuations of the economy
(c) The typical growth path of a developing economy
(d) The existence of multiple equilibria

(4) Which of the following is a criticism of the neo-classical school's approach?

(a) Markets are not competitive in developing countries
(b) Externalities are common in developing countries
(c) Inequality may worsen when interventions are removed in developing countries
(d) All of the above

(5) The neo-classical school supports

(a) Trade restrictions
(b) State-owned enterprises
(c) Eliminating government regulations
d) Limitations on foreign investors

(6) A situation in which government intervention in the economy worsens the economic outcome is termed

(a) Neo-classical failure
(b) Socialism
(c) Government failure
(d) Dependency revolution

(7) The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as

(a) The marginal product of labor is less than the average product of labor in agriculture
(b) The marginal product of labor in agriculture is less than the marginal product of labor in industry
(c) There are diminishing returns to labor in agriculture
(d) The marginal product of labor in agriculture is zero

(8) Which of the following is an assumption of the Lewis two-sector model?

(a) Surplus labor in industry
(b) Positive marginal product of labor in agriculture
(c) An upward sloping labor supply curve in industry
(d) None of the above

(9) A newly industrialized country is

(a) The same as a high income country
(b) Any country that has experienced sustained growth in industry
(c) A special classification given to some upper-middle income countries that have achieved relatively advanced manufacturing sectors
(d) Any country that has moved out of lower income status

(10) The number of units of developing country currency required to purchase a basket of goods and services in a developing country that costs one dollar in the U.S. is given by

(a) GNP price deflator
(b) HDI ranking
(c) Purchasing power parity
(d) the exchange rate

(11) Most successful examples of modern economic growth have occurred in a country with

(a) A temperate-zone climate
(b) A market economy
(c) Exports of manufactured goods
(d) All of the above

(12) Which of the following is not an indicator that is used to compute the Human Development Index?

(a) Life expectancy at birth
(b) Real income per capita
(c) Infant mortality rate
(d) Years of schooling of adults

(13) Development economics is the study of the

(a) Alleviation of absolute poverty
(b) Transformation of institutions
(c) Allocation of resources in developing countries
(d) All of the above

(14) Which of the following is not an important objective of development?

(a) Increases in per capita income
(b) The expansion of available choices
(c) Increases in individual and national self-esteem
(d) All of the above are important objects of development

(15) What ideas are most closely associated with Nobel prize-winning economist Amartya Sen?

(a) The Linear Stages of Growth
(b) The Capabilities approach
(c) Coordination failure approach
(d) Role of increasing returns in economic development

Explain why a country's gains from trade may not accrue to nationals. Indicate the differential effects of GNP and GDP

Explain the basic idea behind the Big Push model?

What are the main indicators that make up the New Human Development Index?

Discuss the relationship between a developing country's emphasis on the export of traditional commodities and:

(1) Export earnings stability

(2) Comparative advantage

(3) Terms of trade

Apply what you have learned about development and development and development theories to speculate on the following thought experiment: What, if anything, might be different about today's international economic order if the Spanish had colonized North America and the English had col- onized South America?

Comment on the following statement: The level and growth rate of real GDP per capita can be a misleading indicator of development. At the same time, countries that experience sustained increases in real GDP per capita over time will tend to be more developed.