Issues and Topics in Economic Development (EC 390)
Section 1: Multiple choice. Select the choice that best answer
Of the following, which is the best measure of standard of living with
Nominal GDP per capita
Jeffrey Sachs would support which of the following policies?
Providing fertilizer to poor farmers.
Subsidizing bed nets to prevent malaria.
Making vaccines available at low or no cost.
All of the above.
overty is especially prevalent in
South and East Asia
Both a and c
For many development issues, Sub
Saharan Africa is the
. However, for
Development goals like providing acce
clean water _________
The Middle East
South and East Asia
Over the past 50 years, child mortality has
Increased in some areas but decreased in others.
A randomized experiment is one in which
Participants randomly receive the treatment (like getting a new type of fertilizer).
There is a natural experiment that does not require any human intervention.
ticipants receive the treatment if they meet certain income requirements.
The results are inconclusive (i.e. appearing random).
Suppose that Tylandia has a Gini coefficient of 1. This implies
There was a calculation error because the Gini coefficient
t be less than 1
There is perfect equality in Tylandia.
There is extreme inequality in Tylandia.
More information is needed. Gini coefficients are only useful for comparing
Suppose that an individual is considered below the poverty line if he/she makes less than
$1.25 a day. According to a head count measure of poverty if this person goes from
making $1.24 a day to $1.26, the head count measure will ____________ while poverty
Decrease; remain unchanged
Remain unchanged; increase
Where does inequality occur?
Only in the developing world.
Only in the developed world.
Mostly in Asia.
Throughout the world.
William Easterly, in
The Elusive Quest for Growth
, focuses on ___________ rather than
The existence of poverty traps
Providing ways to stop malaria to people in developing countries.
GDP Calculations (5
Using the tabl
answer the following questions:
Find U.S. GDP and Thai GDP in local currencies (do not worry about the
distinction between real and
What is Thai real GDP in U.S. dollars using the market exchange rate of 1 U.S.
dollar is worth 30 Thai baht?
Calculate Thai real GDP in U.S. dollars using the purchasing power parity method
What is the implied PPP exchange rate?
Inequality and Growth (5 points)
Discuss the main channel through which inequality may increase growth.
State, briefly, the four reasons why inequality may decrease growth.