UNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS UNISA Toes ECS207G Mayiune 2012 Met/dune 2012 DEVELOPMENT ECONOMICS ONTWIKKELINGSEKONOMIE Duraton 2 Hous 400 Marks Tydscuur 2 Uur 00 Punte EXAMINERS / EKSAMINATORE FIRST / EERSTE. MRS/MEV R LOTTER SECOND/TWEEDE __ PROF AG OOSTHUIZEN Use of a non-programmable pocket calculator 1s permissible Gebruik van ‘n nie-programmeerbare sakrekenaar 1s toelaatbaar This examination question paper remains the property of the University of South Africa and may not be removed from the examination venue. Hierdie eksamenvraestel bly die etendom van die Uni ‘en mag nie ult die eksamentokaal verwyder word mie rsitert van Suid-Afrika This paper consists of 24 pages including 2 pages for rough work (pp 23 to 24) plus the special front page Hierdie vraestel bestaan uit 24 bladsye insluitende 2 bladsye wir rofwerk (pp 23 tot 24) plus die spesiale voorblad STUDENT NUMBER / STUDENTENOMMER INSTRUCTIONS: 1 Please write legibly We cannot mark what we can't read 2 DoNOT use a red pen or a pencil to answer questions INSTRUKSIES- 1 Skryf asb leesbaar Ons kan nie merk wat ons nie kan lees nie 2 MOENIE met 'n roo! pen of ‘n potlood die vrae beantwoord nie [TURN OVER] IBLAAI OM]2 £CS207G 05/08 2012 ‘THE PAPER CONSISTS OF SECTION A AND SECTION B SECTION AIS COMPULSORY AND REPRESENTS 40 MARKS ANSWER ALL QUESTIONS FROM SECTIONA CHOOSE ANY 3 QUESTIONS FROM SECTION B_ SECTION B REPRESENTS 60 MARKS. DIE VRAESTEL BESTAAN UIT AFDELINGS A EN B AEDELING AIS VERPLIGTEND EN VERTEENWOORDIG 40 PUNTE BEANTWOORD ALLE VRAE IN AEDELING A KIES ENIGE DRIE VRAE IN AFDELING B_AFDELING B VERTEENWOORDIG 60 PUNTE. ‘SECTION A: COMPULSORY AFDELING A: VERPLIGTEND ‘At In terms of the new interpretation of the concept ‘development’, which three core values represent common goals sought by all individuals and societies? Identify and explain Volgens die nuwe interpretasie van die konsep ‘ontwikkeling’, watter die kernwaardes verteenwoordig die gemeenskaplike doelwitte wat deur alle individue en samelewings nagestreef word? Identifiseer en verduidelik @) A2_ The UNDP uses the Human Development Index (HDI) to determine countries’ level of development Explain how countries are ranked in terms of the HOI, as well as the indicators used to determine these rankings Die UNDP gebruik die Mensiike Ontwikkelingsindeks (HDI) om lande se viak van ontwikkeling te bepaal Verduidelik die rangordes waarin lande geplaas word volgens HDI, sowel as die aanwysers wat gebruik word om hierdie rangordes te bepaal (12) ‘A3__ Briefly explain or describe the following concepts Bespreek of omskryf kortiks die volgende begrippe (20) 21 Population poverty cycle Bevolkings-armoede-siklus 32 Educational gender gap Onderwys geslagsgaping 33. Relate poverty Relatiewe armoede 3.4 Life expectancy at birth Lewensverwagting met geboorte [TURN OVER} IBLAAI OM]3 Ecs207G 05/06 2012 35 New protectionism Nuwe beskermingsmeganismes 36 Overvalued exchange rate Oorgewaardeerde wisselkoers 37 Absorptive capacity in terms of aid Absorberingskapasitett mn terme van hulp 38° Transfer pnoing Cordragprysing 39 Institutional weakness Insttusionele swakheid 310 Corruption Korrupsie ‘SECTION B: ANSWER ANY 3 QUESTIONS | _-AFDELING B: BEANTWOORD ENIGE 3 VRAE QUESTION BI/VRAAG B1 11 Discuss and evaluate the Lewis Theory of Development Bespreek en evalueer Lewis se Teone van Ontwikkeling ®) 12 Give a comprehensive description and evaluation of the theory on structural change and patterns of development Gee 'n omvattende verduidelking en evaluasie van die teore oor strukturele verandering en patrone van ontwikkeling ©) 13. Bnefly discuss and evaluate the traditional neoclassical growth theory Bespreek en evalueer kortiks die tradisionele neo-klassieke groe! teone ©) [TURN OVER] [BLAAI OM]QUESTION BZ/VRAAG B2 21 The following income distribution data are for Mexico Die volgende inkomste verdelingsdata is van Mexico Quinte / Kwantel Percentage share / Persentasie aandeel Lowest / Laagste 20% 2.4% Second quintile /tweede kwantel | 5.7% Third quintile / derde kwanbel 10,7% Fourth quintile / Vierde kwantel 18.6% Highest / Hoogste 20% 62.6% Highest / Hoogste 10% 48.2% a Draw the Lorenz curve for Mexico, labeling the axes Teken die Lozenz kromme wir Mexico en benoem die asse b Explain how to find the Gin coefficient, graphically. Verduidelik hoe die Gini koeffisient grafies bereken word Ecs207G 05/06 2012 6) @) ¢ — Mexico's national income 1s about $300 billion What 1s the approximate dollar income of the bottom 20 percent and bottom 40 percent? Mexico se nasionale inkomste 1s ongeveer $300 mijard Wat 1s die geskatte dollar waarde van die laagste 20% en 40% van die bevolking (2) Mexico population 1s approximately 150 milion Suppose that each household makes the average income for its quintile What 1s the poverty gap and what 1s the level of poverty ifthe poverty line 1s $400 per capita? Mexico's se bevolking 1s ongeveer 150 miljoen Veronderstel elke huishouding verdien die gemiddelde inkomste vir sy kwantiel Bereken die armoedelokval en verduidelik wat die viak van armoede is as die armoedelyn $400 per capita 1s @ [TURN OVER] [BLAAI OM]5 Ecs2076 05/06 2012 Suppose one percent of national mcome were transferred from the richest 20 percent of households to the poorest 20 percent of households Show the effect on relative inequality on the Lorenz curve Veronderstel 1% van nasionale inkomste word corgedra vanaf die rykste 20% van die huishoudings na die armste 20% van die huishoudings Dui aan water effek dit op relatiewe ongelykheid sal hé in terme van die Lorenz kromme a) f Under the same transfer, what is the effect on poverty? Wat is die effek op armoede met dieseifde oordrag? 2 22 Contrast the demographic transition processes that are taking place in developing countries. Kontrasteer die demografiese oorgangsprosesse wat in ontwikkelende lande plaasvind @) [20] QUESTION B3/VRAAG B3 31 In terms of accepted economic theory, developing countries should promote exports for economic growth Explain why developing countnes find it difficult to increase their exports ‘of both pnmary and manufactured goods Volgens aanvaarde ekonomiese teone moet ontwikkelende lande uttvoere bevorder vir ‘ekonomiese groe! Ontankkelende lande sukkel egter om hul uttvoere van beide prmére en vervaardigde produkte te verhoog Verduidelik waarom (15) 32 Bnefly outline two international examples of integrated programmes to promote education, health and other developmental objectives in developing countnes Omskryf korthks twee internasionale voorbeelde van geintegreerde programme wat onderwys, gesondheid en ander ontwikkelingsdoelwitte in ontwikkelende lande bevorder © (20) QUESTION B4/VRAAG B4 41 Explain why donor countries give aid, and why developing countries accept aid Verduidelk waarom skenkerlande buitelandse hulp aanbied, en waarom ontwikkelende lande dit aanvaar (10) 42 Explain the role and limitations of markets in developing countries \Verduidelik die rol en beperkings van markte in ontwikkelende lande (10) [20] ITURN OVER] IBLAAI OM]6 ECS207G 05/06 2012 SECTION A: COMPULSORY TS TAFDELING A: VERPLIGTEND SE) ‘At In terms of the new interpretation of the concept ‘development’, which three core values represent common goals sought by all individuals and societies? Identify and explain Volgens die nuwe interpretasie van die konsep ‘ontwikkeling’, water dne kernwaardes verteenwoordig die gemeenskaplike doeiwitte wat deur alle individue en samelewings nagestreef word? Identifiseer en verduidelik (8) [TURN OVER] [BLAAI OM]7 Ecs2076 05/06 2012 2 The UNDP uses the Human Development Index (HDI) to determine countries’ level of development Explain how countnes are ranked in terms of the HDI, as well as the Indicators used to determina these rankings Die UNDP gebruik die Menslike Ontwikkelingsindeks (HDI) om lande se viak van ‘ontwikkeling te bepaal Verduidelik die rangordes waann lande geplaas word volgens HOI, sowel as die aanwysers wat gebruik word om hierdie rangordes te bepaal (12) [TURN OVER] IBLAAI OM}‘A3__ Bnefly explain or describe the following concepts Bespreek of omskryf kortiks die volgende begrippe 31 Population poverty cycle Bevolkings-armoede-siklus. Ecs207G 05/06 2012 (20) 32 Educational gender gap Onderwys geslagsgaping 33 Relative poverty Relatiewe armoede [TURN OVER] IBLAAI OM}3.4 Life expectancy at birth Lewensverwagting met geboorte ECS207G 05/06 2012 35 New protectionism Nuwe beskermingsmeganismes 36 Overvalued exchange rate Corgewaardeerde wisselkoers TTURN OVER] IBLAA! OM]10 Ecs207G 05/06 2012 37 Absorptive capacity in terms of aid Absorberngskapasitet in terme van hulp 38° Transfer pong Oordragprysing 39° Institutional weakness Institusionele swakheid ITURN OVER] [BLAAI OM]"1 Ecs207G 05/06 2012 310 Corruption Korrupsie ITURN OVER] IBLAAI OM]12 Ecs2076 05/08 2012 ‘SECTION B: ANSWER ANY 3 QUESTIONS AFDELING B: BEANTWOORD ENIGE 3 VRAE. QUESTION BI/VRAAG B1 11. Discuss and evaluate the Lewis Theory of Development Bespreek en evalueer Lewis se Teone van Ontwikkeling @) [TURN OVER] IBLAAI OM]13 Ecs2076 05/06 2012 12 Give a comprehensive description and evaluation of the theory on structural change and patterns of development Gee ‘n omvattende verduideliking en evaluasie van die teorie oor strukturele verandering en patrone van ontwikkeling 6) ITURN OVER} [BLAAI OM]14 Ecs207G 05/08 2012 13. Bnefly discuss and evaluate the traditional neoclassical growth theory Bespreek en evalueer korthks de tradisionele neo-klassieke groei teone ©) (20} [TURN OVER] [BLAA! OM]15 Ecs2076 05/06 2012 QUESTION B2/VRAAG B2 21 The following income distnbution data are for Mexico Die volgende inkomste verdelingsdata is van Mexico Quintile / Kwantel Percentage share / Persentasie aandee! Lowest/ Laagste 20% 24% ‘Second quintile / tweede kwantiel 57% Third quintile / derce kwantel 10,7% Fourth quintile / Vierde kwantiel 18,6% Highest / Hoogste 20% 62,6% Highest / Hoogste 10% 46.2% @ Draw the Lorenz curve for Mexico, labeling the axes Teken die Lozenz kromme wir Mexico en benoem die ase © ITURN OVER] [BLAAI OM]16 Ecs207G 05/06 2012 b. Explain how to find the Gini coefficient, graphically Verduidelik hoe die Gini koeffsient grafies bereken word @) Mexico's national income 1s about $300 billion What 1s the approximate doliar Income of the bottom 20 percent and bottom 40 percent? Mexico se nasionale inkomste is ongeveer $300 miard Wat 1s die geskatte dollar waarde van die laagste 20% en 40% van die bevolking @ Mexico's population is approximately 150 muon. Suppose that each household makes the average income for ts quintile What 1s the poverty gap and what 1s the level of Poverty i the poverty line is $400 per capita? Mexico se bevolking is ongeveer 150 miljoen Veronderstel elke huishouding verdien die gemiddelde inkomste vir sy kwantiel Bereken die armoedelokval en verduidelik wat die viak van armoede is as die armoedelyn $400 per capita 1s @ [TURN OVER} IBLAAI OM}7 Ecs2076 05/06 2012 2. Suppose one percent of national income were transferred from the richest 20 percent of households to the poorest 20 percent of households Show the effect on relative inequality on the Lorenz curve Veronderstel 1% van nasionale inkomste word oorgedra vanaf die rykste 20% van die huishoudings na die armste 20% van die huishoudings Dui aan watter effek dit op relatiewe ongelykheid sal hé in terme van die Lorenz kromme (ty f Under the same transfer, what is the effect on poverty? Wat is die effek op armoede met diesetfde oordrag? @ 22 Contrast the demographic transition processes that are taking place in developing countnes. Kontrasteer die demografiese oorgangsprosesse wat in ontwikkelende lande plaasvind 8) [20] [TURN OVER] [BLAAI OM]18 Ecs207G 05/06 2012 QUESTION B3/VRAAG B3 31 In terms of accepted economic theory, developing countnes should promote exports for economic growth Explain why developing countries find it dificult to mcrease their exports. of both primary and manufactured goods Volgens aanvaarde ekonomiese teone moet ontwikkelende lande uttvoere bevorder vir ‘ekonomiese groe! Ontwikkelende lande sukkel egter om hul uitvoere van beide primére en vervaardigde produkte te verhoog Verduidelik waarom (15) ITURN OVER] [BLAAIOM]19 Ecs207G 05/06 2012 32 Bnefly outline two international examples of integrated programmes to promote education, health and other developmental objectives in developing countnes Omskryf kortiks twee intemasionale voorbeelde van geintegreerde programme wat ondenwys, gesondheid en ander ontwikkelingsdoelmitte in ontwikkelende lande bevorder ©) [TURN OVER] [BLAAI OM]20 ECs207G 05/06 2012 QUESTION B4/VRAAG B4 41 Explam why donor countries give aid, and why developing countries accept aid \Verduidelk waarom skenkerlande buttelandse hulp aanbied, en waarom ontwikkelende lande dit aanvaar (10) ITURN OVER] [BLAAI OM]24 Ecs2076 05/06 2012 42 Explain the role and limitations of markets in developing countnes Verdurdelik die rol en beperkings van markte in ontwikkelende lande (10) [TURN OVER] [BLAAI OM]22 Ecs207G 05/06 2012 [TURN OVER] IBLAAI OM]23 Ecs2076 05/06 2012 ROUGH WORK 7 ROFWERK ITURN OVER] [BLAAI OM]24 ECS207G 05/06 2012 ROUGH WORK 7 ROFWERK ° UNISA 2012