Quiz 1 - Economic Development

12/13/22, 6:07 PM QUIZ 1 - ECONOMIC DEVELOPMENT
QUIZ 1 - ECONOMIC DEVELOPMENT

Total points 41/65
I can do all things through Christ who gives strength

Philippians 4:13
The respondent's email (gajultos.khamil@clsu2.edu.ph) was recorded on submission of

this form.
0 of 0 points
Full Name (Surname, First Name, Middle Initial) *
Gajultos, Khamil Kaye B.
Course, Year and Section *
BSMA 2-1
PART I (True or False) 11 of 15 points
Select True if the statement is correct and False if otherwise
GDP, GNP and Human Development Index (HDI) are all economic *1/1
measures that measure thewellbeing of people in a country.
True
False
https://docs.google.com/forms/d/e/1FAIpQLSdrbHv20HSImWBoWGVnJ-kfA2DMKDKQIg6jY5m_Li2vApzb3g/viewscore?viewscore=AE0zAgA5jM8q… 1/31

Economic growth is measured as an increase in real GDP. * 1/1
True
False
The major variables of HDI are literacy rates, life expectancy, income per *0/1
capita and inequality rates.
True
False
Correct answer
False
The rate of population growth has a major impact on the nation's *1/1
economy.
True
False
The level of wages in a country is directly related to the level of *1/1

productivity of workers in that country.
True
False

Economic Development may require a change in some of the social *1/1
institutions of a nation.
True
False
Practically all income in underdeveloped nations is used to purchase *1/1

consumer goods, which leaves little, if anything, for savings.
True
False
Because few households can afford to save much, most developing *1/1
countries depend heavily on corporations for their domestic
nongovernmental (i.e., private) savings.
True
False

One of the major problems of underdeveloped nations is that they do not *0/1
have enough people engaged in agriculture.
True
False
Correct answer
False
Developing countries typically have low real GDP per capita, high birth *1/1
rates, low education, and low savings rates.
True
False
The money sent home by workers who emigrate from a developing *1/1
country can benefit the country as a source of foreign exchange, but it
can hurt the country if the most skilled and educated professionals are
leaving.
True
False

As incomes rise there tends to be a shift of labor from the services sector *1/1
to the industrial sector.
True
False
ΔY/Y is determined by s/k. * 1/1
True
False
Capital and Income has an inverse relationship because of the trade-off. * 0/1
True
False
Correct answer
False

Countries without savings has no way to increase growth thereby going *0/1
into a vicious circle.
True
False
Correct answer
False
Multiple Choice 17 of 32 points
Select the best choice which complete the statement or answers the question.
Development economics is concerned with * 0/1
efficient allocation of scarce resources.
economic, social and political institutions.
imperfect resource and commodity markets.
None of the choices
Correct answer
economic, social and political institutions.

Development is now thought to mean * 1/1
economic growth, accompanied by dramatic change in social and political

institutions, as well as in the attitudes of the people.
sustained increases in GNP per capita only.
the process by which authoritarian political structures give way to more democratic
forms of government.
increases in the population growth rates to more reasonable levels.
a movement towards national food security.
Developing countries are commonly characterized by * 1/1
low levels of living, high levels of income inequality, and high dependency
burdens.
low levels of living, low levels of income inequality, and high dependency burdens.
primary-product exports, inadequate education and vulnerability in international

relations.
All of the above

To Amartya Sen, * 1/1
development is a meaningless concept in a world characterized by capitalist

domination of the masses.
development should be thought of as rapid growth of GDP or GNP per capita.
development requires cultural changes such that the poor begin to think in
"modern" ways.
development should be thought of as a process during which individuals'

"capabilities to function" are enhanced.
Which of the following are not among Rostow's stages of growth? * 1/1
The age of mass consumption
The take-off
The drive to maturity
The traditional society
All of the above are among Rostow's stages of growth.

According to the Harrod-Domar model, * 1/1
economic growth depends on wise public investment decisions by the

government.
the proletariat must overthrow the capitalists and establish a socialist state before
economic growth can occur.
there is surplus labor in the agricultural sector that can be used to fuel economic
growth.
the developing world is caught in a dependent relationship with the developed

world.
In the Lewis model, * 0/1
surplus labor is assumed to exist in the urban areas.
capitalists are assumed to reinvest their profits, further increasing the demand for
labor.
unemployment is assumed to exist in urban areas.
All of the above.
Correct answer
capitalists are assumed to reinvest their profits, further increasing the demand for
labor.

In the Harrod-Domar model, suppose that the national capital-output ratio *0/1
is 4. If the national net savings rate increases from 8% to 12%, the
economic growth rate will increase from __________ to __________.
2%; 3%
The answer cannot be determined from the information provided.
32%; 48%
-6%; 0%
0.5%; 0.33%
Correct answer
2%; 3%
Which of the following is not typically an element in the structural change *0/1
that accompanies development?
increase in the share of agriculture in GDP (gross domestic product)
increase in manufacturing as a share of GDP
increase in urbanization
All of the above changes accompany development
Correct answer
All of the above changes accompany development

Economic growth measures the * 1/1
increase in PPP
increase in education index
increase in output
none of the above
The quality of life index (physical) is an aggregation of widely available *0/1

indicators of basic human needs. Which of the following is not a
component of the index:
life expectancy
per capita income
infant mortality
literacy
Correct answer
per capita income

The concept of Purchasing Power Parity * 0/1
is based upon the cost of hamburgers around the world
is based upon the cost of the same market basket of goods in different countries
is based upon the market exchange rate
is based upon the nominal exchange rate
Correct answer
is based upon the cost of the same market basket of goods in different countries
Which measure uses a common set of international prices for all goods *0/1
and services produced?
purchasing power parity">purchasing power parity income levels
GNI price deflators
foreign exchange rate conversions to U.S. dollars
the exchange rate
Correct answer
purchasing power parity">purchasing power parity income levels
The Lewis model of the dual economy makes the following *1/1
assumption(s)
The rural wage initially remains constant
Industry makes a profit by employing cheap labor
Rural wage will rise when industry expands sufficiently
all of the above
none of the above
Industry faces an elastic supply curve of labor because the marginal *1/1
product of labor in agriculture is
lower than its marginal product in industry
less than the average product in agriculture
very low or zero
constant at all levels of agricultural output

The Arthur Lewis model utilizes the assumption that, * 0/1
an unlimited supply of labor is available at a fixed wage rate
supply of labor is a strictly increasing function of wage rate
labor supply grows at a fixed rate
disguised unemployment must not exist in the agricultural sector.
Correct answer
an unlimited supply of labor is available at a fixed wage rate
If a country experiences a rapid increase in per-capita income due to *0/1

discovery of new oil reserves, then it is experiencing:
growth but not necessarily development.
development but not growth.
both growth and development.
neither growth nor development.
Correct answer
growth but not necessarily development.
The supply curve of labor to industry is horizontal if there is surplus labor *1/1
in agriculture. The condition occurs as long as:
the marginal product of labor in agriculture is less than the average product of
labor.
the marginal product of labor in agriculture is less than the marginal product of
labor in industry.
there are diminishing returns to labor in agriculture.
the marginal product of labor in agriculture is zero.
Which of the following is not true about agriculture's role in economic *0/1
development.
Provides labor for non-agricultural sector,
Provides a market for non-agricultural commodities,
Source of industrial raw materials,
None of the above
Correct answer
Provides a market for non-agricultural commodities,

For Rostow, which of the following constitute pre-conditions for take-off? * 0/1
Investment rate increase
Universal primary education
Development of one or more manufacturing sectors with a high growth rate
First and second choice
First and third choice
Correct answer
How might a government try to increase output, if the government is to *1/1

follow the suggestions of the Harrod-Domar model?
By encouraging savings
By beginning to use state-owned enterprises
By promoting technologies which help firms to produce more output with less
capital (lowering the capital to output ratio)
First and second choice
None is correct

In the Lewis model, what does the term “surplus labor” refer to? * 1/1
An amount of labor that is so high that it deflates wages throughout the economy
Labor that does not have at least a primary level education
Labor that can be withdrawn from the low productivity agricultural sector
without a decrease in the total production
Labor that is exploited by the capitalist class
Labor that can be withdrawn from the industrial sector without a decrease in the
total production
In the Lewis model, what will cause an expansion in modern sector *1/1
employment?
A reinvestment of profits by capitalists that allows production to expand
Interventions by the State to expand employment
An increase in technology
An increase in the surplus labor
An increase in wages in the traditional agricultural sector

The Harrod-Domar growth model is based on the relationship of what two *1/1
economic elements?
Raw materials and technology
Savings and investment
Educational enrollment and number of teachers
Tariff and tax levels
Population and economic development
The Lewis model works as long as which of the following holds true? * 1/1
The wage rate in the modern sector is higher than in the traditional agricultural
sector.
The modern sector grows fast enough to absorb labor from the traditional
agricultural sector.
The traditional agricultural sector remains unproductive and thus able to release
workers without reducing agriculture output.
The workers released from the agricultural sector can be quickly retrained to fit into
the modern sector.
All of the above
None of the above
First and second choice only

Investment in capital implies * 1/1
future sacrifice for present gain
buying financial assets such as stocks or bonds
no sacrifice because it leads to growth
a present sacrifice for expected future gain
Through which of the following combinations do firms produce output? * 1/1
Capital and investment
Capital and labor
Labor and productivity
Labor and workers

Which of the following does not represent an increase in capital? * 0/1
New machines
Education
More workers
New tools
All of the given choices
None of the given choices
First and third choice only
Correct answer
Which of the following is not a requirement for increased growth? * 0/1
Capital expenditure
Increased labor force
Increased productivity
Increased human capital
First and second choice only
Correct answer
Within the framework of the Production Possibility Frontier, Which of the *0/1
following options is not a component of economic growth?
Price controls
Technological advancement
Physical capital and human capital formation
Labor force growth
First and fourth choice only
Correct answer
Price controls
A subsistence economy is * 0/1
a very low income economy.
an economy in which people make what they consume.
an economy in which people receive food for pay.
Correct answer
Development economics must have a scope wider than traditional *1/1

economics because
values and attitudes play little role in the pace of development.
people in developing societies do less utility-maximizing.
transformation of social institutions is necessary for development.
First and third choice only
Problem Solving 13 of 18 points
Refer to the given problem below and answer the following questions.
Compute the Philippine Human Development Index (HDI) based on the following.
Use the goal post provided by the United Nations and was used in the lecture
discussion. a. GNI per capita is at 10,380 in PPP dollars; b. Gross enrolment is
at 50%; c. Adult Literacy is at 68%; d. Life expectancy of 67 years.
A. 0.77 B. 0.50 C. 0.68 D. 0.81
What is the total Income Index? (use numbers only to type your answer, *2/2
and avoid unnecessary spaces or characters; and round off your answers
into two decimal places only.)
0.77

What is the income classification of the Philippines based on the given *2/2
assumptions. (type in UPPERCASE letters only)
UPPER MIDDLE INCOME COUNTRY
What is the total Education Index? (use numbers only to type your answer, *2/2
and avoid unnecessary spaces or characters; and round off your answers
to two decimal places only.)
0.62
What is the total Life Expectancy Index? (use numbers only to type your *···/2
answer, and avoid unnecessary spaces or characters; and round off your
answers to two decimal places only.)
0.26
Correct answers
.70
0.70
.7
0.7
.8
.81
0.80
0.81

What is the total HDI of the Philippines based on the given assumptions? *5/5
(use numbers only to type your answer, and avoid unnecessary spaces or
characters; and round off your answers to two decimal places only.)
0.73
What is the development classification of the Philippines based on the *2/2

given data? (type in UPPERCASE letters only)
MEDIUM HUMAN DEVELOPMENT
Terminal Survey: What have you learned so far? Please write your *···/3
learning experience in the past academic term. I will be glad to hear
from you. Thank you
In the past term I learned that economic development is the creation of wealth that results
in community benefits. It is more than a job creation program; it is an investment in the
growth of our economy and the prosperity and quality of life for all residents. To different
people, economic development means different things. Quantitative changes in the
economy are brought about by economic growth. Moreover, economic growth reflects
national or per capita income growth. Economic development entails changes in income,
savings, and investment, as well as gradual changes in the country's socioeconomic
structure.
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12/13/22, 6:07 PM QUIZ 1 - ECONOMIC DEVELOPMENT

QUIZ 1 - ECONOMIC DEVELOPMENT

I can do all things through Christ who gives strength

The respondent's email (gajultos.khamil@clsu2.edu.ph) was recorded on submission of

Full Name (Surname, First Name, Middle Initial) *

Gajultos, Khamil Kaye B.

Course, Year and Section *

PART I (True or False) 11 of 15 points

Select True if the statement is correct and False if otherwise

The level of wages in a country is directly related to the level of *1/1

Practically all income in underdeveloped nations is used to purchase *1/1

ΔY/Y is determined by s/k. * 1/1

Multiple Choice 17 of 32 points

Development economics is concerned with * 0/1

efficient allocation of scarce resources.

economic, social and political institutions.

imperfect resource and commodity markets.

None of the choices

economic, social and political institutions.

economic growth, accompanied by dramatic change in social and political

sustained increases in GNP per capita only.

increases in the population growth rates to more reasonable levels.

a movement towards national food security.

Developing countries are commonly characterized by * 1/1

primary-product exports, inadequate education and vulnerability in international

All of the above

development is a meaningless concept in a world characterized by capitalist

development should be thought of as rapid growth of GDP or GNP per capita.

development should be thought of as a process during which individuals'

The age of mass consumption

The drive to maturity

The traditional society

All of the above are among Rostow's stages of growth.

economic growth depends on wise public investment decisions by the

the developing world is caught in a dependent relationship with the developed

In the Lewis model, * 0/1

surplus labor is assumed to exist in the urban areas.

unemployment is assumed to exist in urban areas.

All of the above.

The answer cannot be determined from the information provided.

increase in the share of agriculture in GDP (gross domestic product)

increase in manufacturing as a share of GDP

All of the above changes accompany development

All of the above changes accompany development

increase in education index

none of the above

The quality of life index (physical) is an aggregation of widely available *0/1

per capita income

per capita income

is based upon the cost of hamburgers around the world

is based upon the market exchange rate

is based upon the nominal exchange rate

purchasing power parity">purchasing power parity income levels

GNI price deflators

foreign exchange rate conversions to U.S. dollars

the exchange rate

purchasing power parity">purchasing power parity income levels

The rural wage initially remains constant

Industry makes a profit by employing cheap labor

Rural wage will rise when industry expands sufficiently

all of the above

none of the above