Podcast
Questions and Answers
Development is the enhancement of human ______
Development is the enhancement of human ______
well-being
Absolute poverty is defined as a situation of being unable to meet the minimum levels of ______, food, clothing, health care, shelter, and other essentials.
Absolute poverty is defined as a situation of being unable to meet the minimum levels of ______, food, clothing, health care, shelter, and other essentials.
income
The Lorenz Curve and GINI ______ measure income inequality.
The Lorenz Curve and GINI ______ measure income inequality.
Coefficient
Inequity refers to the degree of ______ of opportunities to generate or achieve future life outcomes.
Inequity refers to the degree of ______ of opportunities to generate or achieve future life outcomes.
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Vertical inequality occurs among different ______ or households.
Vertical inequality occurs among different ______ or households.
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Inequality can lead to economic ______, undermines social stability, and is simply unfair.
Inequality can lead to economic ______, undermines social stability, and is simply unfair.
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Weak institutions can exist due to uncertainty of property rights and opportunities to ______.
Weak institutions can exist due to uncertainty of property rights and opportunities to ______.
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Chronic poverty refers to ______-term poverty.
Chronic poverty refers to ______-term poverty.
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CPI Index sometimes called the GDP ______
CPI Index sometimes called the GDP ______
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PPP is the calculation of GNI using a ______ set of international prices.
PPP is the calculation of GNI using a ______ set of international prices.
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Nominal values are based on ______ prices of that year.
Nominal values are based on ______ prices of that year.
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Real GDP value takes ______ into account.
Real GDP value takes ______ into account.
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To compute US$ 2010 GDPPc, you need to ______ GDP by population.
To compute US$ 2010 GDPPc, you need to ______ GDP by population.
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The equation for GPI is GPI = GDP + value of unpaid work – costs of ______, social breakdown, and environmental damages.
The equation for GPI is GPI = GDP + value of unpaid work – costs of ______, social breakdown, and environmental damages.
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Basic needs are commodities or services over which a person can exercise ______ or command.
Basic needs are commodities or services over which a person can exercise ______ or command.
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Sustainability is concerned with ______ equity.
Sustainability is concerned with ______ equity.
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Amartya Sen defines ______ as the choices a person makes among 'functionings' that they can achieve.
Amartya Sen defines ______ as the choices a person makes among 'functionings' that they can achieve.
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The ______ Model describes a comprehensive effort to initiate economic development across various industries and skills.
The ______ Model describes a comprehensive effort to initiate economic development across various industries and skills.
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The challenges of sustainability include thinking about the ______.
The challenges of sustainability include thinking about the ______.
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In Doughnut Economics, the center ring is called the social ______.
In Doughnut Economics, the center ring is called the social ______.
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Positive production externalities include ______ production.
Positive production externalities include ______ production.
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Ensuring social scope means considering whose ______ is being addressed.
Ensuring social scope means considering whose ______ is being addressed.
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Negative consumption externalities include ______ congestion.
Negative consumption externalities include ______ congestion.
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Coordination failures occur when agents cannot ______ their behavior leading to suboptimal outcomes.
Coordination failures occur when agents cannot ______ their behavior leading to suboptimal outcomes.
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Participatory Development requires empowerment and ______.
Participatory Development requires empowerment and ______.
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Government intervention should be approached with a ______ goods provision mindset.
Government intervention should be approached with a ______ goods provision mindset.
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Wicked problems are often characterized by their ______ complexity.
Wicked problems are often characterized by their ______ complexity.
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One characteristic of wicked problems is that they usually have no clear ______.
One characteristic of wicked problems is that they usually have no clear ______.
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The Headcount Ratio (HCR) measures the percentage of people below a ______ line.
The Headcount Ratio (HCR) measures the percentage of people below a ______ line.
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One example of redistributive growth is ______-intensive growth.
One example of redistributive growth is ______-intensive growth.
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GDP represents the aggregate value-added by all firms in a ______.
GDP represents the aggregate value-added by all firms in a ______.
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The Depth of Poverty measures the average distance of the poor from the poverty ______.
The Depth of Poverty measures the average distance of the poor from the poverty ______.
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A renewed social contract is one of the ways forward according to the UN ______ Agenda.
A renewed social contract is one of the ways forward according to the UN ______ Agenda.
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Individuals may support inefficient institutions when they make irreversible investments that are complementary to a particular set of __________.
Individuals may support inefficient institutions when they make irreversible investments that are complementary to a particular set of __________.
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One of the four megatrends of inequality is __________ change.
One of the four megatrends of inequality is __________ change.
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The goal of welfare economics is __________ efficiency.
The goal of welfare economics is __________ efficiency.
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One form of market failure is __________ failure.
One form of market failure is __________ failure.
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Public goods often lead to a situation where the private sector only sees their benefit and does not consider the costs of others __________ from their investment.
Public goods often lead to a situation where the private sector only sees their benefit and does not consider the costs of others __________ from their investment.
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The __________ of the commons describes a scenario where many people take more than their share of a common resource.
The __________ of the commons describes a scenario where many people take more than their share of a common resource.
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__________ are unintended side effects of production that can affect others, either positively or negatively.
__________ are unintended side effects of production that can affect others, either positively or negatively.
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An example of information failure includes situations where information is __________ or withheld.
An example of information failure includes situations where information is __________ or withheld.
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Unemployment, inflation, and disequilibrium are considered forms of __________ disturbances.
Unemployment, inflation, and disequilibrium are considered forms of __________ disturbances.
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Incomplete markets often provide goods or services that people want at a relatively __________ price, but are too expensive to produce.
Incomplete markets often provide goods or services that people want at a relatively __________ price, but are too expensive to produce.
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Study Notes
Development
- Development is defined as the enhancement of human well-being.
- Well-being is a multidimensional concept, implying priorities and trade-offs.
- Defining development is a national and personal choice reflecting the social needs and aspirations of the corresponding individual, group, class, or nation.
- Absolute poverty is a situation of being unable to meet the minimum levels of income, food, clothing, health care, shelter, and other essentials.
- Chronic poverty is long-term poverty.
- Persistent poverty is characterized by inconsistent movement from poor to non-poor.
Inequality
- Inequity refers to the equality of opportunities to generate or achieve future life outcomes, an ex-ante event.
- Inequality refers to the current spread of life outcomes, an ex-post event.
- The Lorenz Curve and GINI Coefficient measure income inequality.
- A GINI Coefficient closer to 1 indicates perfect inequality, while a coefficient closer to 0 indicates perfect equality.
- Defining inequality requires considering among whom, in what space, and over what time.
- Vertical inequality exists among different individuals or households.
- Horizontal inequality exists within a group.
- Inequality poses a problem due to its negative impacts on economic efficiency, social stability, and fairness.
Weak Institutions
- Factors contributing to weak institutions include uncertainty of property rights and opportunities to bribe, a flimsy legal system, political instability, and corrupt markets.
- When new elites inherit extractive institutions, they may prioritize exploiting them for their benefit rather than incurring the costs of introducing better ones.
- Individuals making irreversible investments complementary to existing institutions may support them, contributing to their persistence.
Megatrends of Inequality
- Technological innovation, climate change, urbanization, and international migration serve as megatrends contributing to inequality.
Market Failures
- Welfare economics aims for Pareto efficiency, where a change makes some individuals better off without making anyone else worse off.
- The free market is limited by individualistic perspectives on the "grass is always greener" phenomenon.
- Market failures include competition failure, public goods, externalities, incomplete markets, information failure, and unemployment, inflation, and disequilibrium.
- The Tragedy of the Commons describes a situation where individuals take more than their share of a common resource pool, leading to depletion.
- Production externalities can be positive (e.g., honey production) or negative (e.g., waste dumping).
- Consumption externalities can be positive (e.g., vaccination) or negative (e.g., road congestion).
Wicked Problems
- Wicked problems are difficult to clearly define, have many interdependencies, lead to unforeseen consequences, are often unstable, lack clear solutions, are socially complex, involve multiple stakeholders, necessitate behavior change, and are characterized by chronic policy failure.
- The UN Common Agenda proposes three ways forward: a renewed social contract, solidarity between generations, and delivering and protecting public goods and commons.
Monetary Measures
- The Headcount Ratio (HCR) measures the percentage of people below a poverty line.
- The Poverty Gap Ratio measures the average distance of the poor from the poverty line.
- The Squared Poverty Gap measures the degree of income inequality among the poor.
- Economic growth alone is not sufficient for development due to social costs.
- Redistributive growth examples include labor-intensive growth and agricultural growth.
GDP, GNP, and related concepts
- GDP is the aggregate value-added by all firms in a country.
- GNP is GDP plus net factor income from abroad, including repatriated profits and remittances by migrants.
- GDPPc and GNIPpc are obtained by dividing GDP or GNI by the population.
- CPI, or the GDP Deflator, adjusts GDP for inflation.
- PPP uses a common set of international prices for goods and services to provide a more accurate comparison of living standards.
- Nominal values refer to raw values based on current prices, while real values take inflation into account based on a reference year.
Semi-/Non-Monetary Measures
- Vulnerability refers to the probability of falling into poverty due to shocks.
- Vulnerability of the poor focuses on the probability of future outcomes being lower than current outcomes due to shocks.
- The poor are generally more risk averse because a decline in their current outcomes has a greater impact.
- Covariate risks affect many people, while idiosyncratic risks affect individuals or households.
- The risk of irreversibility involves shocks that could lead to chronic or persistent poverty.
Basic Needs/Entitlements
- Basic needs or entitlements are commodities or services over which a person has ownership or command.
- Indicators of basic needs include the HDI and MPI.
- Assessing basic needs involves considering availability, accessibility, security, acceptability, and quality.
Sustainability
- Sustainability is concerned with intergenerational equity.
- Aspects of sustainability include climate change and carbon emissions, asset transmission across generations, and public debt accumulation.
- Challenges to sustainability include determining timeframes for future generations, defining the social scope for wellbeing, and requiring participation from highly industrialized countries.
Easterly's Quality of Life Indicators
- Easterly identifies three categories for a higher quality of life: individual rights and democracy, political stability and peace, and absence of "bads."
Amartya Sen's Concepts
- Capabilities refer to the choices a person makes among functionings they can achieve, including the freedom to exercise such choices.
- Functioning refers to what people can be or do.
- Freedom refers to the exercise of choice.
Economic Sustainability
- Coordination Failures arise when agents' inability to coordinate their behavior leads to an outcome that makes all agents worse off.
- Complementarities occur when an action by one agent incentivizes other agents to take similar actions.
- The Big Push Model is a concerted, economy-wide effort to initiate or accelerate economic development across new industries and skills.
- Limitation of Big Push Model includes high costs, unclear investment allocation, insufficient information on the final equilibrium, and potential government intervention.
Doughnut Economics
- Doughnut Economics aims for a "safe and just space for humanity" within the ecological ceiling.
- The Social Foundation in the center ring of the doughnut model depicts the proportion of people lacking access to life's essentials.
- The Ecological Ceiling in the outer ring represents planetary boundaries that life depends on and must not be overshot.
- Three goals of doughnut economics include:
- Safe and just space for humanity
- Regenerative economy
- Distributive economy
Social Sustainability
- Participatory Development requires empowerment and devolution.
- Human rights are fundamental rights and freedoms inherent to all human beings.
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Description
This quiz explores key concepts related to development and inequality. It covers definitions, dimensions of well-being, types of poverty, and measures of income inequality such as the Lorenz Curve and GINI Coefficient. Test your understanding of these foundational topics in social sciences.
