Economic Development Indicators Quiz
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Questions and Answers

Which of the following indicators are NOT included in the World Bank's preliminary set of indicators for measuring basic needs?

  • Education
  • Housing
  • Food
  • Transportation (correct)

    • High basic-needs attainment is negatively correlated with the rate of growth of per capita GNP.

    False (B)

    What is an important indicator of the availability of sanitation and clean water facilities?

    Infant mortality

    The text highlights that GNP per head remains an important figure, but it also emphasizes the need to consider ______ and ______ of GNP.

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    Which concept do some economists believe is necessary to measure economic development effectively?

    <p>Total income (D)</p> Signup and view all the answers

    Economic development is solely defined by the growth of per capita income.

    <p>False (B)</p> Signup and view all the answers

    What do economists like Coline Clark and Kindleberger suggest as a measure of economic development?

    <p>Economic welfare</p> Signup and view all the answers

    ____ is a measure of economic development that focuses on purchasing power and income distribution.

    <p>Economic welfare</p> Signup and view all the answers

    Which of the following factors is NOT mentioned as important for increasing economic welfare?

    <p>Inflation control (B)</p> Signup and view all the answers

    Match the following economists with their views on economic development:

    <p>Harvey Leibenstein = Supports per capita output as an index Charles P. Kindleberger = Suggests economic welfare as a measure D. Bright Singh = Advocates for equal income distribution Rostow = Favors per capita income metric</p> Signup and view all the answers

    Economic development can be understood and measured as a comparative concept.

    <p>True (A)</p> Signup and view all the answers

    According to the content, economic development increases when there is an increase in real per capita income over a ___ period of time.

    <p>long</p> Signup and view all the answers

    According to the passage, what is one potential consequence of a society's economic growth that is associated with its pursuit of economic progress?

    <p>A decline in religious and social authority (D)</p> Signup and view all the answers

    Economic growth can be beneficial to societies by reducing poverty, famine, and infant mortality.

    <p>True (A)</p> Signup and view all the answers

    What is one argument presented in the passage for why achieving control over one's environment is a desirable goal?

    <p>Control over one's environment allows for greater freedom of choice and can contribute to reducing poverty, famine, and other societal issues.</p> Signup and view all the answers

    The passage suggests that economic growth can lead to a ______ in the extended family system.

    <p>destabilization</p> Signup and view all the answers

    Match the following potential costs of economic growth with their corresponding explanations:

    <p>Acquisitiveness and materialism = May accompany a society's constant pursuit of economic progress Emphasis on self-reliance = Can lead to a decline in the extended family system Greater job specialization = May result in monotonous tasks and a loss of craftsmanship Bureaucratization and impersonality = Can arise from the larger organizational structures associated with economic growth</p> Signup and view all the answers

    Which of the following is NOT mentioned in the passage as a potential benefit of economic growth?

    <p>Strengthening of traditional social structures (C)</p> Signup and view all the answers

    The passage argues that happiness is the primary goal that economic growth should aim to achieve.

    <p>False (B)</p> Signup and view all the answers

    Identify one potential negative consequence of economic growth mentioned in the passage.

    <p>One potential negative consequence is the rise of acquisitiveness, materialism, and dissatisfaction with one's current state.</p> Signup and view all the answers

    Which sector includes agriculture and fisheries?

    <p>Primary Sector (D)</p> Signup and view all the answers

    In developed countries, the majority of the population works in the primary sector.

    <p>False (B)</p> Signup and view all the answers

    What is the relationship between economic development and occupational structure according to Colin Clark?

    <p>Economic development is closely related to the shift in occupational structure from the primary sector to secondary and tertiary sectors.</p> Signup and view all the answers

    The ______ sector consists of manufacturing, trade, and construction.

    <p>Secondary</p> Signup and view all the answers

    Which of the following is considered a valid indicator of economic development?

    <p>Standard of living (B)</p> Signup and view all the answers

    A heavy dose of taxation can lead to an increase in the standard of living.

    <p>False (B)</p> Signup and view all the answers

    In under-developed countries, most of the working population is engaged in the ______ sector.

    <p>Primary</p> Signup and view all the answers

    Match the economic indicator with its correct description:

    <p>Standard of living = Increase in average consumption level of individuals Primary Sector = Agriculture and fisheries Secondary Sector = Manufacturing and trade Tertiary Sector = Services such as banking and transport</p> Signup and view all the answers

    Which of the following components is NOT included in the calculation of GNP?

    <p>Income earned within the domestic economy by foreign residents (B)</p> Signup and view all the answers

    Gross Domestic Product (GDP) includes income earned by residents from overseas investments.

    <p>False (B)</p> Signup and view all the answers

    What does net exports represent?

    <p>The difference between exports and imports of goods and services.</p> Signup and view all the answers

    Gross National Product (GNP) is concerned with the value of all finished goods and services owned by a country's __________.

    <p>citizens</p> Signup and view all the answers

    What are basic needs according to the basic-needs approach?

    <p>Health, education, and housing (D)</p> Signup and view all the answers

    The basic-needs approach focuses solely on maximizing production levels.

    <p>False (B)</p> Signup and view all the answers

    According to economists, what must be considered to effectively reduce poverty in developing countries?

    <p>Meeting the basic needs of the poorest population.</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>GDP = Total market value of all finished goods produced within a country's borders GNP = Value of all finished goods owned by a country's citizens, regardless of location Basic-needs approach = Focus on minimizing poverty rather than maximizing output Net exports = Difference between total exports and total imports</p> Signup and view all the answers

    Which indicator is NOT included in the Human Development Index (HDI)?

    <p>Infant mortality rate (C)</p> Signup and view all the answers

    The Physical Quality of Life Index (PQLI) successfully measures total welfare.

    <p>False (B)</p> Signup and view all the answers

    What year did UNDP first incorporate the Human Development Index (HDI) into its Human Development Report?

    <p>1990</p> Signup and view all the answers

    The formula for calculating the Physical Quality of Life Index (PQLI) is PQLI = (IMRI + LEI + BLI) / ______

    <p>N</p> Signup and view all the answers

    Match the following indicators with their definitions:

    <p>IMRI = Infant Mortality Rate Index LEI = Life Expectancy Index BLI = Basic Literacy Index PQLI = Physical Quality of Life Index</p> Signup and view all the answers

    What was the Physical Quality of Life Index (PQLI) for India in 2001?

    <p>0.69 (A)</p> Signup and view all the answers

    According to Morris, what is one limitation of the Physical Quality of Life Index (PQLI)?

    <p>It does not measure economic development.</p> Signup and view all the answers

    Morris sets Gabon's infant mortality rate of 229 per thousand live births as the best rate in 1950.

    <p>False (B)</p> Signup and view all the answers

    Which of the following indicators is used to measure education?

    <p>Literacy rates (A)</p> Signup and view all the answers

    High basic-needs attainment is negatively related to the rate of growth of per capita GNP.

    <p>False (B)</p> Signup and view all the answers

    What percentage of the population with access to sanitary facilities is considered an important indicator?

    <p>percentage of the population with access to sanitation facilities</p> Signup and view all the answers

    Infant mortality is a good indication of the availability of ______ and clean water facilities.

    <p>sanitation</p> Signup and view all the answers

    Match the following economic concepts with their descriptions:

    <p>GNP per head = Important figure in measuring economic growth Basic-needs data = Supplements GNP data Calorie supply = Indicator of food security Literacy rates = Indicator of educational attainment</p> Signup and view all the answers

    Which socioeconomic right is included in the U.N. Universal Declaration of Human Rights?

    <p>Right to minimum wages (B)</p> Signup and view all the answers

    The satisfaction of basic needs is considered a human right according to the U.S. Founders.

    <p>True (A)</p> Signup and view all the answers

    Name one factor that is positively associated with increased worker health and productivity.

    <p>Life expectancy or literacy</p> Signup and view all the answers

    Flashcards

    Economic Development Comparison

    Two methods to compare economic development over time: within a country and with other countries.

    Occupational Structure

    The distribution of the working population across different sectors which impacts economic development.

    Primary Sector

    The economic sector involving agriculture, forestry, mining, etc., commonly dominant in under-developed countries.

    Secondary Sector

    The economic sector involving manufacturing, construction, and trade, typical in developing countries.

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    Tertiary Sector

    The economic sector involving services like banking, transport, and education, predominant in developed countries.

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    Shifts in Occupational Distribution

    Economic development is indicated by a shift from primary sector jobs to secondary and tertiary jobs.

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    Standard of Living Criterion

    A measure of economic development focused on the average consumption level rather than national income.

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    Consumption Level

    A key component of the standard of living, indicating how much people can consume.

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    Total Income

    A measure of welfare encompassing all income produced in an economy.

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    Per Capita Real Income

    Average income per person, often used to measure economic growth's impact on standards of living.

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    Economic Welfare

    A measure of economic development that considers income distribution and purchasing power.

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    Economic Development

    A process defined by an increase in real per capita income over time.

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    Factors Influencing Economic Welfare

    Includes equal income distribution and stable purchasing power to enhance welfare levels.

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    Comparative Concept of Development

    Measurement of economic development by comparing different countries' progress.

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    Drawbacks of Real National Income

    Limitations of using national income solely to measure economic development quality.

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    Economic Growth vs. Economic Development

    Economic growth is about output increases; development includes quality of life improvements.

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    Life Expectancy

    The average number of years a person is expected to live.

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    Infant Mortality Rate (IMR)

    The number of infant deaths per thousand live births.

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    Physical Quality of Life Index (PQLI)

    An index that measures the quality of life based on life expectancy, infant mortality, and literacy rates.

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    Range in PQLI

    The difference between maximum and actual values used in calculating indices.

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    Human Development Index (HDI)

    A composite measure of life expectancy, literacy, and schooling years, along with GDP per capita.

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    Limitations of PQLI

    PQLI does not account for economic development or total welfare.

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    Weighted Indicators

    Using different weights for various variables in an index for accurate analysis.

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    Gabon’s Infant Mortality Rate

    Set at 0 by Morris in 1950, with a worst rate of 229 per thousand.

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    Calorie Supply

    Calorie supply per head or as a percentage of requirements.

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    Literacy Rates

    The percentage of people who can read and write in a population.

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    Infant Mortality Rate

    Number of infant deaths per thousand live births.

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    Access to Sanitation

    Percentage of the population with proper sanitation facilities.

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    Basic Needs Theory

    Concept that meeting fundamental human needs is essential for development.

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    GNP per Head

    Gross National Product divided by the population, measuring economic productivity.

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    Human Rights in Economics

    Socioeconomic rights related to health, education, and employment outlined in declarations.

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    Gross National Product (GNP)

    GNP is the total value of goods and services produced by residents of a country, regardless of location.

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    Gross Domestic Product (GDP)

    GDP is the total monetary value of all finished goods and services produced within a country's borders during a specific period.

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    Net Exports

    Net exports are calculated as total exports minus total imports of goods and services.

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    Basic-Needs Approach

    An economic strategy focused on meeting essential needs of the poorest populations rather than just maximizing production.

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    Basic Needs Indicators

    Measures of progress addressing essential needs such as nutrition, health, housing, and sanitation.

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    Economic Growth vs. Poverty Reduction

    Economic growth can be limited in reducing poverty without direct focus on basic needs of the poor.

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    Income Distribution Issues

    The uneven distribution of income makes it hard to raise productivity and address poverty effectively.

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    Comprehensive Economic Scorecard

    GDP serves as a broad measure of a country's economic health and overall production.

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    Acquisitive Society

    A society focused on acquiring wealth and material possessions.

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    Alienation

    A feeling of being disconnected or isolated from society.

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    Economic Growth Benefits

    Positive impacts of economic growth like reducing mortality and enhancing leisure.

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    Individual Control

    People's ability to influence their environment and choices.

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    Costs of Growth

    Negative effects of economic growth, such as materialism and family destabilization.

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    Job Specialization

    The increased focus on specific job roles due to economic growth.

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    Bureaucratization

    The process of creating rigid and impersonal organizational structures.

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    Social Tension

    Strain caused by competition for limited resources in society.

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    Study Notes

    Principles and Concepts of Development

    • Economic Development: Processes, policies, or activities aiming to improve a community's economic well-being and quality of life.
    • Measures of Economic Development: Various methods used to track and assess the progress of economic development, although none is universally accepted.
      • National income as an index: Focuses on the total income generated within a country. Net National Product (NNP) is preferred to Gross National Product (GNP) for a better evaluation of progress.
      • Per capita real income: Economic progress by increasing aggregate output and the per capita income, as living standards improve.
      • Economic welfare: Considers factors like equal income distribution and purchasing power to understand well-being.
    • Classification of Rich and Poor Countries: International classification of countries based on their economic standing (e.g., low-income, upper-middle-income, high-income).
      • This is primarily based on gross national income (GNI) per capita, determined by the World Bank.
    • Basic Needs Attainment: Focus on fulfilling fundamental needs like food, shelter, healthcare, education.
    • Growth and Basic Needs: Economic growth correlates with basic needs attainment; increased output leads to better well-being.
    • Basic Needs as a Human Right: Economic rights are considered important for a fulfilling life, comparable to civil rights.
    • Cost and Benefit of Economic Development: Economic growth brings numerous benefits, but it also has costs like potential social inequality, environmental damage, and shifts in social structures.

    Abbreviations

    • ASEAN: Association of Southeast Asian Nations
    • DCs: Developed countries (high-income)
    • E.U.: European Union
    • FAO: Food and Agriculture Organization of the United Nations
    • G7: Group of Seven countries (major developed economies)
    • G8: Group of Eight countries, incorporating Russia
    • GATT: General Agreement on Tariffs and Trade (predecessor to WTO)
    • GDP: Gross domestic product
    • GNI: Gross national income (same as GNP)
    • GNP: Gross national product
    • HDI: Human Development Index
    • ILO: International Labour Organisation
    • IMF: International Monetary Fund
    • LDCs: Less developed countries (developing nations)
    • LICs: Low-income countries
    • LLDCs: Least developed countries
    • MDGs: Millennium Development Goals
    • MNCs: Multinational corporations
    • NGOs: Non-governmental organizations
    • NICs: Newly industrialising countries
    • NNP: Net national product
    • OECD: Organisation for Economic Co-operation and Development
    • PQLI: Physical Quality of Life Index
    • PRI: Partido Revolucionario Institucional (Institutional Revolutionary Party; Mexico)
    • UNDP: United Nations Development Programme
    • U.N.: United Nations
    • UNCTAD: United Nations Conference on Trade and Development.

    Other Economic Concepts

    • Economic Development: Focused on the broader improvements in the well-being of a nation.
    • Economic Growth: Measured by the increase in Gross Domestic Product(GDP).
    • Gross Domestic Product: Value of all finished goods and services.
    • Gross National Product: Total value of goods and services produced by a countries nation's citizens, regardless of location.
    • Classification of Countries: Categorized as Low-income, Lower-Middle-income, Upper-Middle-income , andHigh-income based on their GNI or GDP per capita. These criteria are used to evaluate relative economic well-being.

    Human Development Indices

    • Physical Quality of Life Index (PQLI): A composite index of factors like infant mortality, life expectancy, and literacy. This is used to measure well-being that extends beyond income, as it combines three key variables.
    • Human Development Index (HDI): Combines life expectancy, education, and per capita income to evaluate a country's overall development.

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    Chapter 1 Principles and Concepts of Development PDF

    Description

    Test your knowledge on the indicators used to assess economic development, including those proposed by the World Bank. Explore key concepts related to GNP, purchasing power, and the roles of different economists in shaping our understanding of economic welfare.

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