Questions and Answers
Which region experienced the most significant reduction in the number of people living in absolute poverty from 1990 to 2012?
What was the global poverty rate in 2012 at the poverty line of $1.90 per day?
As of 2012, which region had the highest poverty rate among its population?
In which region did the poverty rate increase from 1990 to 2012?
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How many million people were living in absolute poverty in South Asia in 1990?
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Which region had the least amount of absolute poverty in 1990?
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What was the percentage of the population living in poverty in Latin America and the Caribbean in 2012?
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What was the change in the number of poor in Sub-Saharan Africa from 1990 to 2012?
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Which region had the highest poverty gap percentage at $1.90 a day in 2012?
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What is the poverty gap percentage for low-income countries at $1.90 a day in 2012?
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What is the Sustainable Development Poverty Reduction Target focused on?
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According to the World Bank approach, what is one major aspect of promoting opportunity for the poor?
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What measures does the World Bank suggest for enhancing security for the poor?
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Which income group had the lowest poverty gap percentage at $1.90 a day in 2012?
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Which region had the lowest poverty gap percentage at $1.90 a day in 2012?
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What factor is critical for determining the growth rate needed to meet the Sustainable Development Target?
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What is most associated with sustained growth in successful countries according to the World Bank Commission on Growth and Development?
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Which theory emphasizes technological progress as a key factor for growth in developed countries?
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What is a defining characteristic of the Solow neoclassical growth model?
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What aspect does the 'new' endogenous growth theory primarily address?
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Which of the following is NOT a focus of the empirical studies using the production function?
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What did Harrod contribute to the field of economic growth?
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What is a primary concern of classical economists regarding growth?
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What principle does the growth diagnostics approach focus on?
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What does the Neoclassical growth model suggest will happen in the long run according to the natural rate of growth?
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Which scenario would occur if capital grows faster than labor in the Neoclassical model?
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What is a key prediction of the Neoclassical growth model regarding per capita incomes across countries?
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What does the production function approach primarily analyze in terms of economic growth?
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What does early studies applying the production function to developed countries suggest about technical progress?
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In studies of developing countries, which factor is found to be most important in explaining growth according to the production function?
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What is the impact of adding growth-inducing variables to the production function?
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How does the Neoclassical growth model view the relationship of capital and labor in growth?
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What condition must be met for per capita income (PCY) to rise if the population growth is at 2%?
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Which statement best describes the relationship between rapid population growth and poverty?
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What is one negative effect of countries relying heavily on primary commodities?
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Which factor contributes to slower growth in countries dependent on primary products?
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What difficulty arises from rapid population growth in poor countries?
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How does the net savings-investment ratio in China compare to other poor countries?
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What is a common trait of weak institutional structures in developing countries?
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What aspect does Engel's Law refer to in the context of primary commodities?
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Study Notes
Global and Regional Poverty Data
- Global poverty measured at $1.90 per day saw significant decreases from 1990 to 2012.
- East Asia and Pacific reduced poor population from 996 million to 147 million, with poverty rate dropping from 60.6% to 7.2%.
- Sub-Saharan Africa faced an increase in poor population from 288 million to 389 million, poverty rate rising from 56.8% to 42.7%.
- South Asia reduced poverty rate from 50.6% to 18.8%, although the number of poor was still high at 309 million in 2012.
Poverty Gap Analysis
- Poverty gap at $1.90/day in 2012 indicated significant disparities across regions:
- East Asia and Pacific had a poverty gap of 1.47%, while Sub-Saharan Africa faced a gap of 16.47%.
- Low income countries experienced a poverty gap of 18.6%.
- Lower middle-income countries maintained a poverty gap of 4.69%.
Sustainable Development Goals
- Target to eliminate extreme poverty by 2030 hinges on growth rates aligned with initial poverty rates.
- Growth rate exceeding 2% required if population grows at 2% to improve per capita income.
Tackling Grassroots Poverty
- World Bank strategy emphasizes expanding assets for the poor to enhance returns.
- Focuses on empowering poor through participation, eliminating discrimination, and ensuring accountability of institutions.
- Calls for providing insurance against economic shocks and disasters.
Population Growth Challenges
- Rapid population growth (>2% annually) predominantly occurs in poorer countries, leading to various socio-economic issues.
- Young age distribution adds pressure to economies, affecting food supply, employment, and resource allocation.
- Cycle of poverty perpetuated by high birth rates and limited resources for upbringing.
Commodity Dependency Issues
- Countries reliant on primary commodities face long-term trade deterioration and macroeconomic instability.
- Such economies often experience balance of payments problems and economic slowdowns, otherwise termed the "curse of natural resources."
Institutional Weakness
- Weak institutional frameworks are central to underdevelopment and high unemployment rates.
- Structural unemployment can arise if growth mechanisms fail to harmonize.
Neoclassical Growth Model Insights
- Solow's neoclassical growth model suggests economies will eventually converge towards a natural growth rate.
- Models predict faster capital growth allows for more capital-intensive technologies, whereas faster labor growth leads to more labor-intensive ones.
- Convergence in per capita incomes expected as poorer nations grow faster due to higher marginal returns on capital.
Production Function and Growth Analysis
- Neoclassical production function connects output with labor, capital, and technical progress, revealing contributions of various inputs to growth.
- Studies differentiate developed from developing countries, highlighting capital's more significant role in developing scenarios.
- World Bank emphasizes that lasting growth in successful countries correlates with high savings, investment, and effective policies.
Learning Outcomes
- Understand classical economist perspectives on growth.
- Familiarity with Harrod-Domar and Solow models.
- Comprehend the use of production functions in analyzing growth factors.
- Recognize causes for diverging living standards based on new growth theories.
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Description
Explore the variations in income levels and their impact on food security across different countries. This quiz will draw on key statistics from the Economics of Development chapter, focusing on absolute poverty and related data from 1990 to 2012.