ECON 340 QUESTIONS AND VERIFIED ANSWERS
Development economics - Answers - Is a part of economics in being concerned with the
efficient allocation of scarce (or idle) productive resources and their growth over time.
What does development economics focus on - Answers - social, political, and
institutional mechanisms, both private and public, necessary to create rapid, large scale
improvements in living standards
so necessity must pay attention not only to the economic, but also cultural and political
requirements for making structural and institutional changes that will most efficiently
bring the gains of economic progress to a coutries population.
how is development economics indentify things that are problems, - Answers - Its based
on judgement and, how people define the good life, etc
Common metrics of development - Answers - -GNI or GDP
-absolute poverty rates, or degrees of relative inequality
-unemployment
-the widely held views of people that life is materially and spiritually better, or that they
are 'happy' or 'satisfied' with life (though happiness may ≠ what we value, e.g.
addictions)
-health and education indicators
-social inclusion and empowerment of vulnerable groups
GNI - Answers - GNI adds in income residents receive from abroad for labour or capital
(including remittances), then subtracts similar payments made to non-residents who
contribute to the local economy. GNI thus measures how much of real goods and
services is available to a country's average citizen for consumption and investment.
Development economist Amartya Sen has tried to define 'the good life' - Answers - as
being well: being healthy, well nourished, well clothed, literate, long-lived, being able to
take part in the life of the community, being mobile, and having freedom of choice
regarding what one can become and do.
Todaro and Smith Summarise the core values of development as - Answers - a.
Sustenance - the ability to meet basic needs (food, shelter, health, protection)
b. Self-esteem - people having a sense of worth and self-respect
c. Freedom from servitude - freedom to choose (which wealth facilitates)
Is GDP a Reasonable Proxy For More Comprehensive Metrics of Development -
Answers - -there is a Postive correlation between log GDP and many of the above
metrics of development.
, -however its hard to get a perfect correlation with counties around the world varying
vastly.
not perfect, but pretty good estimate, need to use another measure.
Underdeveloped - Answers - Is not being able to participate in part of the community.
Development economics has been driven - Answers - by problems which the world
faces such as poverty and poor countries.
Comparing disparities between countries. - Answers - often compared to life expectancy
undernourishment, child mortality, women's and men's literacy etc
developing countries commonly refer - Answers - Africa; the Middle East; Asia except
for Japan, South Korea, few other countries; Latin America and the Caribbean;
transition countries of eastern Europe and central Asia from the former Soviet
developed countries - Answers - Western Europe, North America, Australia and New
Zealand, Japan, South Korea, & Singapore
common ways of classifying specific countries - Answers - are the World Bank's GNI per
capita above, or the United Nation's Development Programme's Human Development
Index
Purchasing Power Parity - Answers - rather than using the official exchange rate to
convert (say) Indian GNI in rupees to US dollars, economists often use "purchasing
power parit
Human Development Index HDI - Answers - The UN Development Programme created
the HDI index as a weighted average of three things, namely the people in a country's
average:
3 factors involved in the HDI - Answers - 1) life span: each country's life expectancy at
birth, as proxy for overall health
2) education: adult literacy + school enrolment ratio,
3) income: PPP adjusted GDP per capita with assumption of "diminishing marginal utility
of income". (So more money brings more happiness, but at a decreasing rate.)
What is the scale used to classify human development - Answers - "low human
development" between 0-.49, 'medium' between .50-.79, 'high' between .80-.89, and
'very high' between .90-1.0.
HDI formula = - Answers - 1/3*(life expectancy index) + 1/3*(education index) +
1/3*(income index).
life expectancy index = - Answers - life expectancy at birthi - 25/ , target of 85 - 25
Development economics - Answers - Is a part of economics in being concerned with the
efficient allocation of scarce (or idle) productive resources and their growth over time.
What does development economics focus on - Answers - social, political, and
institutional mechanisms, both private and public, necessary to create rapid, large scale
improvements in living standards
so necessity must pay attention not only to the economic, but also cultural and political
requirements for making structural and institutional changes that will most efficiently
bring the gains of economic progress to a coutries population.
how is development economics indentify things that are problems, - Answers - Its based
on judgement and, how people define the good life, etc
Common metrics of development - Answers - -GNI or GDP
-absolute poverty rates, or degrees of relative inequality
-unemployment
-the widely held views of people that life is materially and spiritually better, or that they
are 'happy' or 'satisfied' with life (though happiness may ≠ what we value, e.g.
addictions)
-health and education indicators
-social inclusion and empowerment of vulnerable groups
GNI - Answers - GNI adds in income residents receive from abroad for labour or capital
(including remittances), then subtracts similar payments made to non-residents who
contribute to the local economy. GNI thus measures how much of real goods and
services is available to a country's average citizen for consumption and investment.
Development economist Amartya Sen has tried to define 'the good life' - Answers - as
being well: being healthy, well nourished, well clothed, literate, long-lived, being able to
take part in the life of the community, being mobile, and having freedom of choice
regarding what one can become and do.
Todaro and Smith Summarise the core values of development as - Answers - a.
Sustenance - the ability to meet basic needs (food, shelter, health, protection)
b. Self-esteem - people having a sense of worth and self-respect
c. Freedom from servitude - freedom to choose (which wealth facilitates)
Is GDP a Reasonable Proxy For More Comprehensive Metrics of Development -
Answers - -there is a Postive correlation between log GDP and many of the above
metrics of development.
, -however its hard to get a perfect correlation with counties around the world varying
vastly.
not perfect, but pretty good estimate, need to use another measure.
Underdeveloped - Answers - Is not being able to participate in part of the community.
Development economics has been driven - Answers - by problems which the world
faces such as poverty and poor countries.
Comparing disparities between countries. - Answers - often compared to life expectancy
undernourishment, child mortality, women's and men's literacy etc
developing countries commonly refer - Answers - Africa; the Middle East; Asia except
for Japan, South Korea, few other countries; Latin America and the Caribbean;
transition countries of eastern Europe and central Asia from the former Soviet
developed countries - Answers - Western Europe, North America, Australia and New
Zealand, Japan, South Korea, & Singapore
common ways of classifying specific countries - Answers - are the World Bank's GNI per
capita above, or the United Nation's Development Programme's Human Development
Index
Purchasing Power Parity - Answers - rather than using the official exchange rate to
convert (say) Indian GNI in rupees to US dollars, economists often use "purchasing
power parit
Human Development Index HDI - Answers - The UN Development Programme created
the HDI index as a weighted average of three things, namely the people in a country's
average:
3 factors involved in the HDI - Answers - 1) life span: each country's life expectancy at
birth, as proxy for overall health
2) education: adult literacy + school enrolment ratio,
3) income: PPP adjusted GDP per capita with assumption of "diminishing marginal utility
of income". (So more money brings more happiness, but at a decreasing rate.)
What is the scale used to classify human development - Answers - "low human
development" between 0-.49, 'medium' between .50-.79, 'high' between .80-.89, and
'very high' between .90-1.0.
HDI formula = - Answers - 1/3*(life expectancy index) + 1/3*(education index) +
1/3*(income index).
life expectancy index = - Answers - life expectancy at birthi - 25/ , target of 85 - 25
