,TEST BANK Economic Development 13/E Michael Todaro
m m m m m m
Chapter 1: Introducing Economic
m m m
m Development: A Global Perspective
m m m
◼ Key Concepts
m
As mcurious mas mstudents mwho mregister mto mtake mDevelopment mEconomics mmay mbe, mtheir
mknowledge mand mexperience mof mthe mdeveloping mworld mwill mvary mwidely. mThe mfirst mmain mpoint
mof mChapter m1 mis mto memphasise mhow mdifferent mlife min mthe mdeveloping mworld mis. mNew min mthe
m13th medition mis ma msystematic mdescription mof mfour mstylised mstrata mof mliving mstandards mfrom
mextreme mpoverty mto mrich mbased mon mRosling,
Rosling, mand mRosling mRonnlund’s mbook mFactfulness. mThis mis mfollowed mby ma mdiscussion mof mthe
mWorld mBank’s mclassification mof meconomies mby mranges mof maverage mnational mincome musing mgross
mnational mincome m(GNI) mstatistics.
The msecond mpoint mis mto mprovide man moverview mof mthe mnature mof mdevelopment meconomics mas ma
mfield. mA mdefense mof mdevelopment meconomics mas ma mdistinct mfield, mrather mthan man magglomeration
mof mother meconomics msubfields, mis moffered. mA mmajor mtheme mof mthe mbook, mthat mdevelopment
meconomics mmust mencompass mthe mstudy mof minstitutional mand msocial, mas mwell mas meconomic,
mmechanisms mfor mmodernising man meconomy mwhile meliminating mabsolute mpoverty, mis mintroduced.
Sections m1.5 mand m1.6 mlooks mdeeper minto mthe mmeaning mof mdevelopment mand ma mview mof mdevelopment
mthat mis mmultidimensional. mAmartya mSen’s m“Capabilities” mapproach mis mdiscussed min mSection m1.5.
mIn mSection m1.6, mdata mcollected min ma mGallup mWorld mPoll mon mthe mrelationship mbetween mhappiness m(as
mmeasured mby mGallup’s
life msatisfaction m“ladder” mquestion mand mreal mper mcapita mincome) mand mother mresearch mon
mhappiness/life msatisfaction mis mdiscussed. mThe mlevel mof mhappiness mis mnot monly mrelated mto mlevel mof
mincome mbut mto mother mfactors m such m as m democratic m freedoms m and m the m quality m of m social
m relationships. m The m role m of m normative
values min mdevelopment meconomics—a msubject mdealing mwith mhuman mmisery mand mhuman
mpotential, mwith mequity mas mwell mas mefficiency, mwith mcultural mchange mthat mcauses mlosses mas mwell mas
mgains, mand mwith mtransfer
as mwell mas mcreation mof mwealth—is malso mstressed.
The mconclusion mis mthat mdevelopment mis mboth ma mphysical mreality mand ma mstate mof mmind. mThe
mmeaning mand mobjectives mof mdevelopment minclude mthe mprovision mof mbasic mneeds, mreducing
minequality, mraising mliving mstandards mthrough mappropriate meconomic mgrowth, mimproving mself-
esteem min mrelation mto mthe mdeveloped mcountries, mand mexpanding mfreedom mof mchoice min mthe
mmarket mand mbeyond.
Section m1.7 mpresents man min mdepth mexamination mof mthe mUN’s mSustainable mDevelopment mGoals
m(SDGs). mThis mincludes ma mmore mcomprehensive mlist mof mthe mgoals mthemselves m(appearing min
mTable m1.1) mand ma mdiscussion mof mthe mshortcomings mof mthe mSDGs. mIn mSection m1.8, mthe mplan mof
mthe mbook mis mintroduced mthrough m 32 m critical m questions m of m development m economics.
m Depending m on m the m amount m of m material
covered mby mthe minstructor, mstudents mshould mbe mable mto mintelligently maddress mmost mof mthese
mquestions mby mthe mend mof mthe mcourse. mFinally, ma mcomparative mcase mstudy mof mPakistan mand
mBangladesh mis mpresented.
, Todaro mand mSmith, mEconomic mDevelopment, m13e, mInstructor’s
mManual
◼ Lecture Suggestions
m
It m might m be m best m to m begin m with m a m discussion m of m the m immense m scale m of m transformation m in m the
m world
economy. mThe mlate mHans mRosling’s mvideo m“200 mcountries, m200 myears, m4 mminutes” m(readily
mavailable mon mYouTube) mcan mbe mused mto mconfirm mthis mpoint min man mentertaining mway. mIt mmight
malso mbe mhelpful mto mhighlight mthat mreal mgross mworld mproduct mper mcapita mhas malmost mtripled
mbetween m1960 mand m2018 m(implying m growth m per m year m of m 1.85%) m and m is m 33% m higher
m than m it m was m at m the m turn m of m this m century
(implying mannual mgrowth mof m1.56% mfrom m2000 mto m2018). mThis mdata mcan mbe mfound mon mthe mSaint
mLouis mFederal mReserve’s mwebsite min mthe mFederal mReserve mEconomic mDatabase m(or mFRED).
Despite msuch madvances, mtremendous mdisparities mcontinue mto mexist. mIn mterms mof measily maccessible
mstatistics m the m PEW m Research m Centre’s m “World m Population m by m Income” m provides m an
m interactive m map
showing mthe mshare mof meconomies’ mpopulation mwho mare meconomically mpoor, mlow mincome, mmiddle
mincome, m upper m middle m income, m and m high m income. m While m regrettably m the m data m provided m is m for
m 2011, m it
echoes mwhat mTodaro mand mSmith mpoint mout min mthe mtext, mthat mmore mthan m75% mof mthe mworld’s
mpopulation mlive mon m$15 mor mless ma mday m(or mabout m$5,500 mper mperson mper myear). mSeveral
mexcellent mbooks mattempt mto mgive msome midea mof mthe mrange mof mliving mstandards mfound mthroughout
mthe mworld. mFor mexample, mThe mMaterial m World m by m Peter m Menzell. m This m book m presents
m photographic m profiles m of m typical m families
around mthe mworld mwith mall mof mtheir mpossessions mplaced min mfront mof mtheir mhomes. mAs mone mgoes
mfrom mone mfamily mto mthe mnext mthe minstructor mhas mthe mopportunity mto mhighlight mthe mimportant
mdifferences mbetween mnations mand mregions mand mto mtouch mon mkey missues mof mgrowth mand
mdevelopment.
One m of m the m key m strengths m of m this m chapter m is m that m it m does m not m focus m solely m on m the m hard m numbers
m that
supposedly mmeasure mdevelopment. mThe mdiscussion mof mSen’s mCapabilities mapproach mand mthe mfar
mless mthan mperfect mrelationship mbetween mincome mand mhappiness mare mwell mworth mspending ma mfair
mamount mof mclass m time m exploring. m Class m time m should m also m be m spent m discussing m the m 32
m critical m questions m listed m on
pages m21–23 mof mthe mtext mand mthen masking mstudents m to midentify m3 mor m4 mquestions mthat mthey mare
mparticularly minterested min mexploring. mAsking meach mstudent mto mlist mwhat mthey mconsider mto mbe
m“critically” mcritical mquestions mon ma msheet mof mpaper, mcollecting mtheir mresponses, mand mthen mtrying
mto mdirect mthe mrest mof mthe mterm mto maddressing mthe mmost mcommonly mmentioned mcritical mquestions
mfor mthat mclass mwill mbe mhelpful
in mfurther mdrawing mstudents min mand mholding mtheir mattention mthroughout mthe mterm.
At mthis msame mpoint, mthe minstructor mmight malso mwish mto mget msome midea mof mstudents’ mexperiences
m traveling mto mdeveloping mcountries mand, min mas msubtle ma mway mas mis mpossible, mdetermine mhow
mshaky mtheir munderstanding mof mthe mwider mworld mis. mThe minstructor mperhaps mcould mdraw mon mhis
mor mher mown mexperiences m and m give m some m background m as m to m how mhe m or m she m first m became
m interested m in m Development
Economics. mThis mmay m– mthrough mthe mkinds mof mquestions masked m– mhelp mthe minstructor mfurther
mgauge mstudents’ mlevel mof msophistication min mthis marea. mThis mis mnot msomething mthat mshould mbe mor,
mcan, mbe msettled min mthe mfirst mone mor mtwo mclasses mand mwill mdevelop mover mthe mcourse mof mthe mterm.
In mmany muniversities, mthe meconomic mdevelopment mcourse mwill mbe mfilled mwith mstudents mwho mare
mnot mmajoring min meconomics. mThese mstudents mmay mcome mfrom mdifferent mcolleges mwith mmajors
msuch mas manthropology, msociology, mor mpolitical mscience mor mbusiness m(management, mfinance, metc.).
mThey mmay mhave mhad mas mlittle mas mone msemester mof mintroductory meconomics. mGiven mthat myou mare
, Todaro mand mSmith, mEconomic mDevelopment, m13e, mInstructor’s
mteaching man meconomics
mManualmclass, myou mmay mwish mto mremind mthe mstudents mof mthis mfact mand moffer
mwhatever mhelp myou mcan. mGiven mvideo mcapture msoftware, myou mmight mconsider mrecording msome
mprimers mthat mthen mcould mbe mmade mavailable m to m students m through m course m management
m software m such m as m Blackboard m or m Moodle. m You
m m m m m m
Chapter 1: Introducing Economic
m m m
m Development: A Global Perspective
m m m
◼ Key Concepts
m
As mcurious mas mstudents mwho mregister mto mtake mDevelopment mEconomics mmay mbe, mtheir
mknowledge mand mexperience mof mthe mdeveloping mworld mwill mvary mwidely. mThe mfirst mmain mpoint
mof mChapter m1 mis mto memphasise mhow mdifferent mlife min mthe mdeveloping mworld mis. mNew min mthe
m13th medition mis ma msystematic mdescription mof mfour mstylised mstrata mof mliving mstandards mfrom
mextreme mpoverty mto mrich mbased mon mRosling,
Rosling, mand mRosling mRonnlund’s mbook mFactfulness. mThis mis mfollowed mby ma mdiscussion mof mthe
mWorld mBank’s mclassification mof meconomies mby mranges mof maverage mnational mincome musing mgross
mnational mincome m(GNI) mstatistics.
The msecond mpoint mis mto mprovide man moverview mof mthe mnature mof mdevelopment meconomics mas ma
mfield. mA mdefense mof mdevelopment meconomics mas ma mdistinct mfield, mrather mthan man magglomeration
mof mother meconomics msubfields, mis moffered. mA mmajor mtheme mof mthe mbook, mthat mdevelopment
meconomics mmust mencompass mthe mstudy mof minstitutional mand msocial, mas mwell mas meconomic,
mmechanisms mfor mmodernising man meconomy mwhile meliminating mabsolute mpoverty, mis mintroduced.
Sections m1.5 mand m1.6 mlooks mdeeper minto mthe mmeaning mof mdevelopment mand ma mview mof mdevelopment
mthat mis mmultidimensional. mAmartya mSen’s m“Capabilities” mapproach mis mdiscussed min mSection m1.5.
mIn mSection m1.6, mdata mcollected min ma mGallup mWorld mPoll mon mthe mrelationship mbetween mhappiness m(as
mmeasured mby mGallup’s
life msatisfaction m“ladder” mquestion mand mreal mper mcapita mincome) mand mother mresearch mon
mhappiness/life msatisfaction mis mdiscussed. mThe mlevel mof mhappiness mis mnot monly mrelated mto mlevel mof
mincome mbut mto mother mfactors m such m as m democratic m freedoms m and m the m quality m of m social
m relationships. m The m role m of m normative
values min mdevelopment meconomics—a msubject mdealing mwith mhuman mmisery mand mhuman
mpotential, mwith mequity mas mwell mas mefficiency, mwith mcultural mchange mthat mcauses mlosses mas mwell mas
mgains, mand mwith mtransfer
as mwell mas mcreation mof mwealth—is malso mstressed.
The mconclusion mis mthat mdevelopment mis mboth ma mphysical mreality mand ma mstate mof mmind. mThe
mmeaning mand mobjectives mof mdevelopment minclude mthe mprovision mof mbasic mneeds, mreducing
minequality, mraising mliving mstandards mthrough mappropriate meconomic mgrowth, mimproving mself-
esteem min mrelation mto mthe mdeveloped mcountries, mand mexpanding mfreedom mof mchoice min mthe
mmarket mand mbeyond.
Section m1.7 mpresents man min mdepth mexamination mof mthe mUN’s mSustainable mDevelopment mGoals
m(SDGs). mThis mincludes ma mmore mcomprehensive mlist mof mthe mgoals mthemselves m(appearing min
mTable m1.1) mand ma mdiscussion mof mthe mshortcomings mof mthe mSDGs. mIn mSection m1.8, mthe mplan mof
mthe mbook mis mintroduced mthrough m 32 m critical m questions m of m development m economics.
m Depending m on m the m amount m of m material
covered mby mthe minstructor, mstudents mshould mbe mable mto mintelligently maddress mmost mof mthese
mquestions mby mthe mend mof mthe mcourse. mFinally, ma mcomparative mcase mstudy mof mPakistan mand
mBangladesh mis mpresented.
, Todaro mand mSmith, mEconomic mDevelopment, m13e, mInstructor’s
mManual
◼ Lecture Suggestions
m
It m might m be m best m to m begin m with m a m discussion m of m the m immense m scale m of m transformation m in m the
m world
economy. mThe mlate mHans mRosling’s mvideo m“200 mcountries, m200 myears, m4 mminutes” m(readily
mavailable mon mYouTube) mcan mbe mused mto mconfirm mthis mpoint min man mentertaining mway. mIt mmight
malso mbe mhelpful mto mhighlight mthat mreal mgross mworld mproduct mper mcapita mhas malmost mtripled
mbetween m1960 mand m2018 m(implying m growth m per m year m of m 1.85%) m and m is m 33% m higher
m than m it m was m at m the m turn m of m this m century
(implying mannual mgrowth mof m1.56% mfrom m2000 mto m2018). mThis mdata mcan mbe mfound mon mthe mSaint
mLouis mFederal mReserve’s mwebsite min mthe mFederal mReserve mEconomic mDatabase m(or mFRED).
Despite msuch madvances, mtremendous mdisparities mcontinue mto mexist. mIn mterms mof measily maccessible
mstatistics m the m PEW m Research m Centre’s m “World m Population m by m Income” m provides m an
m interactive m map
showing mthe mshare mof meconomies’ mpopulation mwho mare meconomically mpoor, mlow mincome, mmiddle
mincome, m upper m middle m income, m and m high m income. m While m regrettably m the m data m provided m is m for
m 2011, m it
echoes mwhat mTodaro mand mSmith mpoint mout min mthe mtext, mthat mmore mthan m75% mof mthe mworld’s
mpopulation mlive mon m$15 mor mless ma mday m(or mabout m$5,500 mper mperson mper myear). mSeveral
mexcellent mbooks mattempt mto mgive msome midea mof mthe mrange mof mliving mstandards mfound mthroughout
mthe mworld. mFor mexample, mThe mMaterial m World m by m Peter m Menzell. m This m book m presents
m photographic m profiles m of m typical m families
around mthe mworld mwith mall mof mtheir mpossessions mplaced min mfront mof mtheir mhomes. mAs mone mgoes
mfrom mone mfamily mto mthe mnext mthe minstructor mhas mthe mopportunity mto mhighlight mthe mimportant
mdifferences mbetween mnations mand mregions mand mto mtouch mon mkey missues mof mgrowth mand
mdevelopment.
One m of m the m key m strengths m of m this m chapter m is m that m it m does m not m focus m solely m on m the m hard m numbers
m that
supposedly mmeasure mdevelopment. mThe mdiscussion mof mSen’s mCapabilities mapproach mand mthe mfar
mless mthan mperfect mrelationship mbetween mincome mand mhappiness mare mwell mworth mspending ma mfair
mamount mof mclass m time m exploring. m Class m time m should m also m be m spent m discussing m the m 32
m critical m questions m listed m on
pages m21–23 mof mthe mtext mand mthen masking mstudents m to midentify m3 mor m4 mquestions mthat mthey mare
mparticularly minterested min mexploring. mAsking meach mstudent mto mlist mwhat mthey mconsider mto mbe
m“critically” mcritical mquestions mon ma msheet mof mpaper, mcollecting mtheir mresponses, mand mthen mtrying
mto mdirect mthe mrest mof mthe mterm mto maddressing mthe mmost mcommonly mmentioned mcritical mquestions
mfor mthat mclass mwill mbe mhelpful
in mfurther mdrawing mstudents min mand mholding mtheir mattention mthroughout mthe mterm.
At mthis msame mpoint, mthe minstructor mmight malso mwish mto mget msome midea mof mstudents’ mexperiences
m traveling mto mdeveloping mcountries mand, min mas msubtle ma mway mas mis mpossible, mdetermine mhow
mshaky mtheir munderstanding mof mthe mwider mworld mis. mThe minstructor mperhaps mcould mdraw mon mhis
mor mher mown mexperiences m and m give m some m background m as m to m how mhe m or m she m first m became
m interested m in m Development
Economics. mThis mmay m– mthrough mthe mkinds mof mquestions masked m– mhelp mthe minstructor mfurther
mgauge mstudents’ mlevel mof msophistication min mthis marea. mThis mis mnot msomething mthat mshould mbe mor,
mcan, mbe msettled min mthe mfirst mone mor mtwo mclasses mand mwill mdevelop mover mthe mcourse mof mthe mterm.
In mmany muniversities, mthe meconomic mdevelopment mcourse mwill mbe mfilled mwith mstudents mwho mare
mnot mmajoring min meconomics. mThese mstudents mmay mcome mfrom mdifferent mcolleges mwith mmajors
msuch mas manthropology, msociology, mor mpolitical mscience mor mbusiness m(management, mfinance, metc.).
mThey mmay mhave mhad mas mlittle mas mone msemester mof mintroductory meconomics. mGiven mthat myou mare
, Todaro mand mSmith, mEconomic mDevelopment, m13e, mInstructor’s
mteaching man meconomics
mManualmclass, myou mmay mwish mto mremind mthe mstudents mof mthis mfact mand moffer
mwhatever mhelp myou mcan. mGiven mvideo mcapture msoftware, myou mmight mconsider mrecording msome
mprimers mthat mthen mcould mbe mmade mavailable m to m students m through m course m management
m software m such m as m Blackboard m or m Moodle. m You
