TEST BANK for Economic Development 13th
Edition by Michael Todaro, Stephen Smith
Complete Chapters 1-15| Appendix Exam Included|
Verified Q&As| A+ PASS
Page | 1
, Chapter 1: Introducing Economic Development: A Global Perspective
Key Concepts
As curious as students who register to take Development Economics may be, their knowledge and
experience of the developing world will vary widely. The first main point of Chapter 1 is to emphasise
how different life in the developing world is. New in the 13th edition is a systematic description of four
stylised strata of living standards from extreme poverty to rich based on Rosling,
Rosling, and Rosling Ronnlund‘s book Factfulness. This is followed by a discussion of the World Bank‘s
classification of economies by ranges of average national income using gross national income (GNI)
statistics.
The second point is to provide an overview of the nature of development economics as a field. A defense
of development economics as a distinct field, rather than an agglomeration of other economics subfields,
is offered. A major theme of the book, that development economics must encompass the study of
institutional and social, as well as economic, mechanisms for modernising an economy while eliminating
absolute poverty, is introduced.
Sections 1.5 and 1.6 looks deeper into the meaning of development and a view of development that is
multidimensional. Amartya Sen‘s ―Capabilities‖ approach is discussed in Section 1.5. In Section 1.6, data
collected in a Gallup World Poll on the relationship between happiness (as measured by Gallup‘s
life satisfaction ―ladder‖ question and real per capita income) and other research on happiness/life
satisfaction is discussed. The level of happiness is not only related to level of income but to other factors
such as democratic freedoms and the quality of social relationships. The role of normative
values in development economics—a subject dealing with human misery and human potential, with
equity as well as efficiency, with cultural change that causes losses as well as gains, and with transfer
as well as creation of wealth—is also stressed.
The conclusion is that development is both a physical reality and a state of mind. The meaning and
objectives of development include the provision of basic needs, reducing inequality, raising living
standards through appropriate economic growth, improving self-esteem in relation to the developed
countries, and expanding freedom of choice in the market and beyond.
Section 1.7 presents an in depth examination of the UN‘s Sustainable Development Goals (SDGs). This
includes a more comprehensive list of the goals themselves (appearing in Table 1.1) and a discussion of
the shortcomings of the SDGs. In Section 1.8, the plan of the book is introduced through 32 critical
questions of development economics. Depending on the amount of material
covered by the instructor, students should be able to intelligently address most of these questions by the
end of the course. Finally, a comparative case study of Pakistan and Bangladesh is presented.
Page | 2
,Lecture Suggestions
It might be best to begin with a discussion of the immense scale of transformation in the world
economy. The late Hans Rosling‘s video ―200 countries, 200 years, 4 minutes‖ (readily available on
YouTube) can be used to confirm this point in an entertaining way. It might also be helpful to highlight
that real gross world product per capita has almost tripled between 1960 and 2018 (implying growth per
year of 1.85%) and is 33% higher than it was at the turn of this century
(implying annual growth of 1.56% from 2000 to 2018). This data can be found on the Saint Louis Federal
Reserve‘s website in the Federal Reserve Economic Database (or FRED).
Despite such advances, tremendous disparities continue to exist. In terms of easily accessible statistics the
PEW Research Centre‘s ―World Population by Income‖ provides an interactive map
showing the share of economies‘ population who are economically poor, low income, middle income,
upper middle income, and high income. While regrettably the data provided is for 2011, it
echoes what Todaro and Smith point out in the text, that more than 75% of the world‘s population live on
$15 or less a day (or about $5,500 per person per year). Several excellent books attempt to give some idea
of the range of living standards found throughout the world. For example, The Material World by Peter
Menzell. This book presents photographic profiles of typical families
around the world with all of their possessions placed in front of their homes. As one goes from one family
to the next the instructor has the opportunity to highlight the important differences between nations and
regions and to touch on key issues of growth and development.
One of the key strengths of this chapter is that it does not focus solely on the hard numbers that
supposedly measure development. The discussion of Sen‘s Capabilities approach and the far less than
perfect relationship between income and happiness are well worth spending a fair amount of class time
exploring. Class time should also be spent discussing the 32 critical questions listed on
pages 21–23 of the text and then asking students to identify 3 or 4 questions that they are particularly
interested in exploring. Asking each student to list what they consider to be ―critically‖ critical questions
on a sheet of paper, collecting their responses, and then trying to direct the rest of the term to addressing
the most commonly mentioned critical questions for that class will be helpful
in further drawing students in and holding their attention throughout the term.
At this same point, the instructor might also wish to get some idea of students‘ experiences traveling to
developing countries and, in as subtle a way as is possible, determine how shaky their understanding of
the wider world is. The instructor perhaps could draw on his or her own experiences and give some
background as to how he or she first became interested in Development
Page | 3
, Economics. This may – through the kinds of questions asked – help the instructor further gauge students‘
level of sophistication in this area. This is not something that should be or, can, be settled in the first one
or two classes and will develop over the course of the term.
In many universities, the economic development course will be filled with students who are not majoring
in economics. These students may come from different colleges with majors such as anthropology,
sociology, or political science or business (management, finance, etc.). They may have had as little as one
semester of introductory economics. Given that you are teaching an economics class, you may wish to
remind the students of this fact and offer whatever help you can. Given video capture software, you might
consider recording some primers that then could be made available to students through course
management software such as Blackboard or Moodle. You certainly should use the first class or two to set
the stage for the approach you will take, whether it will be more interdisciplinary, more economic, more
mathematical and quantitative, more historical, or some combination.
Emphasise that development economics is an exciting subject to study and teach because it does not focus
just on one country, but on all less-developed countries. Further emphasise that you will try to teach key
concepts and ideas which can be applied to the experiences of many developing countries. These concepts
and ideas are important for understanding where the developing countries are today, as well as what their
options are for the future. You might also wish to emphasise that there arguably is no other area of
economics that is more relevant to the majority of the world‘s people.
As already mentioned, the 32 critical questions can be used to motivate student interest in the subject as
well as present an overview of what the class is all about. It can be emphasised that there is no one answer
to the general question of why some countries are more developed than others. There are as many
different opinions on what a less-developed country should do to become more developed. A good
approach is to present differing viewpoints throughout the course and let the students make up their minds
on their own.
Discussion Topics
Encouraging class participation is a good way to motivate the students and make them feel involved in the
learning process. The first few weeks of class in particular are conducive to this sort of exercise. Two
ideas for discussions at this stage are:
• What is the meaning of economic development? Why do we not see a stronger relationship
between income and happiness, especially once income has risen above $20,000 a year per person?
• Is it possible for the whole world to be developed? This can be an interesting question to ask at
the beginning of the course, once environment and development have been covered (Chapter 10), and
then again at the end of the course.
Page | 4
Edition by Michael Todaro, Stephen Smith
Complete Chapters 1-15| Appendix Exam Included|
Verified Q&As| A+ PASS
Page | 1
, Chapter 1: Introducing Economic Development: A Global Perspective
Key Concepts
As curious as students who register to take Development Economics may be, their knowledge and
experience of the developing world will vary widely. The first main point of Chapter 1 is to emphasise
how different life in the developing world is. New in the 13th edition is a systematic description of four
stylised strata of living standards from extreme poverty to rich based on Rosling,
Rosling, and Rosling Ronnlund‘s book Factfulness. This is followed by a discussion of the World Bank‘s
classification of economies by ranges of average national income using gross national income (GNI)
statistics.
The second point is to provide an overview of the nature of development economics as a field. A defense
of development economics as a distinct field, rather than an agglomeration of other economics subfields,
is offered. A major theme of the book, that development economics must encompass the study of
institutional and social, as well as economic, mechanisms for modernising an economy while eliminating
absolute poverty, is introduced.
Sections 1.5 and 1.6 looks deeper into the meaning of development and a view of development that is
multidimensional. Amartya Sen‘s ―Capabilities‖ approach is discussed in Section 1.5. In Section 1.6, data
collected in a Gallup World Poll on the relationship between happiness (as measured by Gallup‘s
life satisfaction ―ladder‖ question and real per capita income) and other research on happiness/life
satisfaction is discussed. The level of happiness is not only related to level of income but to other factors
such as democratic freedoms and the quality of social relationships. The role of normative
values in development economics—a subject dealing with human misery and human potential, with
equity as well as efficiency, with cultural change that causes losses as well as gains, and with transfer
as well as creation of wealth—is also stressed.
The conclusion is that development is both a physical reality and a state of mind. The meaning and
objectives of development include the provision of basic needs, reducing inequality, raising living
standards through appropriate economic growth, improving self-esteem in relation to the developed
countries, and expanding freedom of choice in the market and beyond.
Section 1.7 presents an in depth examination of the UN‘s Sustainable Development Goals (SDGs). This
includes a more comprehensive list of the goals themselves (appearing in Table 1.1) and a discussion of
the shortcomings of the SDGs. In Section 1.8, the plan of the book is introduced through 32 critical
questions of development economics. Depending on the amount of material
covered by the instructor, students should be able to intelligently address most of these questions by the
end of the course. Finally, a comparative case study of Pakistan and Bangladesh is presented.
Page | 2
,Lecture Suggestions
It might be best to begin with a discussion of the immense scale of transformation in the world
economy. The late Hans Rosling‘s video ―200 countries, 200 years, 4 minutes‖ (readily available on
YouTube) can be used to confirm this point in an entertaining way. It might also be helpful to highlight
that real gross world product per capita has almost tripled between 1960 and 2018 (implying growth per
year of 1.85%) and is 33% higher than it was at the turn of this century
(implying annual growth of 1.56% from 2000 to 2018). This data can be found on the Saint Louis Federal
Reserve‘s website in the Federal Reserve Economic Database (or FRED).
Despite such advances, tremendous disparities continue to exist. In terms of easily accessible statistics the
PEW Research Centre‘s ―World Population by Income‖ provides an interactive map
showing the share of economies‘ population who are economically poor, low income, middle income,
upper middle income, and high income. While regrettably the data provided is for 2011, it
echoes what Todaro and Smith point out in the text, that more than 75% of the world‘s population live on
$15 or less a day (or about $5,500 per person per year). Several excellent books attempt to give some idea
of the range of living standards found throughout the world. For example, The Material World by Peter
Menzell. This book presents photographic profiles of typical families
around the world with all of their possessions placed in front of their homes. As one goes from one family
to the next the instructor has the opportunity to highlight the important differences between nations and
regions and to touch on key issues of growth and development.
One of the key strengths of this chapter is that it does not focus solely on the hard numbers that
supposedly measure development. The discussion of Sen‘s Capabilities approach and the far less than
perfect relationship between income and happiness are well worth spending a fair amount of class time
exploring. Class time should also be spent discussing the 32 critical questions listed on
pages 21–23 of the text and then asking students to identify 3 or 4 questions that they are particularly
interested in exploring. Asking each student to list what they consider to be ―critically‖ critical questions
on a sheet of paper, collecting their responses, and then trying to direct the rest of the term to addressing
the most commonly mentioned critical questions for that class will be helpful
in further drawing students in and holding their attention throughout the term.
At this same point, the instructor might also wish to get some idea of students‘ experiences traveling to
developing countries and, in as subtle a way as is possible, determine how shaky their understanding of
the wider world is. The instructor perhaps could draw on his or her own experiences and give some
background as to how he or she first became interested in Development
Page | 3
, Economics. This may – through the kinds of questions asked – help the instructor further gauge students‘
level of sophistication in this area. This is not something that should be or, can, be settled in the first one
or two classes and will develop over the course of the term.
In many universities, the economic development course will be filled with students who are not majoring
in economics. These students may come from different colleges with majors such as anthropology,
sociology, or political science or business (management, finance, etc.). They may have had as little as one
semester of introductory economics. Given that you are teaching an economics class, you may wish to
remind the students of this fact and offer whatever help you can. Given video capture software, you might
consider recording some primers that then could be made available to students through course
management software such as Blackboard or Moodle. You certainly should use the first class or two to set
the stage for the approach you will take, whether it will be more interdisciplinary, more economic, more
mathematical and quantitative, more historical, or some combination.
Emphasise that development economics is an exciting subject to study and teach because it does not focus
just on one country, but on all less-developed countries. Further emphasise that you will try to teach key
concepts and ideas which can be applied to the experiences of many developing countries. These concepts
and ideas are important for understanding where the developing countries are today, as well as what their
options are for the future. You might also wish to emphasise that there arguably is no other area of
economics that is more relevant to the majority of the world‘s people.
As already mentioned, the 32 critical questions can be used to motivate student interest in the subject as
well as present an overview of what the class is all about. It can be emphasised that there is no one answer
to the general question of why some countries are more developed than others. There are as many
different opinions on what a less-developed country should do to become more developed. A good
approach is to present differing viewpoints throughout the course and let the students make up their minds
on their own.
Discussion Topics
Encouraging class participation is a good way to motivate the students and make them feel involved in the
learning process. The first few weeks of class in particular are conducive to this sort of exercise. Two
ideas for discussions at this stage are:
• What is the meaning of economic development? Why do we not see a stronger relationship
between income and happiness, especially once income has risen above $20,000 a year per person?
• Is it possible for the whole world to be developed? This can be an interesting question to ask at
the beginning of the course, once environment and development have been covered (Chapter 10), and
then again at the end of the course.
Page | 4
