Economic Growth and Development: Concepts and Theories

Question 1

The Human Development Index (HDI) is a composite measure that incorporates which of the following elements?

Accepted Answer

Life expectancy, education, and standard of living

Answer

Literacy rate and infant mortality only

Answer

Income inequality and population growth only

Answer

Gross Domestic Product (GDP) per capita only

Question 2

Which of the following is a distinguishing characteristic of a developed economy?

Accepted Answer

High income per capita and a diversified economic structure

Answer

Low economic growth rate

Answer

High unemployment rate

Question 3

Sustainable economic development emphasizes which key principle?

Accepted Answer

Economic growth should not compromise environmental sustainability

Answer

Economic growth should be pursued at all costs

Answer

Economic growth should focus solely on industrial development

Question 4

The 'Kuznets curve' theory suggests that income inequality:

Accepted Answer

Initially rises during the early stages of economic development

Answer

Is not related to economic development

Answer

Always falls as economic growth progresses

Question 5

Which of the following is NOT a commonly recognized challenge to achieving economic development?

Accepted Answer

Absence of corruption

Answer

Political instability

Answer

High levels of poverty

Question 6

According to the Solow growth model, the long-run equilibrium level of output per worker is primarily determined by:

Accepted Answer

Capital per worker, human capital, and technological progress

Answer

Government spending and the inflation rate

Answer

Natural resources and population growth

Question 7

A major criticism of neoclassical growth models is that they:

Accepted Answer

Assume perfect markets and downplay the role of institutions

Answer

Are overly complex to be applied in real-world situations

Answer

Overstate the importance of human capital

Question 8

The concept of 'growth accounting' involves:

Accepted Answer

Decomposing economic growth into contributions from capital, labor, and technological progress

Answer

Measuring the growth rate of GDP in different sectors

Answer

Estimating the future potential growth rate of an economy

Question 9

Which of the following is a primary goal of the United Nations Sustainable Development Goals?

Accepted Answer

Eradicating poverty and hunger

Answer

Reducing government debt

Answer

Maximizing economic growth

Question 10

Which of the following is the most precise indicator of economic growth?

Accepted Answer

GDP per capita

Answer

Population growth rate

Answer

Life expectancy

Answer

Human Development Index

Question 11

According to the Harrod-Domar model, which of the following determines the rate of economic growth in an economy?

Accepted Answer

Savings rate and capital-output ratio

Answer

Exchange rate and inflation rate

Answer

Government spending and population growth rate

Answer

Labor force size and technological progress

Question 12

Which of the following is a characteristic of sustainable economic development?

Accepted Answer

Conservation of natural resources and environmental protection

Answer

High levels of consumption and waste generation

Answer

Rapid industrialization and urbanization

Answer

Exploitation of labor and depletion of resources

Question 13

Which of the following is NOT a challenge to achieving economic growth and development in developing countries?

Accepted Answer

Abundant natural resources

Answer

Lack of infrastructure and skilled labor force

Answer

High levels of poverty and inequality

Answer

Political instability and corruption

Question 14

Which of the following policies is typically employed to promote economic growth in developed countries?

Accepted Answer

Investment in research and development

Answer

Currency devaluation

Answer

Protectionist trade policies

Answer

Fiscal austerity measures

Question 15

According to Rostow's Stages of Economic Growth theory, which of the following characteristics is associated with the 'Take-off' stage?

Accepted Answer

Rapid industrialization and urbanization

Answer

Subsistence agriculture and traditional technology

Answer

High levels of mass consumption and leisure

Answer

Stagnant economic growth and low productivity

Question 16

According to the Harrod-Domar model, what is the minimum rate of investment required for an economy to achieve a given rate of economic growth?

Accepted Answer

The incremental capital-output ratio multiplied by the desired growth rate

Answer

The average propensity to consume divided by the desired growth rate

Answer

The marginal propensity to save divided by the desired growth rate

Question 17

According to the Solow growth model, what is the main determinant of long-run economic growth?

Accepted Answer

Technological progress

Answer

Government spending

Answer

Capital accumulation

Answer

Natural resources

Question 18

Which of the following is a characteristic of developing countries?

Accepted Answer

Low per capita income

Answer

High levels of industrialization

Answer

Skilled labor force

Answer

Advanced infrastructure

Question 19

What is the main goal of economic development?

Accepted Answer

To improve the overall well-being and quality of life of a country's population.

Answer

To gain international recognition and power

Answer

To increase the GDP of a country

Question 20

Which of the following is a key factor in promoting economic development?

Accepted Answer

Education

Answer

High defense expenditure

Answer

Corruption

Answer

Political instability

Question 21

What is the difference between economic growth and economic development?

Accepted Answer

Economic growth is an increase in the total output of an economy, while economic development is a broader concept that includes improvements in living standards and quality of life.

Answer

Economic growth is only possible in developed countries, while economic development is only possible in developing countries.

Question 22

Which of the following is a criticism of the Human Development Index (HDI)?

Accepted Answer

It does not take into account income inequality.

Answer

It is not relevant to developed countries.

Answer

It is based solely on subjective data.

Answer

It is too complex to calculate.

Question 23

Which indicator measures the total value of all final goods and services produced in a country within a given year?

Accepted Answer

Gross Domestic Product (GDP)

Answer

Human Development Index (HDI)

Answer

Consumer Price Index (CPI)

Answer

Gross National Income (GNI)

Question 24

Which of the following is not considered a key driver of economic growth?

Accepted Answer

Political instability

Answer

Technological advancements

Answer

Abundance of natural resources

Answer

Investment in human capital

Question 25

What is the primary goal of sustainable economic development?

Accepted Answer

To meet the needs of the present population without compromising the ability of future generations to meet their own needs.

Answer

To solely maximize short-term economic growth

Question 26

Which of the following is a challenge associated with achieving economic growth in developing countries?

Accepted Answer

Deficiencies in infrastructure

Answer

Abundant natural resources

Answer

High levels of education

Answer

Political stability

Question 27

What is the distinction between economic growth and economic development?

Accepted Answer

Economic growth focuses on increasing the quantity of goods and services produced, while economic development encompasses improving living standards and overall well-being.

Answer

Economic growth requires increased capital investment, while economic development does not.

Question 28

Which indicator is not used to measure economic development?

Accepted Answer

Per capita income

Answer

Literacy rate

Answer

Life expectancy

Answer

Infant mortality rate

Question 29

In what way does human capital contribute to economic growth?

Accepted Answer

It enhances productivity, innovation, and the ability to adapt to changing economic conditions.

Answer

Human capital is only important in developed countries.

Answer

Human capital has no impact on economic growth.

Question 30

Which of the following measures income inequality?

Accepted Answer

Gini coefficient

Answer

GDP per capita

Answer

Purchasing Power Parity

Answer

Human Development Index

Question 31

How is the relationship between economic growth and environmental sustainability characterized?

Accepted Answer

Economic growth can have both positive and negative effects on environmental sustainability.

Answer

Economic growth has no impact on environmental sustainability.

Answer

Economic growth always leads to environmental degradation.

Question 32

Which of the following is NOT a key indicator of economic development?

Accepted Answer

Population density

Answer

Access to healthcare

Answer

Life expectancy

Answer

Literacy rate

Question 33

According to the Harrod-Domar model, what is the relationship between the savings rate and economic growth?

Accepted Answer

Positive

Answer

Negative

Answer

Irrelevant

Answer

Indirect

Question 34

What is a significant role of human capital in economic development?

Accepted Answer

Enhances productivity and innovation

Answer

Reduces income inequality

Answer

Decreases government expenditure

Question 35

Which of the following is a defining characteristic of a developing country?

Accepted Answer

Low GDP per capita

Answer

Advanced healthcare systems

Answer

High level of industrialization

Answer

Stable political institutions

Question 36

How is the relationship between economic growth and income inequality characterized?

Accepted Answer

It can be either positive or negative, depending on various factors.

Answer

Income inequality always leads to reduced economic growth.

Answer

Economic growth always leads to increased income inequality.

Question 37

How can economic development be distinguished from economic growth?

Accepted Answer

Economic development encompasses both economic growth and social progress.

Answer

Economic growth only refers to increases in GDP.

Answer

They are interchangeable concepts.

Question 38

What is a potential benefit of international trade for developing countries?

Accepted Answer

Promotes technology transfer and access to new markets

Answer

Is inherently harmful

Answer

Always leads to increased income inequality

Question 39

Which of the following is NOT a core indicator used to measure economic growth?

Accepted Answer

Inflation rate

Answer

Gross Domestic Product (GDP)

Answer

Per capita income

Question 40

A country experiences a sustained increase in its GDP per capita. This is most likely indicative of:

Accepted Answer

Economic growth

Answer

Economic development

Answer

Decreased environmental sustainability

Answer

Increased income inequality

Question 41

The Human Development Index (HDI) considers which of the following dimensions?

Accepted Answer

Life expectancy, education, and standard of living

Answer

Resource depletion, pollution, and climate change

Answer

GDP growth, inflation, and unemployment

Answer

Trade balance, foreign direct investment, and capital flows

Question 42

Which of the following is NOT a key driver of economic growth?

Accepted Answer

Increased government regulation

Answer

Investment in infrastructure

Answer

Human capital development

Answer

Technological innovation

Question 43

A country's economic growth is fueled by the discovery and exploitation of vast oil reserves. This is an example of:

Accepted Answer

Resource-led growth

Answer

Sustainable development

Answer

Innovation-led growth

Answer

Human capital-driven growth

Question 44

The term 'sustainable development' emphasizes:

Accepted Answer

Meeting the needs of the present without compromising the ability of future generations to meet their own needs

Answer

Maximizing economic growth at all costs

Question 45

Which of the following is a potential challenge to achieving sustainable economic growth?

Accepted Answer

Environmental degradation

Answer

Technological advancements

Answer

Improved education levels

Answer

Increased international trade

Question 46

The concept of 'convergence' in economic development suggests that:

Accepted Answer

Poorer countries tend to grow faster than richer countries, eventually leading to a narrowing of the income gap

Answer

Economic growth always leads to increased income inequality

Question 47

A country with a high level of economic growth may still face significant challenges in terms of:

Accepted Answer

Poverty, inequality, and environmental degradation

Answer

Strong international trade relations

Answer

Technological innovation and investment

Answer

Improved healthcare and education systems

Question 48

A government invests heavily in public education and healthcare. This is an example of a policy aimed at:

Accepted Answer

Human capital development

Answer

Financial liberalization

Answer

Deregulation of the economy

Answer

Resource extraction