Question ECN 360, Economic Development Autumn 2013

04 Jun Question ECN 360, Economic Development Autumn 2013

Question
ECN 360, Economic Development

Autumn 2013

Problem Set 5

As a reminder, you are allowed and encouraged to do this problem set with others. However, each

student must submit his or her own problem set, which may not be a direct copy of another student’s.

Section 1: Multiple Choice. Select one. 5 points each, 60 points total.

Question 1 Which two groups have a history of tension and violence in Rakhine state of Myanmar?

a. Christians and Muslims.

b. Muslims and Buddhists.

c. Ethnic Chinese and ethnic Tibetans.

d. Ethnic Chinese and ethnic Koreans.

Question 2 Which market failure is least applicable to new technologies or R&D, in the absence of

government intervention?

a. Externalities.

b. Public goods.

c. Imperfect information.

d. Imperfect competition.

Question 3 How has the rate of technological adoption changed over the last 200 years?

a. It has declined dramatically.

b. It has increased dramatically.

c. It is an S-shape.

d. It is roughly constant.

Question 4 What accounted for the large variation in labor productivity in the textile industry around

1900?

a. Differences in government regulation.

b. Differences in the number of looms tended per worker.

c. Differences in the technology in use.

d. Differences in tax rates.

Question 5 Why are interest rates so high in poor countries?

a. Because lenders are usually monopolists.

b. Because governments put a floor on interest rates.

c. Because default rates on loans are high.

d. Because monitoring and servicing loans is expensive.

Question 6 What year represents a turning point for many indicators of human progress?

a. 1 CE.

b. 1000 CE.

c. 1800 CE.

d. 1960 CE.

Question 7 According to the research discussed in class, what is the main benefit of microfinance?

a. Improved health of children.

b. Improved empowerment of women.

c. More businesses started.

d. Improved education of girls.

Question 8 What innovation led to the onset of modern growth?

a. The development of intellectual property rights.

b. The formation of governments.

c. The development of cities.

d. The Green Revolution in agriculture.

Question 9 What policy will permanently raise living standards in the Malthus model?

a. A permanent increase in the availability of land.

b. A permanent increase in farm productivity.

c. A permanent decrease in farm productivity.

d. Permanent controls on the population.

Question 10 What was the tentative conclusion of our attempt to forecast future technology growth

rates?

a. They are likely to remain constant, as they have been constant for the lat 50 years.

b. They are likely to eventually decline, since we cannot keep increasing the number of

researchers.

c. They are likely to accelerate because of the power of working in teams.

d. They are likely to accelerate because the number of researchers in China will grow.

Question 11 How much do rich countries spend on R&D, roughly?

a. About 1% of GDP.

b. About 2.5% of GDP.

c. About 12.5% of GDP

d. About 18% of GDP.

Question 12 Which of the following can explain the existence of idle resources as a contributor to low

labor productivity?

a. Government-operated firms.

b. Out-of-date technologies.

c. High tax rates.

d. High inflation rates.

Section 2: Short Answer. 20 points each, 40 points total

Question 1 This question asks you to explain the impact of more farmland in the Malthusian model.

a. Draw and label the initial diagram.

b. Now suppose that a sustained effort allows the country to turn some forest into farmland.

What curve or curves will this shift?

c. Draw the change on the diagram.

d. Explain the short-run and long-run effects for c and N.

Question 2 What features account for the success (widespread adoption, profitability) of microfinance?