Sample exam questions

True/false:

1. Amartya Sen thinks utility is a bad measure of "development". (Answer: true)

Multiple choice:

2. The number of units of developing country currency required to purchase a basket of goods and services in a developing country that costs one dollar in the U.S. is given by

(a) GNP price deflator.

(b) Human Development Index ranking.

(d) the exchange rate.

(Answer: c)

Fill-in-the-blank:

3. In 2002, ________ gave more foreign aid, as a percentage of GNI, than any other country. (Answer: Denmark)

Short answer:

4. According to evidence presented in class, malaria is endemic in many developing countries. Given this correlation, can we infer that malaria is causally responsible for much of the underdevelopment in LDCs?

(Answer: Not necessarily. It is possible that malaria has a causal effect on economic growth given its physiological impact. However, living in a malarial country is highly correlated with living in a hot and rainy climate. It's a possible that hot and rainy weather is causing the majority of the underdeveloment through its impact on agriculture production. Furthermore, and more importantly, it's also possible that malaria is an effect and not a cause of underdevelopment. In sum, correlation does not equal causation in the case of malaria.)

5. Define the following term(s):

economics (Answer: the efficient allocation of scarce resources)