Name: ____________                                     PAI 730-4  Economics of Development  UPDATE

Practice Quiz 1

20 points (each question is worth the number of points in parentheses)


1)      Sen in the assigned Economic Journal reading described four main themes in the first generation of development economics. 

a.       Identify and briefly describe these four themes.  (2 points)













b.      Describe Sen’s assessment of whether these four themes were correct as a way of viewing the process of development.  (1 points)















a.       Describe the relationship between the Human Development Index and Sen’s view of the goal of development.  ( 1 point)








2)      As a historical matter, the stages of growth theory of development was followed by the underdevelopment approach. 

a.       Describe the five stages in Rostow’s stages of growth theory. (1 point)













b.      Describe the difference between undeveloped nations and underdeveloped nations according to underdevelopment theory. (1 point)












c.       Contrast these theories in terms of where they predict impediments to growth lie – internally or externally.  (1 point)


3)      Questions about the “Washington Consensus”.

a.       During what era was the “Washington Consensus” most influential?  (1 point)





b.      Of the 10 policies suggested by the Washington Consensus, describe 8. (2 points)














4)      Kuznets describes a set of 6 characteristics common to the growth process of most developed countries. 

a.       Describe these six characteristics  (1 points)

























b.      Provide three reasons why Todaro suggests these patterns may not be applicable to the current situation for LDC’s. (1 point)









5)      Technological Progress.

a.       Show on an isoquant neutral technological progress if production is a function of labor and capital.   (1 point)










b.      Show on an isoquant labor saving technical progress if production is a function of labor and capital.  (1 point)













c.       Is most progress in developed countries a result of labor saving or capital saving technical progress?  (1 point)








d.      Did Solow argue that factor accumulation or technological progress had a larger influence on economic growth. (1 point)





6)      Convergence.

a.       Describe the difference between conditional and unconditional convergence.  (1 point)






b.      What two factors does Todaro identify that would lead one to think that developing countries can catch up with developed countries in terms of per capita income?  (1 point)







c.       Does Barro find evidence more consistent with conditional convergence or unconditional convergence?  Explain.  (1 point)







d.      Explain how Barro’s findings relate to the nature of technological progress in endogenous growth theory. (1 point)





7)      Bonus, no points, but extra practice.  Odd kind of bonus, but it can’t hurt.


a.       Explain what is meant by positive assortive matching, and identify whether it is a theory of convergence or divergence.







b.      Explain how each individual acting in his or her own best interest may not lead to the socially optimal outcome if there are strategic interactions (and know how to solve for a best response outcome).










c.       Explain the difference between endogenous growth theory and exogenous growth theory.  What aspect of Solow’s results called for a new approach?









d.      Explain the difference between ex ante risk management and ex post risk coping.