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Chapter 1 Introducing Economic Development: A Global Perspective Answer the following questions. 1. Provide a definition of development economics. Justify your choice carefully. Focuses on improving the economies of developing countries. Development economics considers how to promote economic growth by improving factors such as health, education, working conditions, domestic and international policies, and market conditions in developing countries. How poor countries can be transformed into prosperous ones. Strategies for transforming a developing economy tend to be unique because the social and political background of countries can vary dramatically. 2. In defining development to include more than just the growth of per capita income, there is an implicit assumption that the growth of per capita income alone is not sufficient to guarantee the reduction of poverty and the growth of self-esteem. Is it possible that there could be growth of per capita income without the achievement of these other objectives? Per capita income can show growth even when that growth does not touch vast portionsof the population. The growth may be centered in one area or sector of the economy for example. Also,most developed countries have, at some time in their histories, introduced policies emphasizing equality 3. In what way is development economics greater in scope than traditional economics? Development economics must encompass the study of institutional, political, and social as well as economic mechanisms for modernizing an economy while eliminating absolute poverty and transforming states of mind as well as physical conditions. 4. What do you think are the most serious obstacles to further progress in the developing world? Appropriate public policies designed to effect major economic, institutional, and social transformations of entire societies in a very short time. 5. In reviewing discussions of life in developing countries, what is it about lifestyles in the low-income countries compared with lifestyles in the high-income countries that most strikes you? Why? 6. It has been said that “underdevelopment is a state of mind.” Comment. 7. How is happiness related to development? The correlation between happiness and income level as well as touchon the connection between happiness and social relationships, personal and democratic freedoms,religious beliefs, and health. 8. Why are women often referred to as playing a central role in economic development? Women can influence whether or not the next generation will be impoverished through their role of childrearing based on the resources they bring to this task and the values they pass to their children. Empirically, women tend to allocate a higher percentage of the income under their own control to the family and children than men. Multiple Choices 1. Countries tend to be classified as more or less developed based on a. the literacy rate. b. the poverty rate. c. the level of income per capita.* d. the types of goods they produce. Answer: 2. Which of the following demonstrates international interdependence? a. the oil shocks b. the debt crisis c. global warming d. all of the above.* Answer: 3. A subsistence economy is a. a very low income economy. b. an economy in which people make what they consume.* c. an economy in which people receive food for pay. d. all of the above. Answer: 4. Development economics is the study of the a. alleviation of absolute poverty. b. transformation of institutions. c. allocation of resources in developing countries. d. all of the above.* Answer: 5. Development economics must have a scope wider than traditional economics because a. values and attitudes play little role in the pace of development. b. people in developing societies do less utility-maximizing. c. transformation of social institutions is necessary for development.* d. all of the above. Answer: 6. A good definition of the meaning of development is the a. elimination of absolute poverty. b. improvement in the quality of life. c. fulfillment of the potential of individuals. d. all of the above.* Answer: 7. Which of the following is not an important objective of development? a. increases in per capita income b. the expansion of available choices c. increases in individual and national self-esteem d. all of the above are important objectives of development.* Answer: 8. The core values of development include a. increasing income per person. b. reducing the inequality of income. c. the ability to meet basic needs.* d. all of the above. Answer: