Economic Growth MCQs

Cheatsheet Content

### Meaning and Characteristics of Modern Economic Growth 1. Which of the following is NOT a characteristic of modern economic growth as described by Simon Kuznets? a) High rates of growth of per capita output and population. b) High rates of structural transformation of the economy. c) Increased international economic interdependence. d) Decreased application of science to problems of production. **Correct Answer: d)** 2. Modern economic growth is primarily driven by: a) Increases in land and natural resources. b) Technological innovation and its widespread application. c) A shift towards subsistence agriculture. d) Decreased capital accumulation. **Correct Answer: b)** 3. According to Kuznets, a key feature of modern economic growth is the diffusion of: a) Ancient agricultural techniques. b) Modern science and technology. c) Barter systems. d) Feudal social structures. **Correct Answer: b)** 4. Which sector typically declines in relative importance during modern economic growth? a) Manufacturing. b) Services. c) Agriculture. d) Information technology. **Correct Answer: c)** 5. Modern economic growth often leads to significant changes in: a) Only the production structure. b) Only consumption patterns. c) Both production structure and consumption patterns. d) Neither production nor consumption. **Correct Answer: c)** 6. High rates of urbanization are a common feature of modern economic growth due to: a) Increased demand for rural labor. b) Migration from rural to urban areas for industrial jobs. c) Decreased population growth. d) Expansion of subsistence farming. **Correct Answer: b)** 7. One of the main social implications of modern economic growth is: a) A decrease in literacy rates. b) A shift towards more traditional social institutions. c) Greater social mobility and changes in family structure. d) A reduction in global communication. **Correct Answer: c)** 8. The "extensive" growth factor refers to: a) Improvements in productivity. b) An increase in the quantity of inputs (e.g., labor, capital). c) Technological innovation. d) Efficient resource allocation. **Correct Answer: b)** 9. The "intensive" growth factor refers to: a) An increase in the quantity of inputs. b) Improvements in productivity and efficiency of inputs. c) Expansion of geographical area. d) Population growth without technological change. **Correct Answer: b)** 10. Modern economic growth is characterized by: a) Low per capita income growth. b) Rapid and sustained per capita income growth. c) Stagnant per capita income. d) Negative per capita income growth. **Correct Answer: b)** ### Economic Growth and Income Distribution: The Kuznets Hypothesis 1. The Kuznets Hypothesis suggests that as an economy develops, income inequality: a) Continuously decreases. b) Continuously increases. c) First increases and then decreases, forming an inverted U-shape. d) First decreases and then increases. **Correct Answer: c)** 2. According to Kuznets, the initial rise in income inequality during economic development is often due to: a) A shift from agriculture to industry, with higher wages in urban sectors. b) Equal distribution of capital and land. c) Increased government intervention in income redistribution. d) A decline in technological progress. **Correct Answer: a)** 3. The Kuznets curve illustrates the relationship between economic development and: a) Population growth. b) Environmental degradation. c) Income inequality. d) International trade. **Correct Answer: c)** 4. In the early stages of economic development, the Kuznets hypothesis predicts: a) A decrease in income disparities. b) An increase in income disparities. c) No change in income disparities. d) Complete income equality. **Correct Answer: b)** 5. What happens to income inequality in the later stages of economic development according to Kuznets? a) It continues to rise indefinitely. b) It plateaus. c) It begins to fall. d) It becomes irrelevant. **Correct Answer: c)** 6. One of the main reasons for the decline in inequality in later stages, as per Kuznets, is: a) Increased demand for unskilled labor. b) Expansion of social welfare programs and education. c) Stagnation of industrial growth. d) Return to agrarian economy. **Correct Answer: b)** 7. The Kuznets curve is often criticized for: a) Being universally applicable to all countries. b) Overlooking the role of policy interventions. c) Underestimating the importance of agriculture. d) Predicting continuous equality. **Correct Answer: b)** 8. Which of the following could potentially flatten or alter the Kuznets curve? a) Strict laissez-faire policies. b) Strong progressive taxation and social safety nets. c) Increased rural-to-urban migration without job creation. d) Focus solely on capital-intensive industries. **Correct Answer: b)** 9. The inverted U-shape of the Kuznets curve implies that: a) Inequality is always bad for growth. b) Some level of inequality is inevitable and possibly beneficial for growth in early stages. c) Economic growth always solves inequality problems automatically. d) Equality is a prerequisite for growth. **Correct Answer: b)** 10. The Kuznets ratio is a measure of: a) Total GDP. b) Income inequality, typically the share of income held by the top 20% vs. bottom 40%. c) Poverty rates. d) Human Development Index. **Correct Answer: b)** ### Factors of Economic Growth: Economic and Non-Economic 1. Which of the following is an economic factor of growth? a) Political stability. b) Human capital formation. c) Social attitudes. d) Cultural values. **Correct Answer: b)** 2. Non-economic factors influencing economic growth typically include: a) Capital accumulation. b) Technological progress. c) Institutional framework and governance. d) Natural resources. **Correct Answer: c)** 3. An example of a natural resource as an economic factor of growth is: a) A country's legal system. b) Oil reserves. c) Public education. d) Entrepreneurial spirit. **Correct Answer: b)** 4. Human capital refers to: a) The number of people in a country. b) The skills, knowledge, and health embodied in people. c) Physical capital owned by individuals. d) The amount of money people have. **Correct Answer: b)** 5. Technological progress is considered: a) An extensive factor of growth. b) An intensive factor of growth. c) A non-economic factor. d) Irrelevant to long-term growth. **Correct Answer: b)** 6. Which of the following is a non-economic factor? a) Foreign direct investment. b) Infrastructure development. c) Corruption levels. d) Labor force participation rate. **Correct Answer: c)** 7. The rule of law and property rights are examples of: a) Economic factors related to capital. b) Non-economic factors related to institutions. c) Demographic factors. d) Technological factors. **Correct Answer: b)** 8. High rates of savings and investment directly contribute to: a) Human capital development. b) Technological innovation. c) Physical capital accumulation. d) Institutional reform. **Correct Answer: c)** 9. Entrepreneurship is best classified as: a) A natural resource. b) A form of physical capital. c) A key human resource/factor driving innovation. d) A non-economic factor only. **Correct Answer: c)** 10. Government policies, such as fiscal and monetary policies, are considered: a) Purely non-economic factors. b) Economic factors that influence resource allocation and stability. c) Only relevant in developed countries. d) Detrimental to economic growth. **Correct Answer: b)** 11. Which of the following is an example of a social non-economic factor? a) The level of education spending. b) The prevalence of trust and social cohesion. c) Interest rates. d) The size of the labor force. **Correct Answer: b)** 12. A stable and efficient financial system contributes to growth by: a) Reducing the labor supply. b) Facilitating capital formation and allocation. c) Discouraging technological adoption. d) Increasing political instability. **Correct Answer: b)** 13. The demographic dividend refers to: a) A period when a country has a declining birth rate and a rising death rate. b) A period of accelerated economic growth that can result from a decline in a country's birth and death rates. c) The negative impact of an aging population. d) The impact of migration on population size. **Correct Answer: b)** 14. The availability of appropriate technology is a crucial economic factor because it: a) Only benefits developed nations. b) Increases productivity and efficiency of other inputs. c) Reduces the need for human capital. d) Leads to increased reliance on natural resources. **Correct Answer: b)** 15. What role does education play as an economic factor? a) It is purely a consumption good. b) It enhances human capital, leading to higher productivity and innovation. c) It primarily contributes to social harmony, not economic growth. d) It is a non-economic factor only. **Correct Answer: b)** 16. Infrastructure (e.g., roads, electricity, communication) is vital because it: a) Is a non-economic factor. b) Directly produces goods and services. c) Facilitates economic activity and reduces transaction costs. d) Is only important for the service sector. **Correct Answer: c)** 17. Political stability is considered a non-economic factor because: a) It directly involves monetary transactions. b) It creates a predictable environment conducive to investment and long-term planning. c) It only affects social aspects, not economic. d) It is irrelevant to economic decision-making. **Correct Answer: b)** 18. The concept of "total factor productivity" (TFP) measures: a) The growth in labor input. b) The growth in capital input. c) The efficiency with which inputs are used, often attributed to technology and institutions. d) The total output of an economy. **Correct Answer: c)** 19. Which of the following is most likely to hinder economic growth? a) High levels of foreign direct investment. b) Pervasive corruption and weak institutions. c) A highly educated workforce. d) Abundant natural resources. **Correct Answer: b)** 20. The "resource curse" hypothesis suggests that: a) Countries with abundant natural resources always experience rapid economic growth. b) Abundant natural resources can sometimes hinder economic development due to corruption, price volatility, and neglect of other sectors. c) Natural resources are not a factor in economic growth. d) Only countries without natural resources can achieve sustained growth. **Correct Answer: b)** ### Chenery's Patterns of Structural Change 1. Hollis Chenery's work on structural change primarily focuses on: a) The determinants of short-run economic fluctuations. b) The systematic transformation of an economy's production and demand structure as it develops. c) The role of monetary policy in controlling inflation. d) The impact of trade barriers on international relations. **Correct Answer: b)** 2. According to Chenery's patterns, a typical feature of structural change during development is: a) A continuous increase in the share of agriculture in GDP. b) A decline in the share of industry and a rise in services from the early stages. c) A shift from primary production to industrial and then service sectors. d) No significant change in the composition of trade. **Correct Answer: c)** 3. Chenery's analysis of structural change draws heavily on: a) Classical economic theories of fixed proportions. b) Empirical observation of developing countries. c) Purely theoretical models without empirical validation. d) The impact of climate change on economies. **Correct Answer: b)** 4. One of the key transformations observed in Chenery's patterns is the shift in demand from: a) Industrial goods to agricultural goods. b) Basic necessities to more diversified and manufactured goods. c) Services to primary goods. d) Luxury goods to basic goods. **Correct Answer: b)** 5. The share of manufactured goods in exports typically: a) Decreases as a country develops. b) Remains constant regardless of development level. c) Increases as a country develops and industrializes. d) Is only significant for agrarian economies. **Correct Answer: c)** 6. Chenery's patterns suggest that as income per capita rises, the share of the labor force employed in agriculture: a) Increases significantly. b) Remains stable. c) Decreases. d) Becomes the dominant sector. **Correct Answer: c)** 7. Which of the following describes the typical evolution of the production structure according to Chenery? a) Agriculture -> Services -> Industry. b) Industry -> Agriculture -> Services. c) Agriculture -> Industry -> Services. d) Services -> Industry -> Agriculture. **Correct Answer: c)** 8. Chenery's work emphasizes the role of __________ in driving structural change. a) Strict command economy planning. b) Technological progress and capital accumulation. c) Isolation from international trade. d) A static, unchanging economic environment. **Correct Answer: b)** 9. The "dual economy" model, often associated with structural change, describes the coexistence of: a) Two equally developed sectors. b) A traditional, low-productivity sector and a modern, high-productivity sector. c) Two entirely independent economies within one country. d) An export-oriented sector and an import-substitution sector. **Correct Answer: b)** 10. Which of the following is NOT a typical feature of structural change identified by Chenery? a) Rise in investment ratio. b) Shift from primary to secondary and tertiary production. c) Decline in urbanization. d) Changes in the composition of trade. **Correct Answer: c)** 11. According to Chenery, as a country industrializes, the share of its GDP from the industrial sector typically: a) Decreases consistently. b) Increases, then may stabilize or slightly decrease as services grow. c) Remains constant. d) Is always lower than the agricultural share. **Correct Answer: b)** 12. The concept of "industrialization" within structural change refers to: a) The decline of all non-agricultural sectors. b) The growth of manufacturing and related sectors. c) A shift towards purely service-based economies. d) Increased reliance on manual labor. **Correct Answer: b)** 13. Chenery's patterns of structural change are considered: a) Purely theoretical and not observed in practice. b) Empirically derived generalizations of development paths. c) Prescriptive models for all developing countries to follow rigidly. d) Irrelevant in the modern globalized economy. **Correct Answer: b)** 14. Increased emphasis on education and skill development is often a consequence and driver of structural change because: a) It reduces the need for modern technology. b) It is crucial for labor absorption in growing industrial and service sectors. c) It encourages a return to agrarian lifestyles. d) It makes economies less competitive. **Correct Answer: b)** 15. The role of government in structural change, as implied by Chenery, often involves: a) Non-intervention in all economic activity. b) Policies that support industrial development, infrastructure, and education. c) Only focusing on agricultural subsidies. d) Preventing any shift from traditional sectors. **Correct Answer: b)** ### General Economic Development Theories 1. The Harrod-Domar model emphasizes the importance of: a) Technological progress. b) Savings and investment for economic growth. c) Human capital. d) Institutional quality. **Correct Answer: b)** 2. The Solow Growth Model introduces _________ as a key determinant of long-run economic growth. a) Exogenous technological progress. b) Endogenous human capital. c) Natural resource abundance. d) Political stability. **Correct Answer: a)** 3. Endogenous growth theories differ from the Solow model by: a) Assuming constant returns to scale for capital. b) Making technological progress an endogenous outcome of economic activity. c) Ignoring human capital. d) Focusing solely on population growth. **Correct Answer: b)** 4. The "big push" theory suggests that: a) Only small, incremental investments are needed for development. b) A large-scale, coordinated investment across multiple sectors is required to overcome indivisibilities and externalities. c) Foreign aid is always counterproductive. d) Market forces alone are sufficient for rapid development. **Correct Answer: b)** 5. Dependency theory argues that underdevelopment in poorer countries is primarily caused by: a) Internal factors like corruption. b) Their integration into the global capitalist system in a subordinate position. c) Lack of natural resources. d) Insufficient foreign aid. **Correct Answer: b)** 6. The concept of "convergence" in economic growth theories refers to: a) All countries growing at the same rate. b) Poorer countries growing faster than richer countries, eventually catching up. c) Richer countries growing faster than poorer countries. d) Developed and developing countries having identical economic structures. **Correct Answer: b)** 7. Which model suggests that sustained growth requires continuous innovation and capital deepening, but eventually reaches a steady state without exogenous technology? a) Endogenous Growth Model. b) Harrod-Domar Model. c) Solow Growth Model. d) New Institutional Economics. **Correct Answer: c)** 8. The concept of "creative destruction" is associated with: a) Adam Smith. b) Karl Marx. c) Joseph Schumpeter. d) John Maynard Keynes. **Correct Answer: c)** 9. Rostow's Stages of Economic Growth include: a) Primitive Accumulation. b) Take-off. c) Dependency. d) Steady-state. **Correct Answer: b)** 10. The main criticism of Rostow's stages is that: a) They are too flexible. b) They are too descriptive and lack analytical rigor, often failing to explain how transitions occur. c) They underestimate the role of technology. d) They are only applicable to socialist economies. **Correct Answer: b)** 11. The concept of "vicious circle of poverty" suggests that: a) Poverty creates conditions that perpetuate poverty. b) Economic growth is always circular. c) Rich countries always exploit poor countries. d) Foreign aid solves poverty immediately. **Correct Answer: a)** 12. The "absorptive capacity" of an economy refers to its ability to: a) Consume all its output. b) Effectively utilize foreign aid, technology, and investment. c) Produce all goods domestically. d) Resist external economic shocks. **Correct Answer: b)** 13. The Lewis model of economic development describes: a) Growth in a closed economy with no international trade. b) The transfer of labor from a traditional, surplus labor sector to a modern, industrial sector. c) The role of financial markets in development. d) The impact of environmental regulations on growth. **Correct Answer: b)** 14. A key assumption of the Lewis model is: a) Unlimited supply of labor in the modern sector. b) Zero marginal product of labor in the traditional sector. c) Perfect labor mobility with no wage differentials. d) All of the above. **Correct Answer: b)** 15. The "Washington Consensus" refers to a set of policy recommendations for developing countries that generally promote: a) State-led industrialization and protectionism. b) Market liberalization, fiscal discipline, and privatization. c) Centralized planning and collectivization. d) Increased government spending on welfare programs. **Correct Answer: b)** ### Measurement of Economic Development 1. Gross Domestic Product (GDP) measures: a) The total income of a country's citizens, including foreign earnings. b) The total market value of all final goods and services produced within a country's borders in a specific time period. c) The total wealth of a nation. d) The total physical output of an economy. **Correct Answer: b)** 2. Gross National Product (GNP) differs from GDP by including: a) Only government spending. b) Income earned by residents from abroad and excluding income earned by foreigners domestically. c) Environmental costs. d) Informal sector activities. **Correct Answer: b)** 3. The Human Development Index (HDI) is a composite index that considers: a) Only per capita income. b) Life expectancy, education, and standard of living (GNI per capita). c) Environmental sustainability. d) Political freedom. **Correct Answer: b)** 4. A major limitation of using GDP per capita as a sole measure of development is that it: a) Accounts for income distribution. b) Reflects the quality of life and social progress accurately. c) Does not account for income inequality, non-market activities, or environmental costs. d) Measures the informal economy well. **Correct Answer: c)** 5. The Gini coefficient is a measure of: a) Economic growth rate. b) Income inequality. c) Inflation rate. d) Unemployment rate. **Correct Answer: b)** 6. Purchasing Power Parity (PPP) adjusted GDP is used to: a) Measure nominal GDP. b) Compare economic output between countries by adjusting for differences in the cost of living. c) Exclude foreign investment. d) Focus only on trade balances. **Correct Answer: b)** 7. Which of the following would generally indicate a higher level of economic development? a) High infant mortality rate. b) Low literacy rate. c) High life expectancy. d) High percentage of labor in agriculture. **Correct Answer: c)** 8. The Multidimensional Poverty Index (MPI) includes indicators from which dimensions? a) Only income and consumption. b) Health, education, and living standards. c) Political participation and human rights. d) Environmental quality and resource depletion. **Correct Answer: b)** 9. Why is "real" GDP preferred over "nominal" GDP for measuring economic growth over time? a) Real GDP includes inflation. b) Real GDP adjusts for price changes, providing a more accurate picture of output changes. c) Nominal GDP is always larger. d) Real GDP is easier to calculate. **Correct Answer: b)** 10. The Genuine Progress Indicator (GPI) attempts to: a) Only measure environmental degradation. b) Provide a more comprehensive measure of well-being by including environmental and social factors alongside economic ones. c) Only focus on market transactions. d) Replace GDP entirely without considering economic output. **Correct Answer: b)** ### Population and Development 1. The Malthusian theory of population states that population tends to grow: a) Arithmetically, while food supply grows geometrically. b) Geometrically, while food supply grows arithmetically. c) At a constant rate, irrespective of food supply. d) Only when technology improves. **Correct Answer: b)** 2. A key implication of the Malthusian theory is that population growth, unchecked, will eventually lead to: a) Ever-increasing prosperity. b) Poverty and starvation due to resource scarcity. c) Sustainable development. d) Technological breakthroughs that solve scarcity. **Correct Answer: b)** 3. The demographic transition model describes the shift from: a) High birth and death rates to low birth and death rates. b) Low birth and death rates to high birth and death rates. c) Rural to urban population. d) Agricultural to industrial economies. **Correct Answer: a)** 4. In which stage of the demographic transition model does population growth tend to be highest? a) Stage 1 (High stationary). b) Stage 2 (Early expanding). c) Stage 3 (Late expanding). d) Stage 4 (Low stationary). **Correct Answer: b)** 5. A "youth bulge" in a population pyramid can indicate: a) A rapidly aging population. b) A potential for increased labor supply and economic growth, but also challenges in education and employment. c) A declining birth rate. d) High life expectancy. **Correct Answer: b)** 6. An aging population typically leads to: a) Increased pressure on social security and healthcare systems. b) A larger working-age population. c) Higher birth rates. d) Decreased dependency ratios. **Correct Answer: a)** 7. The "replacement level" fertility rate is approximately: a) 1.0 children per woman. b) 2.1 children per woman. c) 3.5 children per woman. d) 5.0 children per woman. **Correct Answer: b)** 8. Family planning programs can contribute to economic development by: a) Increasing population growth. b) Reducing the dependency ratio and improving maternal/child health. c) Decreasing female labor force participation. d) Increasing overall mortality rates. **Correct Answer: b)** 9. Which of the following is NOT a typical "positive check" in Malthusian theory? a) War. b) Famine. c) Disease. d) Delayed marriage. **Correct Answer: d)** 10. The concept of "demographic dividend" is most likely to occur during which stage of the demographic transition? a) Stage 1. b) Stage 2 and 3. c) Stage 4. d) Stage 5 (Declining). **Correct Answer: b)** ### International Trade and Development 1. The theory of comparative advantage suggests that countries should specialize in producing goods where they have a lower: a) Absolute cost. b) Opportunity cost. c) Total cost. d) Labor cost. **Correct Answer: b)** 2. Export-oriented industrialization (EOI) is a development strategy that emphasizes: a) Producing goods for domestic consumption only. b) Promoting industries that produce goods for export. c) Heavy tariffs and quotas on all imports. d) Reliance on primary commodity exports. **Correct Answer: b)** 3. Import-substitution industrialization (ISI) aims to: a) Increase exports of manufactured goods. b) Replace foreign imports with domestic production. c) Reduce tariffs on all goods. d) Integrate into global supply chains. **Correct Answer: b)** 4. A major criticism of ISI policies is that they often lead to: a) Increased competitiveness. b) Inefficient domestic industries and high consumer prices. c) Rapid technological advancement. d) Greater export diversification. **Correct Answer: b)** 5. Terms of trade refers to: a) The total volume of goods traded. b) The ratio of a country's export prices to its import prices. c) The balance of payments. d) The exchange rate between two currencies. **Correct Answer: b)** 6. Prebisch-Singer hypothesis suggests that the terms of trade for developing countries that export primary commodities tend to: a) Improve over time. b) Worsen over time. c) Remain constant. d) Be irrelevant to development. **Correct Answer: b)** 7. Foreign Direct Investment (FDI) can contribute to development by: a) Increasing reliance on foreign aid. b) Bringing capital, technology, and management expertise. c) Only benefiting the investing country. d) Decreasing domestic savings. **Correct Answer: b)** 8. Remittances are: a) Loans from international organizations. b) Money sent by migrants to their home countries. c) Foreign aid grants. d) Payments for imports. **Correct Answer: b)** 9. The World Trade Organization (WTO) primarily aims to: a) Promote protectionist policies. b) Regulate global financial markets. c) Facilitate free trade and reduce trade barriers. d) Provide development assistance. **Correct Answer: c)** 10. A customs union is a form of economic integration where member countries: a) Only reduce tariffs among themselves. b) Eliminate tariffs among themselves and adopt a common external tariff. c) Have completely free movement of factors of production. d) Adopt a common currency. **Correct Answer: b)** ### Agriculture and Development 1. In many developing countries, the agricultural sector typically: a) Employs a small percentage of the workforce. b) Contributes significantly to GDP and employment in early stages of development. c) Is completely mechanized and highly productive. d) Is irrelevant to food security. **Correct Answer: b)** 2. The "Green Revolution" refers to: a) A political movement for environmental protection. b) The development of high-yielding varieties of crops and associated agricultural technologies. c) A shift from fossil fuels to renewable energy. d) The growth of organic farming. **Correct Answer: b)** 3. A major challenge for agricultural development in many low-income countries is: a) Over-mechanization. b) Lack of access to irrigation, credit, and modern inputs. c) Surplus of land. d) Excessive government subsidies. **Correct Answer: b)** 4. Land reform policies often aim to: a) Consolidate land ownership among a few large landowners. b) Redistribute land to small farmers and improve tenure security. c) Convert agricultural land to industrial use. d) Increase dependence on imported food. **Correct Answer: b)** 5. Food security exists when: a) Everyone has access to genetically modified foods. b) All people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food. c) A country produces all its food domestically. d) Food prices are always low. **Correct Answer: b)** ### Role of the State in Development 1. The "developmental state" model often refers to governments that: a) Adopt a purely laissez-faire approach. b) Actively intervene to guide and promote economic development, often through industrial policies. c) Focus solely on welfare provision. d) Are characterized by high levels of corruption and inefficiency. **Correct Answer: b)** 2. Market failures, such as externalities and public goods, often provide a rationale for: a) Complete government withdrawal from the economy. b) Government intervention in the economy. c) Increased reliance on foreign aid. d) Strict adherence to free trade. **Correct Answer: b)** 3. Good governance in the context of development refers to: a) Minimal government intervention. b) Transparency, accountability, rule of law, and effective public administration. c) Authoritarian rule. d) High levels of protectionism. **Correct Answer: b)** 4. Fiscal policy involves: a) Controlling the money supply. b) Government spending and taxation decisions. c) Setting interest rates. d) Regulating international trade. **Correct Answer: b)** 5. Monetary policy is primarily concerned with: a) Government budget. b) Controlling the money supply and credit conditions. c) Directing industrial investment. d) Providing social services. **Correct Answer: b)** ### Sustainable Development 1. Sustainable development is development that: a) Focuses solely on economic growth. b) Meets the needs of the present without compromising the ability of future generations to meet their own needs. c) Prioritizes environmental protection over economic growth. d) Is only relevant for developed countries. **Correct Answer: b)** 2. The three pillars of sustainable development are often identified as: a) Economic, social, and environmental. b) Agriculture, industry, and services. c) Government, private sector, and NGOs. d) Local, national, and international. **Correct Answer: a)** 3. The concept of "ecological footprint" measures: a) The total land area of a country. b) The impact of human activities on the environment in terms of the amount of land and water required to sustain their consumption patterns. c) The number of endangered species. d) The amount of carbon dioxide in the atmosphere. **Correct Answer: b)** 4. Climate change poses a significant threat to sustainable development primarily because: a) It only affects developed countries. b) It can exacerbate poverty, reduce agricultural productivity, and increase natural disasters. c) It leads to too much economic growth. d) It encourages overconsumption. **Correct Answer: b)** 5. The circular economy model aims to: a) Promote linear production processes (take-make-dispose). b) Minimize waste and maximize resource efficiency through reuse, repair, and recycling. c) Increase the extraction of raw materials. d) Focus solely on economic growth without environmental considerations. **Correct Answer: b)** ### Poverty and Inequality 1. Absolute poverty refers to: a) Being poor relative to others in society. b) A condition where people lack the minimum amount of income needed to maintain the average standard of living. c) A condition where people lack the basic necessities of life, such as food, shelter, and clothing. d) Poverty caused by natural disasters. **Correct Answer: c)** 2. Relative poverty refers to: a) A condition where people lack the basic necessities of life. b) Being poor relative to others in society, often measured by a percentage of median income. c) Poverty that is temporary. d) Poverty only in specific regions. **Correct Answer: b)** 3. The "poverty line" is a threshold used to: a) Measure economic growth. b) Determine who is considered poor based on income or consumption. c) Assess environmental impact. d) Calculate the Gini coefficient. **Correct Answer: b)** 4. Income inequality can hinder economic growth by: a) Encouraging innovation. b) Reducing human capital investment and fostering social unrest. c) Increasing overall savings rates. d) Simplifying policy-making. **Correct Answer: b)** 5. Microfinance institutions aim to: a) Provide large loans to big corporations. b) Offer small loans and financial services to low-income individuals and small businesses. c) Manage national monetary policy. d) Facilitate international trade. **Correct Answer: b)** ### Education and Health in Development 1. Investment in education is considered crucial for development because it: a) Is purely a consumption expenditure. b) Enhances human capital, productivity, and innovation. c) Only benefits the individual, not society. d) Leads to increased unemployment. **Correct Answer: b)** 2. Improvements in public health (e.g., vaccination programs) contribute to development by: a) Increasing mortality rates. b) Reducing the healthy workforce. c) Increasing life expectancy and labor productivity. d) Only benefiting the elderly. **Correct Answer: c)** 3. The concept of "health capital" refers to: a) The amount of money spent on healthcare. b) The stock of health in a population, contributing to its productive capacity. c) The number of hospitals in a country. d) The profit generated by the healthcare industry. **Correct Answer: b)** 4. Gender inequality in education often leads to: a) Higher overall economic growth. b) Reduced human capital potential and lower productivity. c) Increased female labor force participation. d) Improved social outcomes. **Correct Answer: b)** 5. Early childhood development programs are important for long-term development because they: a) Only benefit children in the short term. b) Lay the foundation for cognitive and social skills, impacting future productivity and earnings. c) Are too expensive to be effective. d) Have no measurable impact on adult outcomes. **Correct Answer: b)**