Question 1

According to the Malthusian theory of development, what is the primary reason why per capita income remained near subsistence levels for most of human history?

Accepted Answer

Population growth tended to outpace increases in food production, keeping incomes at subsistence.

Question 2

Which of the following best explains why the Industrial Revolution led to a dramatic increase in per capita GDP in Western Europe and North America after 1800?

Accepted Answer

Sustained technological innovation and improved institutions enabled productivity growth.

Question 3

Based on the Neoclassical Production Function Theory, which of the following is NOT considered a direct cause of economic growth?

Accepted Answer

The existence of extractive institutions

Question 4

Why did extractive institutions tend to emerge in regions with hot, humid, and disease-prone climates during the colonial era?

Accepted Answer

Dense populations and harsh climates discouraged settlement, leading to institutions that favored resource extraction by elites.

Question 5

Suppose a country experiences a sharp reduction in transportation and communication costs. According to the study materials, which of the following is NOT a likely direct effect?

Accepted Answer

A decrease in the adoption of new technologies

Question 6

Refer to the graph showing international trade as a percent of world GDP from 1960 to 2015. What trend is most evident from the data?

Accepted Answer

International trade as a share of GDP increased significantly, especially after 1990.

Question 7

A country is classified as one of the 'most geographically disadvantaged.' According to the study materials, which of the following challenges is it most likely to face?

Accepted Answer

High transportation costs and limited access to international markets

Question 8

Which of the following equations best represents the Neoclassical Production Function?

Accepted Answer

$$ Y = A K$$^{\alpha}$$ L$$^{1-\alpha}$$ $$

Question 9

If the opportunity cost of having children rises as per capita income increases, what demographic change is most likely to occur according to the study materials?

Accepted Answer

The birth rate will decrease, increasing the share of the prime working-age population.

Question 10

Which of the following best describes the 'virtuous cycle of development' as discussed in the materials?

Accepted Answer

A process where rising incomes increase the opportunity cost of children, leading to a larger prime-age workforce and further economic growth.

Question 11

Between 1980 and 2017, what happened to the global extreme poverty rate according to the data provided?

Accepted Answer

It fell dramatically from 41.3% to 9.2%.

Question 12

Which of the following statements about the impact of the transportation-communication revolution is most accurate?

Accepted Answer

It led to direct and indirect gains for developing countries, especially those with fewer geographic disadvantages.

Question 13

Suppose a developing country adopts the successful business practices of a high-income country. According to the study materials, what factor has made this process easier in recent decades?

Accepted Answer

Reductions in transportation and communication costs

Question 14

Which of the following is a key lesson from two centuries of economic development, as highlighted in the materials?

Accepted Answer

Sound institutions and policies are essential for sustained economic growth.

Question 15

If a country’s 15-year moving average annual growth rate of real per capita GDP is consistently below 1%, what is a likely long-term consequence according to the study materials?

Accepted Answer

Stagnation in living standards and slow progress in development

Question 16

Which of the following best explains why some developing countries have experienced rapid growth since 1970, while others have not?

Accepted Answer

Countries with fewer geographic disadvantages and better institutions benefited more from global trade and technology transfer.

Question 17

Which of the following is a plausible reason why the economic progress of the past several decades may not be maintained in the future, according to the study materials?

Accepted Answer

There is no assurance that sound institutions will continue to be adopted, as they depend on the political process.

Question 18

A country’s international trade to GDP ratio increases sharply after 1990. According to the study materials, what is the most likely explanation?

Accepted Answer

The country experienced a reduction in transportation and communication costs, facilitating greater trade.

Question 19

Which of the following best describes the relationship between the share of the prime working-age population and economic growth?

Accepted Answer

A higher share of the prime working-age population tends to enhance productivity and economic growth.

Economic Development and Growth: Institutions, Geography, and the Transportation-Communication Revolution

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