Which of the following empirical statements about low- income countries is NOT a valid

generalization about changes since 1990?

Rapid population growth has more than offset GNP growth.
Which indicator is inversely related (meaning that it falls as per capita income rises) to per
capita income?
adult illiteracy rate
infant mortality rate
share of the population living in rural areas
Which of the following statements is true about globalization?
It is a term used by different people to mean different things.
It covers more than just economics.
It is not a new phenomenon.
If a country achieves a rapid increase in per capita income by discovering new oil reserves, it is
experiencing:
growth but not development.
GNP or GDP divided by total population provides a measure of:
per capita income
A country's nominal GNP for a given year is defined as the total market value of:
all final goods and services produced
In order to effectively compare levels of GDP per capita across countries, it is necessary to
convert GDP per capita into a
common currency
Most economists agree that an effective way of comparing income levels between countries
around the world is through the use of:
purchasing power parity
The human development index is a composite of three basic measures of human welfare.
Which of the following is NOT a component of the human development index?
infant mortality rate
The Easterlin paradox concerns itself with the study of:
happiness
Economists think that economic growth depends fundamentally on all of the following EXCEPT:
inequality
The capital- output ratio provides an indication of the:
capital intensity of the production process
In the Solow model, investment comes from
saving
According to the Solow model, the relationship between saving and growth is not linear because
of
diminishing returns to capital in the production function.
Diminishing returns to capital means that as you add more capital:
the additional contribution to output eventually declines
Being landlocked means that
there will be great challenges in the development of external trade.
According to the Harrod-Domar model, what effect does an increase in the saving rate have on
long-term growth?
leads to an increase
One of the problems of the Harrod-Domar framework is that its fixed proportion production
function does not allow for any:
substitution between labor and capital
Which of the following statements is true about new growth theories and the Solow and Harrod-
Domar models?
Both underline the importance of factor accumulation & productivity in the growth process.
When an economy increases the amount of capital per worker, it is called:
capital deepening
The idea that relatively poor nations should have higher rates of growth of real GDP per capita
than relatively rich nations is known as the
convergence hypothesis.
the general capital accumulation equation for the Solow Model
Delta K=sy-(n+d)k
What is the meaning for delta k?
It is the investment per worker minus the amount of investment/worker or savings to keep
capital/worker constant
Steady state
sy=(n+d)k