What is Baran’s explanation for underdevelopment in Asia, Africa, and Latin America ?

monopolistic business from abroad

The Vicious circle theory states that ?

growing government assistance create addiction to welfare programs

low income levels create pressure for money creation

low income levels create pressure for cheap imports

low per capita incomes creates low savings that keep incomes low

The Vicious circle theory indicates that ?

a country is poor because it has lower productivity but high savings

as countries grow richer they save less

poverty perpetuates itself in mutually reinforcing circles on supply and demand sides

The Ultimate effect of the invisible hand of Adam Smith is that in a competitive economy everyone ?

will increase their profits in a free market

benefits if each acts in his/her own interest

will increase their profits in a free market

should act to maximize economic growth

should act to promote the public interest

The Lawis model explains how growth gets started in a less developed economy ?

with an average product of labor in agriculture that is negative

with a downward-sloping supply curve of labor

with a marginal productivity of labor zero or negligible in industry

with a traditional agricultural sector and an industrial capitalist sector

The Harrod Domar growth model suggests that growth is ?

directly related to the capital/output ratio and inversely related to savings

directly related to savings and inversely related to the capital/output ratio

directly related to the capital/output ratio and inversely related to savings

indirectly related to savings and the capital/output ratio

directly related to savings and the capital/output ratio

The essential difference between capitalism and socialism is that ?

capitalism grows through rent seeking and socialism grows through government direction

capitalism exploits the worker and socialism exploits the property owner

capitalism relies on the market to make economic decisions and socialism uses central planning

capitalism grows through rent seeking and socialism grows through government direction

capitalism relies on consumer satisfaction to dictate choices and socialism relies on producer satisfaction

Rostow’s economics stages are ?

the preconditions for consumption the replication the drive to maturity and the age of high mass consumption

The preconditions for takeoff, the takeoff, the drive to maturity and the age of creative destruction

The traditional society the preconditions for takeoff, the takeoff, the drive to maturity and the age of high mass consumption

the preconditions for consumption the replication the drive to maturity and the age of high mass consumption

the learning curve the age of high mass consumption post takeoff, and the drive to maturity

One criticism of Rostow’s theory of economic growth is that ?

much available data contradicts his thesis about the takeoff stage

there is no explanation of why growth occurs after takeoff

his hypothesis of the stages of growth is difficult to test empirically

Oil Exporting Countries Development

Organization for Economic Cooperation and Development and Development

Oil Exporting Countries Development

Organization for Environmental cooperative Department

Open Economies Caucus on Development

Karl Marx’s historical materialism views were shaped by all of the following EXCEPT ?

The rise of industrial and capitalist production

a growing spiritual rationalism

Criticisms of Rostow’s stages of development include ?

the difficulty of testing the stages scientifically

conditions for takeoff are contradicted by historical evidence

characteristics of one stage are not unique to that stage

Baran’s Neo-Marxist thesis has been criticized for ignoring the probability that power is frequently ?

derived from domestic opponents of nationalism

based on an alliance between landowners and peasants

based on an alliance between peasants and the foreign bourgeoisie

transferred from one elite to another when revolution occurs

derived from domestic opponents of nationalism

According to the supply side of the vicious circle theory of development a country is poor because ?

underemployment is too widespread

technology levels do not allow for self sufficiency

it was previously too poor to save and invest

underemployment is too widespread

22 + Mcqs in Theories of Economic Development in Economics Page 1 McqOptions

1.	Which of the following was not a classical economist ?
A.	Adam Smith
B.	Thomas R. Malthus
C.	John Stuart Mill
D.	John Maynard Keynes
Answer» E.

Discussion

2.	What is Baran’s explanation for underdevelopment in Asia, Africa, and Latin America ?
A.	monopolistic business from abroad
B.	reactionary ruling coalitions
C.	weak domestic middle class
D.	All of the above
Answer» E.

Discussion

3.	The Vicious circle theory states that ?
A.	growing government assistance create addiction to welfare programs
B.	low income levels create pressure for money creation
C.	low income levels create pressure for cheap imports
D.	low per capita incomes creates low savings that keep incomes low
Answer» E.

Discussion

4.	The Vicious circle theory indicates that ?
A.	a country is poor because it has lower productivity but high savings
B.	as countries grow richer they save less
C.	poverty perpetuates itself in mutually reinforcing circles on supply and demand sides
D.	market size is large in LDCs
Answer» D. market size is large in LDCs

Discussion

5.	The Ultimate effect of the invisible hand of Adam Smith is that in a competitive economy everyone ?
A.	benefits if each acts in his/her own interest
B.	will increase their profits in a free market
C.	should act to maximize economic growth
D.	should act to promote the public interest
Answer» B. will increase their profits in a free market

Discussion

6.	The synchronized application of capital to a wide range of different industries is called __________ by its advocates?
A.	balanced growth
B.	capitalization
C.	elasticity of capital
D.	indivisibilities
Answer» B. capitalization

Discussion

7.	The Lawis model explains how growth gets started in a less developed economy ?
A.	with an average product of labor in agriculture that is negative
B.	with a downward-sloping supply curve of labor
C.	with a marginal productivity of labor zero or negligible in industry
D.	with a traditional agricultural sector and an industrial capitalist sector
Answer» E.

Discussion

8.	The Harrod Domar growth model suggests that growth is ?
A.	directly related to savings and inversely related to the capital/output ratio
B.	directly related to the capital/output ratio and inversely related to savings
C.	indirectly related to savings and the capital/output ratio
D.	directly related to savings and the capital/output ratio
Answer» B. directly related to the capital/output ratio and inversely related to savings

Discussion

9.	The essential difference between capitalism and socialism is that ?
A.	capitalism exploits the worker and socialism exploits the property owner
B.	capitalism relies on the market to make economic decisions and socialism uses central planning
C.	capitalism grows through rent seeking and socialism grows through government direction
D.	capitalism relies on consumer satisfaction to dictate choices and socialism relies on producer satisfaction
Answer» C. capitalism grows through rent seeking and socialism grows through government direction

Discussion

10.	Rostow’s economics stages are ?
A.	The preconditions for takeoff, the takeoff, the drive to maturity and the age of creative destruction
B.	The traditional society the preconditions for takeoff, the takeoff, the drive to maturity and the age of high mass consumption
C.	the preconditions for consumption the replication the drive to maturity and the age of high mass consumption
D.	the learning curve the age of high mass consumption post takeoff, and the drive to maturity
Answer» C. the preconditions for consumption the replication the drive to maturity and the age of high mass consumption

Discussion

11.	One criticism of Rostow’s theory of economic growth is that ?
A.	much available data contradicts his thesis about the takeoff stage
B.	there is no explanation of why growth occurs after takeoff
C.	his hypothesis of the stages of growth is difficult to test empirically
D.	All of the above are correct
Answer» E.

Discussion

12.	OECD stands for ?
A.	Organization for Economic Cooperation and Development and Development
B.	Oil Exporting Countries Development
C.	Organization for Environmental cooperative Department
D.	Open Economies Caucus on Development
Answer» B. Oil Exporting Countries Development

Discussion

13.	Karl Marx’s historical materialism views were shaped by all of the following EXCEPT ?
A.	The French Revolution
B.	The rise of industrial and capitalist production
C.	Political and labor revolts
D.	a growing spiritual rationalism
Answer» E.

Discussion

14.	For Rosentein Rodan a major indivisibility is in ?
A.	Supply
B.	infrastructure
C.	agriculture
D.	services
Answer» C. agriculture

Discussion

15.	Feudalism was undercut by?_x005F_x000D_I- the migration of serfs to the town_x005F_x000D_II- factory competition with handicraft and manorial production_x005F_x000D_III- expanded transport trade, discovery and new international markets_x005F_x000D_IV- the rise of the business corporation
A.	I and II only
B.	II and III only
C.	I, II and III only
D.	IV only
Answer» D. IV only

Discussion

16.	During the 1980s and 1990s a period of economic conservative governments in much of West and Japan, a leading approach among development economists was ?
A.	neoclassicism
B.	Marxism
C.	Rostow’s model
D.	classical appraoch
Answer» B. Marxism

Discussion

17.	Criticisms of Rostow’s stages of development include ?
A.	the difficulty of testing the stages scientifically
B.	conditions for takeoff are contradicted by historical evidence
C.	characteristics of one stage are not unique to that stage
D.	All of the above are correct
Answer» E.

Discussion

18.	Baran’s Neo-Marxist thesis has been criticized for ignoring the probability that power is frequently ?
A.	based on an alliance between landowners and peasants
B.	based on an alliance between peasants and the foreign bourgeoisie
C.	transferred from one elite to another when revolution occurs
D.	derived from domestic opponents of nationalism
Answer» D. derived from domestic opponents of nationalism

Discussion

19.	Adam Smith advocated ?_x005F_x000D_I- laissez faire_x005F_x000D_II- the invisible hand_x005F_x000D_III- free trade policy_x005F_x000D_IV- competitive markets
A.	I and II only
B.	II and III only
C.	I , II and III only
D.	I , II , III and IV
Answer» E.

Discussion

20.	According to the supply side of the vicious circle theory of development a country is poor because ?
A.	technology levels do not allow for self sufficiency
B.	it was previously too poor to save and invest
C.	underemployment is too widespread
D.	resource allocation is poor
Answer» C. underemployment is too widespread

Discussion

21.	A theory ?_x005F_x000D_I- is a systematic explanation of relationships between economic variables_x005F_x000D_II- explains causal relationships among variables_x005F_x000D_III- provides a basis for policy_x005F_x000D_IV- provides an explanation of all factors influencing economic growth.
A.	I only
B.	I and II only
C.	I , II and III only
D.	IV only
Answer» D. IV only

Discussion

22.	A major dependency theorist Andre Gunder Frank Suggests that the following economic activities have contributed to underdevelopment:_x005F_x000D_I- Workers migrating from villages to foreign-dominated urban complexes_x005F_x000D_II- Forming an unskilled labor force to work in factories and mines and on plantations_x005F_x000D_III- Replacing indigenous enterprises with technologically more advanced global subsidiary companies_x005F_x000D_IV- Closing the economy to trade with and investment from, developed countries
A.	I and II only
B.	II and III only
C.	I, II and III only
D.	I , II III and IV
Answer» D. I , II III and IV

Discussion

Explore topic-wise MCQs in Economics.

Which of the following was not a classical economist ?

What is Baran’s explanation for underdevelopment in Asia, Africa, and Latin America ?

The Vicious circle theory states that ?

The Vicious circle theory indicates that ?

The Ultimate effect of the invisible hand of Adam Smith is that in a competitive economy everyone ?

The synchronized application of capital to a wide range of different industries is called __________ by its advocates?

The Lawis model explains how growth gets started in a less developed economy ?

The Harrod Domar growth model suggests that growth is ?

The essential difference between capitalism and socialism is that ?

Rostow’s economics stages are ?

One criticism of Rostow’s theory of economic growth is that ?

OECD stands for ?

Karl Marx’s historical materialism views were shaped by all of the following EXCEPT ?

For Rosentein Rodan a major indivisibility is in ?

Feudalism was undercut by?_x005F_x000D_I- the migration of serfs to the town_x005F_x000D_II- factory competition with handicraft and manorial production_x005F_x000D_III- expanded transport trade, discovery and new international markets_x005F_x000D_IV- the rise of the business corporation

During the 1980s and 1990s a period of economic conservative governments in much of West and Japan, a leading approach among development economists was ?

Criticisms of Rostow’s stages of development include ?

Baran’s Neo-Marxist thesis has been criticized for ignoring the probability that power is frequently ?

Adam Smith advocated ?_x005F_x000D_I- laissez faire_x005F_x000D_II- the invisible hand_x005F_x000D_III- free trade policy_x005F_x000D_IV- competitive markets

According to the supply side of the vicious circle theory of development a country is poor because ?

A theory ?_x005F_x000D_I- is a systematic explanation of relationships between economic variables_x005F_x000D_II- explains causal relationships among variables_x005F_x000D_III- provides a basis for policy_x005F_x000D_IV- provides an explanation of all factors influencing economic growth.