ECO330 Economics of Development, Mention any three indicators
AECO 330w Suny Albany Economics of Development Questions
ECO 330: Economics of Development
1. (i) Mention any three indicators of economic development that are included in the calculation of human development index (HDI). (ii) Why is HDI considered a better index of economic development than per capita real GDP?
2. (i) A country’s national saving is 20% of its national income and it needs $5 worth of capital for producing $1 worth of goods and services on the average. The economic planners want the country to grow at the rate of 10% per annum and expect that there will be no shortage of labor in the growth process. Is this growth rate consistent with what you have learned from the Harrod-Domar Model? If not, how can the planners make a plan to achieve a 10% growth rate? (ii) In the Lewis model, how are the real wage rates determined in the modern sector? LI 12
3. (1) In the graph that is drawn above, name the variables measured on the horizontal and vertical axes. (ii) Which line in the graph is considered the line of equal income distribution and why? Is it the diagonal, L, or L? (iii) Which one of the two Lorenz curves (Li and L2) shows greater inequality in person income distribution and why?
4. Describe four stages of demographic transition in a typical LDC and compare them with the stages of demographic transition in Western Europe.
5. (i) What is progressive taxation? (ii) Many developing countries use progressive taxation to achieve greater equality in income distribution. Mention any two problems of this policy. 6. In the context of the Lewis Model, briefly describe the process of modern sector enlargement and its effects on poverty and inequality.
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