EC2B02U

DEVELOPMENT AND ENVIRONMENTAL ECONOMICS
1.
a)
b)
c)

What is a paradigm?
It is a diagram of development.
It is the way development takes place.
It is a thinking model providing a holistic picture of a process involving a network of interrelationships.

2.
a)
b)
c)

Paradigm thinking is necessary to avoid dealing with isolated factors of development help analyzing cause and effect of phenomena identify urgent action

3. Economic growth is not a sufficient condition of development, because
a) it does not help poverty reduction
b) a country must also have an educated workforce
c) there are several other aspects of development
4.
a)
b)
c)

Economic growth is pivotal, because it is easier to achieve than the other aspects of development it has a symbiotic link with the other aspects of development it helps generate savings for investment

5.
a)
b)
c)

GDP is not a sufficient indicator of development because, some economic activities are left out of the calculation large countries have bigger GDP it does not reflect how income is distributed

6.
a)
b)
c)

GDP per capita is a useful indicator because, it helps inter country comparison of living standards it helps to understand what each individual earns in a country it is a better indicator than total GDP

7.
a)
b)
c)

To make GDP per capita internationally comparable, they must be calculated in US$ they should be calculated in the strongest international currency they can be calculated in any currency adjusted for purchasing power in different countries. 8.
a)
b)
c)

The Lorenz curve is a good indicator of development since it tells you the percentage of poor people in a country the degree of inequality of income distribution the quality of life in a country

9.
a)
b)
c)

The Gini Coefficient is a better indicator of income