Q.1 What is the primary focus of development economics?
Studying stock market fluctuations
Analyzing the growth and development of economies
Managing day-to-day business operations
Regulating international trade policies
Explanation - Development economics studies how economies grow, develop, and improve the living standards of people, especially in less-developed countries.
Correct answer is: Analyzing the growth and development of economies
Q.2 Which of the following is considered a key indicator of economic development?
Population size
Gross Domestic Product per capita
Stock market index
Number of universities
Explanation - GDP per capita measures the average economic output per person and is commonly used as an indicator of economic development.
Correct answer is: Gross Domestic Product per capita
Q.3 Human development index (HDI) includes which of the following components?
Income, life expectancy, and education
Exports, imports, and savings
Government spending, taxes, and inflation
Population density and urbanization
Explanation - HDI measures development by combining indicators of income, health (life expectancy), and education levels.
Correct answer is: Income, life expectancy, and education
Q.4 Which of the following best defines economic growth?
Increase in the population of a country
Increase in a country's real output or GDP
Improvement in political stability
Increase in number of schools and hospitals
Explanation - Economic growth refers specifically to the increase in the production of goods and services in an economy over time.
Correct answer is: Increase in a country's real output or GDP
Q.5 What distinguishes economic development from economic growth?
Economic growth includes social and cultural factors, economic development does not
Economic development focuses on improvements in living standards, economic growth only measures output
Economic development is short-term, economic growth is long-term
They are exactly the same
Explanation - Economic development is broader, including income distribution, health, education, and standard of living, while economic growth mainly looks at GDP.
Correct answer is: Economic development focuses on improvements in living standards, economic growth only measures output
Q.6 Which of the following is NOT a typical characteristic of developing countries?
High levels of poverty
Low per capita income
Advanced technological infrastructure
Dependence on agriculture
Explanation - Developing countries usually lack advanced infrastructure and technology compared to developed countries.
Correct answer is: Advanced technological infrastructure
Q.7 Which concept refers to the structural transformation of an economy from agriculture to industry and services?
Industrialization
Urbanization
Modernization
Structural transformation
Explanation - Structural transformation involves shifts in employment and output from agriculture to industry and services, which is a key aspect of development.
Correct answer is: Structural transformation
Q.8 Which economist is most closely associated with the concept of 'stages of economic growth'?
Adam Smith
Rostow
Keynes
Marx
Explanation - Walt Rostow proposed the 'Stages of Economic Growth' model describing how countries transition from traditional to modern economies.
Correct answer is: Rostow
Q.9 Which of the following is considered a non-economic indicator of development?
Life expectancy
GDP growth rate
Capital formation
Industrial output
Explanation - Non-economic indicators of development focus on health, education, and quality of life rather than monetary measures.
Correct answer is: Life expectancy
Q.10 Which factor is critical for human capital formation in developing countries?
Military expenditure
Investment in education and health
Import restrictions
Agricultural subsidies
Explanation - Human capital development requires education and health improvements to increase productivity and living standards.
Correct answer is: Investment in education and health
Q.11 Which of the following best represents sustainable development?
Maximizing GDP growth regardless of environmental impact
Development that meets present needs without compromising future generations
Focusing solely on industrial growth
Reducing population growth at all costs
Explanation - Sustainable development emphasizes balancing economic growth with environmental and social responsibility for future generations.
Correct answer is: Development that meets present needs without compromising future generations
Q.12 Which of the following best explains 'poverty trap'?
A situation where poverty leads to further poverty without intervention
Temporary unemployment due to seasonal factors
High inflation reducing real wages
A government policy to reduce inequality
Explanation - A poverty trap occurs when low income prevents investment in education, health, or productive assets, perpetuating poverty across generations.
Correct answer is: A situation where poverty leads to further poverty without intervention
Q.13 Which of the following is a primary source of economic growth in developing countries?
Technological innovation and capital accumulation
Stock market speculation
Import tariffs
Tax collection efficiency
Explanation - Economic growth in developing countries often depends on investment in physical capital and adoption of new technologies.
Correct answer is: Technological innovation and capital accumulation
Q.14 Which of the following is a limitation of using GDP as the sole measure of development?
It ignores population growth
It does not reflect income distribution or quality of life
It is difficult to calculate
It only measures industrial output
Explanation - GDP measures economic output but does not capture well-being, inequality, or health and education standards.
Correct answer is: It does not reflect income distribution or quality of life
Q.15 Which sector contributes the largest share of employment in most developing economies?
Agriculture
Industry
Services
Information Technology
Explanation - In developing countries, agriculture typically employs the largest portion of the labor force despite lower productivity.
Correct answer is: Agriculture
Q.16 Which of the following is considered a structural problem in developing economies?
Unemployment and underemployment
High literacy rates
Strong export competitiveness
Balanced fiscal policies
Explanation - Structural problems like unemployment, underemployment, and dependence on a single sector hinder long-term development.
Correct answer is: Unemployment and underemployment
Q.17 Which concept is associated with Amartya Sen's approach to development?
Growth-centric development
Capability approach
Classical growth model
Dependency theory
Explanation - Amartya Sen emphasized that development should enhance people's capabilities to live a life they value, not just increase income.
Correct answer is: Capability approach
Q.18 Which of the following is a measure of inequality in development?
Gini coefficient
GDP per capita
Inflation rate
Trade balance
Explanation - The Gini coefficient quantifies income or wealth inequality, showing disparities within a population.
Correct answer is: Gini coefficient
Q.19 Which factor is most important in reducing poverty in developing countries?
Increase in foreign aid alone
Investment in education, health, and infrastructure
Reduction in stock market volatility
Strict trade protectionism
Explanation - Sustainable poverty reduction requires improving human capital and physical infrastructure to boost productivity and opportunity.
Correct answer is: Investment in education, health, and infrastructure
Q.20 Which of the following best describes 'dual economy'?
An economy with two currencies
An economy with a modern industrial sector coexisting with a traditional agricultural sector
An economy with high inflation and unemployment
An economy with government and private sectors only
Explanation - Dual economy theory describes developing countries where a technologically advanced sector exists alongside a traditional, low-productivity sector.
Correct answer is: An economy with a modern industrial sector coexisting with a traditional agricultural sector
Q.21 Which of the following is a key challenge for developing countries in achieving sustainable development?
Environmental degradation
High literacy rates
Strong institutions
Excess industrialization
Explanation - Developing countries face the challenge of balancing economic growth with the sustainable use of natural resources and environmental protection.
Correct answer is: Environmental degradation
Q.22 Which policy is considered growth-oriented in development economics?
Promotion of investment and capital accumulation
Limiting industrial expansion
Reducing agricultural productivity
Restricting technology adoption
Explanation - Policies promoting investment in infrastructure, industry, and technology drive economic growth in developing countries.
Correct answer is: Promotion of investment and capital accumulation
Q.23 Which of the following best represents the term 'inclusive development'?
Development that benefits only the wealthy
Development that ensures equitable opportunities and benefits for all segments of society
Development focused on urban areas only
Development driven solely by exports
Explanation - Inclusive development aims to reduce inequalities and provide equal opportunities for all, including marginalized groups.
Correct answer is: Development that ensures equitable opportunities and benefits for all segments of society