Q.1 Who is known as the father of modern economic growth theory?
Adam Smith
Ragnar Nurkse
Robert Solow
Karl Marx
Explanation - Robert Solow developed the Solow Growth Model, emphasizing the role of capital accumulation, labor, and technology in economic growth.
Correct answer is: Robert Solow
Q.2 According to Rostow's stages of economic growth, which stage comes immediately after the 'Traditional Society'?
Take-off
Preconditions for take-off
Drive to maturity
Age of high mass consumption
Explanation - Rostow's model suggests that societies progress from a traditional society to preconditions for take-off, where economic conditions improve to allow sustained growth.
Correct answer is: Preconditions for take-off
Q.3 Which theory emphasizes that underdeveloped countries are trapped in a cycle of low savings and low investment?
Big Push Theory
Vicious Circle of Poverty
Dependency Theory
Dual Sector Model
Explanation - The Vicious Circle of Poverty theory explains that poor countries remain poor because low income leads to low savings and investment, which in turn perpetuates poverty.
Correct answer is: Vicious Circle of Poverty
Q.4 The 'Big Push' theory of economic development was proposed by:
Ragnar Nurkse
Rostow
W.W. Rostow
Arthur Lewis
Explanation - Ragnar Nurkse proposed that developing economies require a substantial initial investment across multiple sectors to break out of underdevelopment, known as the 'Big Push'.
Correct answer is: Ragnar Nurkse
Q.5 Which model explains development as the movement of labor from traditional agriculture to modern industry?
Lewis Dual Sector Model
Solow Growth Model
Nurkse's Big Push
Rostow's Stages
Explanation - Arthur Lewis' Dual Sector Model highlights the transfer of surplus labor from the traditional agricultural sector to the modern industrial sector as a driver of economic development.
Correct answer is: Lewis Dual Sector Model
Q.6 Which theory emphasizes that foreign investment can create dependency in developing countries?
Dependency Theory
Big Push Theory
Rostow's Stages
Vicious Circle of Poverty
Explanation - Dependency Theory suggests that underdeveloped countries become dependent on developed countries due to unequal trade, foreign investment, and economic structures that limit self-sustained growth.
Correct answer is: Dependency Theory
Q.7 According to Rostow, which stage represents the final stage of economic growth?
Take-off
Drive to maturity
Preconditions for take-off
Age of high mass consumption
Explanation - Rostow's final stage, 'Age of High Mass Consumption,' is when economies achieve high levels of mass consumption and welfare.
Correct answer is: Age of high mass consumption
Q.8 Which development theory suggests that a coordinated large-scale investment is necessary to overcome market failures?
Big Push Theory
Vicious Circle of Poverty
Dependency Theory
Dual Sector Model
Explanation - The Big Push Theory argues that developing countries need coordinated investments across sectors to generate sufficient demand and overcome underdevelopment.
Correct answer is: Big Push Theory
Q.9 Who developed the concept of the 'Circular Cumulative Causation' in development economics?
Myrdal
Nurkse
Lewis
Rostow
Explanation - Gunnar Myrdal introduced 'Circular Cumulative Causation,' explaining that economic advantages and disadvantages tend to reinforce themselves over time, leading to regional disparities.
Correct answer is: Myrdal
Q.10 Which model assumes surplus labor exists in agriculture and can be transferred to industry without loss of output?
Lewis Model
Solow Growth Model
Rostow Model
Nurkse Big Push
Explanation - The Lewis Dual Sector Model assumes that developing economies have surplus labor in agriculture that can be moved to industry, increasing industrial output without reducing agricultural output.
Correct answer is: Lewis Model
Q.11 The theory of 'Balanced Growth' was proposed by:
Ragnar Nurkse
Arthur Lewis
Gunnar Myrdal
Rostow
Explanation - Nurkse advocated the 'Balanced Growth' strategy, suggesting simultaneous investment in multiple sectors to avoid bottlenecks and ensure sustainable development.
Correct answer is: Ragnar Nurkse
Q.12 Which theory highlights the importance of social, political, and cultural factors in economic development?
Myrdal’s Theory
Lewis Model
Solow Growth Model
Rostow’s Stages
Explanation - Gunnar Myrdal emphasized that economic development is influenced not only by economic factors but also by social, political, and institutional conditions.
Correct answer is: Myrdal’s Theory
Q.13 Which theory suggests that underdevelopment is caused by external exploitation?
Dependency Theory
Big Push Theory
Lewis Model
Rostow Model
Explanation - Dependency Theory argues that developing countries are underdeveloped due to historical exploitation and unequal international economic relationships with developed nations.
Correct answer is: Dependency Theory
Q.14 In the 'Vicious Circle of Poverty', low income leads to:
High savings
High investment
Low savings and low investment
Rapid industrialization
Explanation - The Vicious Circle of Poverty theory explains that low income reduces savings, which in turn reduces investment and perpetuates poverty.
Correct answer is: Low savings and low investment
Q.15 Rostow’s 'Take-off' stage is characterized by:
High mass consumption
Rapid growth in a few sectors
Traditional agricultural dominance
Dependency on foreign aid
Explanation - The 'Take-off' stage is marked by accelerated growth in certain key sectors of the economy, initiating broader development.
Correct answer is: Rapid growth in a few sectors
Q.16 Which economist emphasized the importance of capital accumulation in economic growth?
Robert Solow
Arthur Lewis
Rostow
Gunnar Myrdal
Explanation - Robert Solow highlighted capital accumulation, labor force growth, and technological progress as the main drivers of long-term economic growth.
Correct answer is: Robert Solow
Q.17 Which theory is criticized for assuming a linear path of development for all countries?
Rostow’s Stages of Growth
Lewis Dual Sector Model
Dependency Theory
Big Push Theory
Explanation - Rostow’s model assumes all countries follow the same linear stages of development, which has been criticized as overly simplistic and Eurocentric.
Correct answer is: Rostow’s Stages of Growth
Q.18 The Dual Sector Model divides the economy into:
Industry and Services
Agriculture and Industry
Manufacturing and Technology
Exports and Imports
Explanation - The Dual Sector Model categorizes the economy into a traditional agricultural sector and a modern industrial sector to explain structural transformation during development.
Correct answer is: Agriculture and Industry
Q.19 Which theory argues that regional inequalities may widen during development due to self-reinforcing advantages?
Myrdal’s Cumulative Causation
Lewis Model
Big Push Theory
Rostow Model
Explanation - Myrdal’s theory of cumulative causation highlights that initial advantages in some regions attract more investment, reinforcing disparities over time.
Correct answer is: Myrdal’s Cumulative Causation
Q.20 Which development model is mainly concerned with breaking the poverty trap through investment?
Big Push Theory
Dependency Theory
Lewis Model
Rostow Stages
Explanation - The Big Push Theory focuses on coordinated investment across sectors to break the cycle of poverty and initiate self-sustaining growth.
Correct answer is: Big Push Theory
Q.21 Which economist’s theory focuses on the transfer of surplus labor to achieve industrial growth?
Arthur Lewis
Ragnar Nurkse
Robert Solow
Rostow
Explanation - Arthur Lewis proposed that moving surplus labor from agriculture to industry stimulates industrialization without harming agricultural output.
Correct answer is: Arthur Lewis
Q.22 Dependency Theory primarily critiques which type of economic relationship?
Trade and investment between developed and developing countries
Domestic agricultural policies
Local entrepreneurship
Industrialization within developing countries
Explanation - Dependency Theory argues that unequal trade and foreign investment reinforce underdevelopment in poorer nations.
Correct answer is: Trade and investment between developed and developing countries
Q.23 Which theory is considered a structuralist approach to development?
Dependency Theory
Rostow’s Stages
Lewis Model
Solow Growth Model
Explanation - Dependency Theory is structuralist as it examines how global economic structures shape and limit the development of poorer nations.
Correct answer is: Dependency Theory
Q.24 According to the Lewis Model, industrial growth is financed mainly by:
Foreign aid
Agricultural surplus
Government taxes
Exports
Explanation - The Lewis Model posits that surplus agricultural output can provide capital for industrial expansion, driving development.
Correct answer is: Agricultural surplus
Q.25 Which model of economic development highlights the sequential nature of stages from traditional society to high mass consumption?
Rostow’s Stages of Growth
Lewis Dual Sector Model
Solow Growth Model
Dependency Theory
Explanation - Rostow proposed a linear model where economies progress through distinct stages of development, culminating in high mass consumption.
Correct answer is: Rostow’s Stages of Growth