Environmental Economics Important Objective Questions with Answers

environmental economicsEnvironmental Economics Important Objective Questions:

1. One criticism of Rostow’s theory of economic growth is that a. much available data contradicts his
thesis about the takeoff stage.

a. all of the above are correct.
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. none of the above.

2. 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.

3. 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.

4. 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.

a. derived from domestic opponents of nationalism.

b. based on an alliance between peasants and the foreign bourgeoisie.
c. transferred from one elite to another when revolution occurs.
d. none of the above

5. 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 income creates low savings that keep incomes low.

6. 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.

7. Surplus labor theories assume that

a. LDCs are overpopulated.
b. labor contributes nothing to output in LDCs.
c. the marginal product of labor is close to zero in LDCs.
d. urban unemployment is high in LDCs.

8. A theory

I is a systematic explanation of relationships between economic variables.
II explains causal relationships among variables.
III provides a basis for policy.
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.

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

a. neoclassicism.
b. Marxism.
c. Rostow’s model.
d. the classical approach.

10. Which of the following was not a classical economist?

a. Adam Smith.
b. Thomas R. Malthus.
c. John Stuart Mill.
d. John Maynard Keynes.

11. Adam Smith advocated
I laissez-faire.

II the invisible hand.

III free-trade policy.

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

12. 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.

13. Feudalism was undercut by

I the migration of serfs to the town.
II factory competition with handicraft and manorial production.
III expanded transport, trade, discovery, and new international markets.
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

14. Rostow’s economic 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
d. the learning curve, the age of high mass consumption, post-takeoff, and the drive to maturity.

15. 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.

16. 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.

17. For Rosenstein-Rodan a major indivisibility is in

a. supply.
b. infrastructure.
c. agriculture.
d. services.

18. A major dependency theorist, Andre Gunder Frank suggests that the following economic activities
have contributed to underdevelopment:

I Workers migrating from villages to foreign-dominated urban complexes.
II Forming an unskilled labor force to work in factories and mines and on plantations.
III Replacing indigenous enterprises with technologically more advanced, global, subsidiary companies.
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.

19. OECD stands for

a. Organization for Economic Cooperation and Development.
b. Oil Exporting Countries’ Development.
c. Organization for Environmental Cooperative Department.
d. Open Economies’ Caucus on Development.

20. 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.