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Question 1: True or False (8 Points) : School of Advanced Education Programs

The document outlines a final exam for a Development Economics course at the National Economics University, including true or false questions and problem-solving tasks related to economic models and income distribution. It covers topics such as the Lucas and Solow models, Gini coefficient, Cobb-Douglas production function, and income inequality in Pakistan. The exam is designed to assess students' understanding of key concepts in development economics within a 60-minute timeframe.

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Tieng Anh 24
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49 views1 page

Question 1: True or False (8 Points) : School of Advanced Education Programs

The document outlines a final exam for a Development Economics course at the National Economics University, including true or false questions and problem-solving tasks related to economic models and income distribution. It covers topics such as the Lucas and Solow models, Gini coefficient, Cobb-Douglas production function, and income inequality in Pakistan. The exam is designed to assess students' understanding of key concepts in development economics within a 60-minute timeframe.

Uploaded by

Tieng Anh 24
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

NATIONAL ECONOMICS UNIVERSITY FINAL EXAM

SCHOOL OF ADVANCED EDUCATION PROGRAMS Subject: Development Economics 1


Program: Excellent Educational Program
Intake: Class: DE
Venue: National Economics University
Date: 10/12 /2021
Time limit: 60 minutes

Question 1: True or false (8 points)


Whether each below statement is true or false and explain the reasons (Each question
is worth 1 points)
1. Both the Lucas and Solow models assume that technological progress is the most
important factor in the long-term growth of the economy.
2. Development Economics has a greater scope than Economics
3. The Gini coefficient provides a measure of the level of poverty.
4. The income indicator used to measure economic growth is Gross Domestic Product
(GDP).
5. For any two countries, the one with the bigger per capita GDP will have a lower
poverty rate
6. According to Simon Kuznets, the relationship between GNI per capita and inequality
in the distribution of income can be expressed as a strictly decreasing relationship
7. The price is use in calculating economic growth is current and constant price
8. All developing countries share the same characteristics in terms of the level of
income and living standard
Question 2: (2 point)

1. Given the Cobb – Douglas production function Y= AKαLβ,


economic growth rate is 7.8%; Growth rate of capital stock is 7%; Growth rate of labor
force is 2%;  = 0,6 (a weight on capital typically set equal to capital’s share in national
income)
a. Calculate the rate of contribution of each component to the growth rate in output?
b. Comment on this country's growth model
2. World Bank data show that in 1995, the size distribution of income of Pakistan was
(5,10,15, 25, 45).
a. Plot the Lorenz curves of Pakistan.
b. What was the cumulative income share of the bottom 40% of households in Pakistan
and give conclusion of income inequality in this country?

1|Page ote: Open Book

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