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NSSCO Development Studies 6136 practice questions

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Question 1Concepts and indicators of development

In development studies, which statement best defines the term 'development'?

  1. A temporary rise in a country's exports during a single financial year
  2. A population's movement from rural villages to urban areas
  3. A process of improving people's well-being and expanding their choices alongside economic growth Correct answer.
  4. The total value of goods produced by foreign companies inside a country

Explanation

Development is multidimensional: it combines rising incomes with better health, education and freedom of choice. It is therefore broader than growth alone and is judged over the long term rather than in one year.

Question 2Concepts and indicators of development

A country's GDP rises by 6% in a year while its population grows by 6% in the same year. What happens to GDP per capita?

  1. It rises by about 6%
  2. It falls by about 12%
  3. It stays roughly unchanged Correct answer.
  4. It rises by about 12%

Explanation

GDP per capita equals total GDP divided by population. If both grow at the same rate, the ratio is unchanged, so average output per person stays roughly constant.

Question 3Concepts and indicators of development

Which indicator is a direct measure of health status in a population?

  1. Gross national income per capita
  2. Inflation rate
  3. Adult literacy rate
  4. Life expectancy at birth Correct answer.

Explanation

Life expectancy at birth summarises how long people live and reflects nutrition, disease and health care. Income, literacy and inflation measure economic or educational conditions rather than health outcomes.

Question 4Concepts and indicators of development

The Human Development Index (HDI) combines three dimensions. Which set is correct?

  1. Income, employment and inflation
  2. Exports, imports and foreign aid
  3. Population, land area and resources
  4. Health, education and income Correct answer.

Explanation

HDI averages normalised scores for life expectancy (health), schooling (education) and GNI per capita (income). It thus treats development as broader than income alone.

Question 5Concepts and indicators of development

What does the term 'absolute poverty' mean in development studies?

  1. Falling below a fixed minimum standard of living needed for basic survival Correct answer.
  2. Living in a household that owns no land
  3. Being unemployed for more than twelve months
  4. Having less income than the average person in one's own country

Explanation

Absolute poverty is measured against a fixed threshold, such as the international poverty line, below which basic needs cannot be met. It is distinct from relative poverty, which compares people with others in the same society.

Question 6Concepts and indicators of development

Which of these is a stock measure rather than a flow measure?

  1. Annual national income
  2. Quarterly export earnings
  3. Monthly government spending
  4. Total national wealth at a point in time Correct answer.

Explanation

A stock is measured at a single moment, such as wealth or capital on a given date. Flows are measured over a period, such as income or spending during a year.

Question 7Concepts and indicators of development

A development plan is described as 'sustainable'. Which feature is most consistent with this description?

  1. It meets present needs without compromising future generations Correct answer.
  2. It relies entirely on foreign loans to fund consumption
  3. It concentrates all investment in one export commodity
  4. It maximises current output regardless of future costs

Explanation

Sustainability means present needs are met while preserving the resource base and opportunities available to future generations. Plans that exhaust resources or depend on fragile single sources undermine that aim.

Question 8Concepts and indicators of development

Which statement correctly distinguishes economic growth from economic development?

  1. Growth refers only to agriculture, while development refers only to industry
  2. Development is a rise in output, while growth refers only to welfare improvements
  3. Growth is a rise in output, while development also includes improvements in welfare and structure Correct answer.
  4. Growth and development are identical terms used interchangeably in all statistics

Explanation

Growth measures an increase in real output such as GDP, whereas development includes welfare, education, health and structural change. A country can grow without developing if the gains are narrow.

Question 9Concepts and indicators of development

A country reports GNI per capita of $4,000 using the Atlas method and $6,500 at purchasing power parity. What mainly explains the difference?

  1. The PPP figure measures wealth rather than income
  2. The Atlas method includes foreign aid receipts while PPP excludes them
  3. The PPP figure counts unpaid subsistence work while the Atlas figure does not
  4. The PPP conversion adjusts for differences in domestic price levels Correct answer.

Explanation

Purchasing power parity converts incomes using price levels for a comparable basket of goods, so lower prices in poorer countries raise the converted value. The Atlas method uses exchange rates averaged over several years instead.

Question 10Concepts and indicators of development

In the HDI, the income component is entered in logarithmic form. What is the main reason?

  1. To reflect diminishing returns of extra income to human welfare Correct answer.
  2. To convert income into a measure of wealth
  3. To remove the effect of population growth
  4. To allow income to be compared with life expectancy directly

Explanation

Logarithmic transformation means each additional dollar raises the index less at high income levels. This reflects the view that extra income contributes progressively less to well-being once basic needs are met.

Question 11Concepts and indicators of development

A country has a high GDP per capita but a low HDI rank. Which explanation is most plausible?

  1. Its income is unevenly distributed and social outcomes such as health and schooling are poor Correct answer.
  2. Its life expectancy is high but its income is low
  3. Its population is too small for HDI to be calculated reliably
  4. Its GDP is measured in local currency rather than dollars

Explanation

HDI captures health and education as well as income, so high average income can coexist with weak social indicators. Unequal distribution means the average income does not translate into broad welfare gains.

Question 12Concepts and indicators of development

Which pair of indicators is most useful for assessing gender inequality in development?

  1. Female literacy rate and share of women in paid employment Correct answer.
  2. Gross national income and inflation rate
  3. Life expectancy and land area
  4. Export volume and import volume

Explanation

Gender inequality is assessed with indicators that compare women's and men's education, employment and empowerment. Literacy and paid employment directly show whether women share in opportunities.

Question 13Concepts and indicators of development

The Gini coefficient of a country rises from 0.35 to 0.52. What does this indicate?

  1. The poverty line has been raised
  2. Average income has fallen
  3. Income distribution has become more unequal Correct answer.
  4. Income distribution has become more equal

Explanation

The Gini coefficient ranges from 0 (perfect equality) to 1 (perfect inequality). A rise from 0.35 to 0.52 therefore signals a wider gap in income distribution.

Question 14Concepts and indicators of development

Why is the international poverty line updated periodically by international agencies?

  1. To ensure every country adopts the same currency
  2. To measure wealth rather than income
  3. To replace national poverty lines entirely
  4. To reflect changes in the prices of basic goods across poor countries Correct answer.

Explanation

The line is expressed in purchasing power terms, so it must be revised when new price data show what a basic basket costs. This keeps the threshold meaningful across countries and over time.

Question 15Concepts and indicators of development

A government reports that its literacy rate is 90%, but the definition used counts anyone who can write their own name. Why should this figure be treated with caution?

  1. A narrow definition of literacy can overstate functional reading and writing skills Correct answer.
  2. The figure ignores the size of the population
  3. Literacy rates are always measured by sampling and therefore never reliable
  4. Literacy is an economic indicator and cannot be compared across countries

Explanation

Indicator values depend on how the concept is defined and measured. A minimal definition such as signing one's name captures far less than functional literacy needed for work and daily life.

Question 16Concepts and indicators of development

Which measure best captures the idea of 'relative poverty' in a high-income country?

  1. Households with no access to electricity
  2. Households unable to obtain any food for a week
  3. Households earning below 60% of median income Correct answer.
  4. Households living below the international poverty line

Explanation

Relative poverty compares a household's income with the typical income in its own society. A common threshold is a proportion of median income, which shifts as living standards change.

Question 17Concepts and indicators of development

Which combination of indicators is most appropriate for measuring progress towards the health-related Sustainable Development Goals?

  1. Inflation and unemployment
  2. Literacy rate and school enrolment
  3. GDP growth and export earnings
  4. Under-five mortality and maternal mortality ratios Correct answer.

Explanation

Health goals are tracked with outcome indicators such as child and maternal mortality, which reflect access to care and nutrition. Economic and education indicators belong to other goal areas.

Question 18Concepts and indicators of development

A country's GDP grows steadily but its Multidimensional Poverty Index barely improves. What is the most reasonable interpretation?

  1. The country has no poor people left
  2. Growth is not reaching the dimensions of health, education and living standards measured by the index Correct answer.
  3. The poverty index is unreliable because it does not use income
  4. The GDP data must be wrong because growth always reduces deprivation

Explanation

The MPI measures overlapping deprivations in health, education and living standards, which need not fall when output rises. Growth may be concentrated in sectors or groups that do not experience these deprivations.

Question 19Concepts and indicators of development

Which statement about the Human Development Index is a recognised limitation?

  1. It cannot be calculated for countries with fewer than ten million people
  2. It measures only environmental quality
  3. It uses national averages and therefore hides inequality within a country Correct answer.
  4. It includes no measure of income at all

Explanation

HDI values are national averages, so improvements can mask wide disparities between regions, sexes or income groups. The inequality-adjusted HDI was developed to address this weakness.

Question 20Concepts and indicators of development

A country's nominal GDP rises by 10% while prices rise by 12%. What happens to real GDP?

  1. It stays exactly unchanged
  2. It rises by about 22%
  3. It rises by about 2%
  4. It falls by about 2% Correct answer.

Explanation

Real GDP adjusts nominal GDP for price changes, so the growth rate is approximately nominal growth minus inflation. Here 10% minus 12% gives a real change of about minus 2%.

Question 21Concepts and indicators of development

Why can GDP per capita at purchasing power parity still mislead when comparing the well-being of two countries?

  1. It measures only the public sector
  2. It is always calculated in local currency
  3. It cannot be expressed per person
  4. It ignores non-marketed output, income distribution and environmental costs Correct answer.

Explanation

Even after price adjustment, GDP per capita excludes unpaid work, informal activity and environmental damage, and says nothing about how income is shared. Well-being comparisons therefore need complementary social and environmental indicators.

Question 22Concepts and indicators of development

A development index ranks Country A above Country B, but B has higher life expectancy and literacy while A has much higher income. What does this most likely reveal about the index?

  1. Its weighting scheme gives income a strong influence on the final score Correct answer.
  2. It measures only social indicators and ignores income
  3. It must contain an error because income cannot outweigh social indicators
  4. It uses population size as a weighting factor

Explanation

Composite indices produce rankings that depend on how each dimension is weighted and normalised. If income carries substantial weight, a high-income country can rank above one with better social outcomes.

Question 23Concepts and indicators of development

Two countries have the same Gini coefficient, but in one the poorest 20% receive 4% of income and in the other they receive 12%. What does this show?

  1. The country with 12% has the higher Gini coefficient
  2. Gini coefficients cannot be compared between countries
  3. The Gini coefficient must be wrong for one of the countries
  4. The Gini coefficient is identical in both cases and reveals nothing further about where inequality occurs Correct answer.

Explanation

A single summary statistic can be consistent with different distributions, so the same Gini may hide different shares going to the poorest groups. Analysts therefore also use quintile shares and other disaggregated measures.

Question 24Concepts and indicators of development

A government wants an indicator that responds quickly to a famine affecting part of the population. Which choice is most suitable?

  1. Average years of schooling
  2. Prevalence of undernourishment among young children Correct answer.
  3. Annual GDP per capita
  4. Total national wealth

Explanation

Child undernourishment is a sensitive outcome measure that changes when food access deteriorates, making it useful for early detection. Aggregate annual income and wealth averages move slowly and can conceal localised crises.

Question 25Concepts and indicators of development

In development studies, which term describes the total value of goods and services produced within a country's borders in a given year, regardless of who owns the production?

  1. Net national product
  2. Gross domestic product Correct answer.
  3. Gross national income
  4. Gross fixed capital formation

Explanation

Gross domestic product measures output produced inside a country's territorial boundaries, irrespective of whether the producers are resident or foreign-owned. Gross national income instead adds net income earned abroad by residents, so the two differ by cross-border income flows. This distinction matters when a country hosts large foreign-owned mines or factories.

Question 26Concepts and indicators of development

A household can afford enough food to meet minimum calorie needs but has no access to safe drinking water, sanitation or schooling. In development studies this situation is best described as:

  1. Voluntary poverty
  2. Absolute poverty Correct answer.
  3. Transient poverty
  4. Relative poverty

Explanation

Absolute poverty refers to deprivation below a fixed minimum standard of basic human needs, including food, water, shelter and basic services, not only income. The household falls below that fixed threshold in several dimensions at once. Relative poverty, by contrast, is defined against the living standards of others in the same society.

Question 27Concepts and indicators of development

A government wants a single indicator that shows whether the poorest households are gaining access to clean cooking fuel as national income rises. Which indicator is most directly suited to this purpose?

  1. The inflation rate measured by the consumer price index
  2. GDP per capita at market exchange rates
  3. Gross fixed capital formation as a share of GDP
  4. The share of the population with access to clean fuels and technologies for cooking Correct answer.

Explanation

The question asks about access to a specific service among poor households, so a direct access indicator is needed. The share of the population using clean fuels and technologies for cooking is measured at household level and can be disaggregated by income group. Aggregate income measures cannot show whether access has reached the poorest.

Question 28Concepts and indicators of development

A country's life expectancy at birth rises from 54 to 61 years over a decade while its GDP per capita barely changes. Which conclusion is most defensible?

  1. Economic development has improved in at least one non-income dimension despite stagnant output. Correct answer.
  2. The country must have experienced rising income inequality.
  3. Economic growth has clearly accelerated over the decade.
  4. The Human Development Index cannot register changes in health.

Explanation

Development is broader than income growth, and health is one of its core dimensions, so a substantial gain in life expectancy is evidence of improved well-being. Stagnant GDP per capita says nothing against this, since the two can move independently. The HDI does incorporate life expectancy, so it would register the change.

Question 29Concepts and indicators of development

Which statement best explains why gross national income per capita is preferred to gross domestic product per capita when comparing the welfare of residents of two countries with large cross-border labour flows?

  1. GNI per capita is adjusted for purchasing power while GDP per capita never is.
  2. GNI per capita counts only income earned in the informal sector.
  3. GNI per capita measures only the income of the richest households.
  4. GNI per capita excludes all income earned by foreign residents within the country and includes income residents earn abroad. Correct answer.

Explanation

GNI attributes output to the residents who receive the income, adding net factor income from abroad and removing income that accrues to non-residents. This matters where many workers send remittances home or where foreign firms repatriate profits. GDP per capita, being territorial, can misstate the resources actually available to residents.

Question 30Concepts and indicators of development

Two countries have identical HDI values, but in Country X the top 10% receive 45% of national income while in Country Y the top 10% receive 22%. A policy analyst argues the HDI alone is sufficient to compare welfare in the two countries. Which criticism of that argument is strongest?

  1. The HDI measures income distribution directly but uses an outdated poverty line.
  2. The HDI is calculated only for high-income countries, so the comparison is invalid.
  3. The HDI uses arithmetic means of component indices, so it ignores how income and capabilities are distributed within each population. Correct answer.
  4. The HDI values life expectancy more heavily than income, which makes it biased against Country X.

Explanation

The HDI aggregates national averages and therefore cannot reveal inequality in income or in health and education within a population. Two countries with the same average achievement can have very different distributions, as the stem shows. Distribution-sensitive measures such as the inequality-adjusted HDI were created precisely to address this gap.

Question 31Development theories and strategies

Which term describes the process by which a country's economy shifts from mainly agriculture to mainly manufacturing and services?

  1. Structural transformation Correct answer.
  2. Dependency reversal
  3. Demographic transition
  4. Import substitution

Explanation

Structural transformation refers to the long-run reallocation of output and employment away from agriculture toward industry and services, usually accompanied by rising productivity and urbanisation. It is a central concept in development theory because it explains how economies change composition as they grow.

Question 32Development theories and strategies

In Walt Rostow's stages of economic growth, which stage immediately follows 'the take-off'?

  1. The age of high mass consumption
  2. The traditional society
  3. The preconditions for take-off
  4. The drive to maturity Correct answer.

Explanation

Rostow's sequence runs from traditional society, through preconditions and take-off, to the drive to maturity and finally the age of high mass consumption. The drive to maturity follows take-off, when sustained growth spreads across sectors of the economy.

Question 33Development theories and strategies

Which statement best captures the core argument of dependency theory?

  1. Growth requires a strong state that owns all productive assets
  2. Poverty in the periphery results mainly from internal cultural attitudes
  3. Development of the periphery is constrained by its economic relationship with the centre Correct answer.
  4. Free markets automatically equalise incomes between rich and poor countries

Explanation

Dependency theorists argue that peripheral economies are locked into unequal exchange and surplus extraction by core capitalist countries, so their development is distorted rather than simply delayed. The relationship itself, not internal failings alone, is seen as the cause of underdevelopment.

Question 34Development theories and strategies

A government imposes high tariffs on imported consumer goods so that local firms can produce them instead. This policy is best described as:

  1. Export-led growth
  2. Trade liberalisation
  3. Structural adjustment
  4. Import substitution industrialisation Correct answer.

Explanation

Import substitution industrialisation protects domestic producers of manufactured goods with tariffs and quotas so that previously imported items are made locally. The aim is to build industrial capacity by shielding infant industries from foreign competition.

Question 35Development theories and strategies

Which of the following is a defining feature of the East Asian export-oriented growth model as practised by economies such as South Korea and Taiwan?

  1. Heavy protection of the domestic market with no export incentives
  2. State support for selected industries combined with strong export performance Correct answer.
  3. Reliance on primary commodity exports
  4. Complete absence of government intervention in industry

Explanation

East Asian newly industrialising economies combined targeted state support, such as credit and infrastructure, with a strong orientation toward manufactured exports. This mix of selective intervention and export discipline distinguishes the model from both pure laissez-faire and inward-looking protection.

Question 36Development theories and strategies

According to Arthur Lewis's dual-sector model, what happens to surplus labour in the traditional agricultural sector as the modern industrial sector expands?

  1. It remains permanently in agriculture because industry cannot absorb it
  2. It demands wages equal to industrial productivity immediately
  3. It is absorbed only through foreign direct investment
  4. It is transferred to the industrial sector at a wage only slightly above subsistence Correct answer.

Explanation

Lewis assumed that agriculture contains surplus labour whose marginal product is near zero, so workers can move to industry without reducing farm output. Industry can therefore draw on this labour at a wage close to subsistence, keeping profits high and reinvestment strong.

Question 37Development theories and strategies

Which indicator is used in the Human Development Index alongside life expectancy and education?

  1. The inflation rate
  2. Gross national income per capita Correct answer.
  3. The Gini coefficient
  4. The unemployment rate

Explanation

The Human Development Index combines health, measured by life expectancy, education, measured by schooling years, and standard of living, measured by gross national income per capita. It was designed to move beyond income alone while still including an income dimension.

Question 38Development theories and strategies

A country's GDP grows by 6 per cent in a year while its population grows by 4 per cent. What is the approximate growth rate of GDP per capita?

  1. 1.5 per cent
  2. 2 per cent Correct answer.
  3. 10 per cent
  4. 24 per cent

Explanation

GDP per capita growth is approximately the growth of total GDP minus population growth, so 6 per cent minus 4 per cent gives about 2 per cent. This shows why development economists stress population growth when assessing living standards.

Question 39Development theories and strategies

What does the Gini coefficient measure in development studies?

  1. The degree of inequality in the distribution of income or consumption Correct answer.
  2. The share of exports in total national output
  3. The rate of inflation over a decade
  4. The proportion of the population living in cities

Explanation

The Gini coefficient summarises how unevenly income or consumption is distributed, ranging from zero for perfect equality to one for perfect inequality. It is widely used because a single number allows comparison of inequality across countries and over time.

Question 40Development theories and strategies

Which of the following best illustrates the concept of 'appropriate technology' in a developing country context?

  1. A large dam built with imported machinery and foreign engineers
  2. A labour-intensive irrigation pump that is cheap to maintain with local parts Correct answer.
  3. A high-speed rail network linking major cities
  4. A fully automated factory requiring few workers

Explanation

Appropriate technology refers to techniques suited to local factor endowments, skills, and resources, often labour-intensive and easily maintained. A cheap, locally repairable pump fits this idea better than capital-intensive projects that require scarce skills and imports.

Question 41Development theories and strategies

What is the central purpose of structural adjustment programmes negotiated with the IMF and World Bank in the 1980s?

  1. To require policy reforms such as liberalisation and privatisation in exchange for loans Correct answer.
  2. To provide unconditional grants for social welfare
  3. To impose price controls on all consumer goods
  4. To ban all foreign investment

Explanation

Structural adjustment programmes attached conditions such as trade liberalisation, privatisation, and fiscal restraint to loan disbursement. They were intended to correct balance-of-payments problems and make economies more market-oriented, though critics highlighted social costs.

Question 42Development theories and strategies

Which criticism is most commonly made of using GDP per capita as a measure of development?

  1. It ignores income distribution, environmental damage, and non-market welfare Correct answer.
  2. It measures only the size of the informal sector
  3. It always overstates the value of subsistence farming
  4. It cannot be calculated for most countries

Explanation

GDP per capita captures average output but says nothing about how income is shared, the depletion of natural resources, or unpaid work and wellbeing. This is why alternative measures such as the HDI and genuine progress indicators were developed.

Question 43Development theories and strategies

The concept of 'sustainable development' as defined in the Brundtland Report emphasises:

  1. Maximising current output regardless of future costs
  2. Giving priority to industrial expansion over environmental protection
  3. Meeting present needs without compromising the ability of future generations to meet theirs Correct answer.
  4. Halting all economic growth permanently

Explanation

The Brundtland Report defined sustainable development as meeting the needs of the present without compromising the ability of future generations to meet their own needs. This balances economic, social, and environmental concerns rather than choosing growth or protection exclusively.

Question 44Development theories and strategies

Which of the following is a characteristic of the informal sector in many developing economies?

  1. Firms are always large multinational corporations
  2. Workers are fully covered by social security and written contracts
  3. Activities are unregistered, often unregulated, and lack social protection Correct answer.
  4. Wages are set by national collective bargaining agreements

Explanation

Informal sector activity typically operates outside official registration and regulation, so workers lack contracts, pensions, and safety protections. It is often the largest source of employment in low-income cities, which makes it central to development policy.

Question 45Development theories and strategies

What does the term 'microfinance' refer to in development strategies?

  1. Large government subsidies to heavy industry
  2. Small loans and financial services provided to low-income households and small enterprises Correct answer.
  3. Foreign aid given directly to national treasuries
  4. The trading of currencies on international markets

Explanation

Microfinance provides small-scale credit, savings, and insurance services to people excluded from formal banking, often without traditional collateral. It is used as a poverty-reduction strategy by enabling self-employment and small business activity.

Question 46Development theories and strategies

A government decides to invest heavily in primary education and rural clinics rather than in a large steel plant. Which development strategy does this most closely reflect?

  1. Export processing zones
  2. Basic needs and human capital approach Correct answer.
  3. Structural adjustment
  4. Import substitution industrialisation

Explanation

The basic needs approach prioritises health, education, and nutrition so that people's capabilities improve directly. Investing in schools and clinics rather than heavy industry reflects this focus on human capital and welfare.

Question 47Development theories and strategies

Which of the following best describes the 'demographic dividend'?

  1. The migration of skilled workers to richer countries
  2. A government grant paid to families with many children
  3. A rise in the dependency ratio caused by population ageing
  4. Economic growth potential arising when a large share of the population is of working age Correct answer.

Explanation

A demographic dividend occurs when falling fertility reduces the youth dependency ratio, leaving a large working-age population relative to dependents. If jobs and skills are available, this can raise savings and output per capita.

Question 48Development theories and strategies

What does 'brain drain' refer to in the context of development?

  1. The closure of rural schools
  2. The loss of skilled professionals who emigrate to higher-income countries Correct answer.
  3. The decline of agricultural productivity due to drought
  4. A reduction in foreign direct investment inflows

Explanation

Brain drain describes the emigration of highly trained people such as doctors and engineers, which reduces the stock of skills available domestically. It can weaken public services and growth in the countries that invested in training them.

Question 49Development theories and strategies

Which of the following is an example of a market-based development strategy?

  1. Setting fixed quotas for every factory
  2. Central planning of all output targets
  3. Removing price controls to let supply and demand allocate goods Correct answer.
  4. Nationalising all private banks

Explanation

Market-based strategies rely on prices to signal scarcity and allocate resources, so removing price controls is consistent with them. They contrast with command approaches that set output targets and quotas centrally.

Question 50Development theories and strategies

Amartya Sen's capability approach focuses on which of the following?

  1. The size of the public sector
  2. The total value of goods and services produced
  3. People's freedom to achieve the lives they have reason to value Correct answer.
  4. The balance of payments position of a country

Explanation

Sen argues that development should be judged by the real freedoms people have to do and be what they value, rather than by income alone. Capabilities such as health, education, and participation are therefore central to the approach.