Fall 2017 Final

Economics 280 Final Exam Fall 2017
Please use a Blue Book.
Answer FOUR questions in total.

Think before your answer: outline first, write second. Questions are weighted equally. Use jargon and employ our formal models. Incorporating concrete examples is good practice on an economics exam.

Answer TWO of the following.

  1. “Demography is destiny.” Any country that does not successfully address demographic issues will remain poor, while those that foster demographic change will launch a virtuous circle of growth that will lead to higher incomes.
  2. Small developing countries, of which there are many, face different policy constraints than large countries such as Brazil, India, South Africa and China.
    • would “big push” industrialization work equally well?
    • do they face the same challenge of maintaining macroeconomic stability?
    • would the presence of natural resources have the same impact – a curse all around?
  3. The disease burden in tropical regions is high, for plants, animals and people. As a result, much of the world is doomed to remain forever poor. True? If not, what needs to be done?

Answer TWO of the following.

  1. Claim: Developing countries are poor because workers lack capital. Modern technology will enable this to be overcome in short order, allowing banks to channel funds from global markets to enable poor farmers and petty traders transition to higher incomes.
  2. Claim: Developing countries are poor because they lack human capital. A better educational system will enable this barrier to be overcome, enabling poor farmers and petty traders to transition to higher incomes.
  3. Claim: Developing countries are poor because they lack technology, first and foremost the modern management techniques that are central to a productive economy. Educating people in business methods (from basic bookkeeping to modern strategic planning) is thus the single most important policy to jump-start the transition to higher incomes.