Midterm 1 Ch 1-8

Question 1

Agro-export-led Growth

Answer 1

Development strategy according to which the necessary imports for the process of industrialization are financed by exports of agricultural commodities. In some cases the country will have a comparative advantage in the specific crop.

Question 2

Dutch Disease

Answer 2

A sudden influx of foreign currency.

Question 3

Economic Development

Answer 3

The process of creating wealth through the mobilization of human, financial, capital, physical, and natural resources to generate marketable goods and services.

Question 4

Economic Growth

Answer 4

Sustained increases in the real GDP of an economy over a long period of time.

Question 5

Economic Rent

Answer 5

Difference between the market price of a good/production factor and its opportunity cost. It is also known as price needed to produce a good or keep the factor of production in its current use.

Question 6

Gross Domestic Product

Answer 6

Total market value of final goods and services produced within an economy in a given year.

Question 7

Growth led by agricultural development

Answer 7

Strategy aiming at minimizing any conflict between growth and equity in development which has not actually been adopted in the Middle East.

Question 8

Growth led by manufactured exports

Answer 8

Strategy which achieves foreign exchange without sacrificing the goal of industrialization as well as the reduction of production costs.

Question 9

Import-Subsidizing Industrialization

Answer 9

Development strategy according to which economies traditionally dependent on the export of primary commodities and raw materials moved to producing goods that were previously imported and processing domestic raw materials.

Question 10

LDC

Answer 10

Less developed countries, that is countries of low and middle income.

Question 11

MENA

Answer 11

Middle East and North Africa.

Question 12

Mineral-export-led Growth

Answer 12

Strategy aiming to acquire revenues from mineral exports in order to create an industrial base for sustained development after the natural resource is exhausted.

Question 13

Monetary Dutch Disease

Answer 13

Stimulation of a rate of inflation that is higher than the one of the major Western trading partners of the exporting country due to the spending of the oil revenues.

Question 14

Purchasing Power Parity (PPP)

Answer 14

Rate such that a representative basket of goods in country A costs the same as in country B if the currencies are exchanged at that rate.

Question 15

Real Economy Dutch Disease

Answer 15

An increase in the demand for both tradable and non-tradable goods due to an increase in the spending of government revenues.

Question 16

Social Actors

Answer 16

All interests, groups and classes that interact with the state, seek to shape its policies and are affected by the state’s growth strategies.

Question 17

Standard of Living

Answer 17

The level of material comfort as measured by the goods, services, and luxuries available to an individual, group or nation.

Question 18

State Structure

Answer 18

The organization of the monopoly of coercive means within society, the interventions into the economy that such a monopoly makes possible and the institutions through which intervention is carried out.

Question 19

Structural Transformation

Answer 19

Process of unbalanced sectoral growth.

Question 20

Urban Biased

Answer 20

Concentration on urban growth that may promote growth in certain sectors (durable consumer goods).

Question 21

Agro-Poor

Answer 21

Poorest countries for which a growth strategy led by agricultural development seems the only solution.

Question 22

Backstop Technology

Answer 22

Cost of production of the closest available substitute.

Question 23

Coupon Clippers

Answer 23

Countries almost entirely dependent on oil and any income earned from overseas investments.

Question 24

Debt Overhang

Answer 24

Refers to any country with a debt/exports ratio greater than 200% which deters private investors from risking their capital.

Question 25

Derived Demand for Oil

Answer 25

Need for oil not for our own sake, but because we need to heat homes or move around.

Question 26

External Cartel Problem

Answer 26

When prices are high, consumers and producers have incentives to change their behavior.

Question 27

Internal Cartel Problem

Answer 27

Cartel members have an incentive to cheat on production quotas.

Question 28

Minimum Price

Answer 28

Lowest price at which a good will be supplied and is determined by the cost of production.

Question 29

Newly Industrializing Countries (NICs)

Answer 29

Countries with relatively large populations, good agricultural land, long experience with industrial production and not enough oil.

Question 30

Oil Industrializers

Answer 30

Countries with substantial oil exports and revenues as well as large population.

Question 31

Peak Oil Debate

Answer 31

Opposing views about whether the world oil production will reach its maximum.

Question 32

Price Ceiling

Answer 32

Price that cannot exceed a predetermined level. It is also related to the “backstop technology”.

Question 33

Pro-rationing System

Answer 33

Unintended outcome of the system to protect domestic producers.

Question 34

Proved Reserves

Answer 34

Reserves that can be recovered using the existing technology and prices.

Question 35

Stagflation

Answer 35

Recession combined with inflation.

Question 36

Supply Side

Answer 36

Relates to countries’ attempts to get a higher percentage of the oil rents (cash) and the contest for control between nation states and oil companies (control).

Question 37

Watchmakers

Answer 37

Countries with limited natural resources which focus on investing in human capital.

Question 38

Children as Pension Funds

Answer 38

Parents’ expectation that their children will support them financially and take care of them when they will be in old age.

Question 39

Demographic Dividend

Answer 39

The rise in the rate of economic growth due to a rising share of working age people in a population, which exhibits a relation with the level of the savings rate.

Question 40

Demographic Momentum

Answer 40

Continued population increase despite reduced reproductive rates which ensures large total additions to the labor force.

Question 41

Demographic Transition

Answer 41

This transition refers to the fact that despite the decline in the population growth due to declines in fertility, populations will still continue to expand.

Question 42

Dependency Ratio

Answer 42

The number of people under fifteen and over sixty five years old, divided by the working age population.

Question 43

Enrollment Ratio

Answer 43

The number of students enrolled in primary, secondary and tertiary levels of education, regardless of age, as a percentage of the population of official school age for the three levels.

Question 44

Fertility Rate

Answer 44

Refers to the number of children the average woman will have during her lifetime.

Question 45

Homogeneous Nation-State

Answer 45

Every citizen is equal to the others.

Question 46

Infant Mortality

Answer 46

The number of deaths of infants under one year of age per 1,000 live births in a given population.

Question 47

Opportunity Cost of Children

Answer 47

Having more children implies that the parents have less leisure time holding all the others constant. Also, the more the children, the higher the amount they have to spend on each children.

Question 48

Population Pyramid

Answer 48

Graphical representation of a nation’s population at the time of the census which shows its composition, by age and sex.

Question 49

Replacement Rate

Answer 49

The degree to which a population is replacing itself, based on the ratio of the number of female newborns to the number of women of childbearing age. It is also known as the gross reproduction rate.

Question 50

The "would-be middle class"

Answer 50

Educated Middle Easterners who moved into white-collar professions and the educated Middle Easterners who aspired to move to such jobs, but they didn’t manage to.

Question 51

Discouraged Worker

Answer 51

An individual who used to be unemployed, but because of his failure to find a job, he has given up looking for one. Formally, it is a worker who is not actively seeking for employment.

Question 52

Growth Monitoring

Answer 52

Use of weight-for-age and weight-for-height charts in infant and early child care to identify children who are malnourished, and thus, susceptible to disease.

Question 53

Labor Market Dualism

Answer 53

In the informal sector there are efficient markets determined by the supply and demand, but with poorer, less educated workers. On the other hand, government employees work in administered labor markets where the wages are not based on the laws of demand and supply.

Question 54

Life Expectancy at Birth

Answer 54

How long, on average, a newly born child is expected to live. It summarizes health, nutritional and other welfare factors into an easily understood number.

Question 55

Literacy Rate

Answer 55

The proportion of the population over age fifteen that can read and write.

Question 56

On-the-job Training

Answer 56

The instruction of the employee at the work place in order to gain new work specific-skills.

Question 57

Oral Rehydration Therapy

Answer 57

Mixture of sugar, salt and water that enables the body to retain the fluids whose loss is the cause of death in fatal cases of diarrhea.

Question 58

Private Formal Sector

Answer 58

The group of firms for which there is a minimum of ten to fifty workers per firm, their workers have some job security and they usually receive higher wages than the ones in the public sector.

Question 59

Private Informal Sector

Answer 59

Self employed workers along with those working in firms with fewer than ten workers per firm. It is also known as the “slum dwellers” or “poor people”.

Question 60

“Proximate” causes of death

Answer 60

What diseases cause the death of children

Question 61

Screening

Answer 61

A process which allows the employer to determine the applicant's unobserved ability by examining the earned academic degrees.

Question 62

“Serve the Revolution”

Answer 62

Slogan in many countries which calls the universities to contribute to the development of the nation. Its implicit content is that the universities should remain subservient to regime goals.

Question 63

Social Mobility

Answer 63

The process by which people move between different social layers such as social classes or economic groups.

Question 64

“Underlying” causes of death

Answer 64

Why children contract specific diseases and/or why they are not cured.

Question 65

Vocational Training

Answer 65

Training designed to advance individuals' general proficiency, especially in relation to their present or future occupations. It should not be confused with the on-the-job-training.

Question 66

Wage Flexibility

Answer 66

The ability of changes in real wages to eliminate imbalances between the supply of and demand for labor.

Question 67

Autogestion

Answer 67

Self management.

Question 68

Bimodalism

Answer 68

A land-tenure system that combines a small number of owners holding very large estates with a large number of owners holding very small farms.

Question 69

Demand for Water

Answer 69

The rest of water use which is not characterized as a need.

Question 70

Elasticity

Answer 70

The percentage change in quantity demanded measured against the percentage change in price.

Question 71

Embargo

Answer 71

Any sort of restriction on foreign trade; the restriction of exports destined for sale in another country. Unlike tariffs, import quotas, and other nontariff barriers that protect domestic producers from competition, embargoes are intended to punish the export destination country.

Question 72

Externality

Answer 72

A cost or benefit that is not included in the market price of a good because it's not included in the supply price or the demand price. Pollution is an example of an externality cost if producers aren't the ones who suffer from pollution damages.

Question 73

Farm Lobby

Answer 73

Urban entrepreneurs who have entered the production of horticultural crops, poultry and livestock.

Question 74

Food Emergency

Answer 74

The ultimate in food insecurity, also known as famine or humanitarian emergency.

Question 75

Food Gap

Answer 75

Escalating demand and constrained supply response have rendered Middle East the least food self-sufficient area in the world.

Question 76

Food Security

Answer 76

Guarantee that consumers are reasonably certain of being able to eat properly.

Question 77

Indirect Colonial Rule

Answer 77

The best agricultural land is held by the foreign conquerors for themselves. Relegating the indigenous population to marginal areas for subsistence farming.

Question 78

Irrigation Efficiency

Answer 78

Ensures that food production will not decline with a reduced water use.

Question 79

Macroeconomic Taxation

Answer 79

A form of compulsory surcharge on one or more types of private trade or other voluntary transactions. Is also known as “indirect taxation” including general sales taxes, import tariffs, marriage licenses, and so on.

Question 80

Merit Good

Answer 80

A basic good to which everyone is entitled.

Question 81

Sectoral Taxation

Answer 81

Price policy in which government marketing agencies enjoying monopsony power offer farmers prices well below the ones prevailing on the world markets.

Question 82

Self-sufficiency Ratio

Answer 82

Percentage of total food consumption that is locally produced.

Question 83

Shadow Price of Water

Answer 83

The amount by which one additional unit of water will increase one’s utility.

Question 84

Virtual Water

Answer 84

Water contained in food.

Question 85

Water-Stressed

Answer 85

A country which has less than 1000 cubic meters of available water supplies per person and per year.

Question 86

Backwardness

Answer 86

A condition under which there is production of cheap agricultural goods, unskilled workforce and only a few privileged ones are allowed to get educated and acquire modern skills.

Question 87

Economic Stagnation

Answer 87

A prolonged period of slow economic growth.

Question 88

Economies of Scale

Answer 88

The decrease in unit cost of a product or service resulting from large-scale operations, as in mass production.

Question 89

Five Year Plans

Answer 89

Blueprints for ISI putting emphasis on local processing of Turkey’s primary commodities and minerals and later on promoting heavy industrial growth.

Question 90

Interventionism

Answer 90

An action taken by a government in a market economy or market-oriented mixed economy, beyond the basic regulations in an effort to affect its own economy.

Question 91

Liberal Monarchies

Answer 91

Countries which professed liberal economic credos where the private sector was the leading force.

Question 92

Populism

Answer 92

Masses are the object of political and economic policies as well as distributive issues are at the top of the policy agenda.

Question 93

Socialist Transformation

Answer 93

Process of accumulation according to which the state captures the surplus of its own activities and has as its goal to dominate all aspects of resource allocation. Also known as “non-capitalist path”.

Question 94

State Bourgeoisie

Answer 94

A dominant social group which controls but does not own the major means of production.

Question 95

State Capitalism

Answer 95

An economic system, in which much of the capital is controlled by the state. Sometimes it is used equivalently to “state socialism”.

Question 96

X-inefficiency

Answer 96

When an enterprise’s total costs are not minimized

Question 97

Capital-Surplus oil exporters

Answer 97

Domestic Saving is higher than domestic investment in oil producing countries when oil price is high.

Question 98

Resource GAP

Answer 98

When investment and debt repayment is higher than domestic saving.

Question 99

Twin GAPs

Answer 99

When there are gaps between domestic savings and investment and between exports and imports

Question 100

Balance of Payment

Answer 100

a record of the flow of economic transactions between the residents of one country and the rest of the world

Question 101

World Bank

Answer 101

an international organization that provides loans to developing countries aimed toward poverty reduction and economic development

Question 102

International Monetary Fund (IMF)

Answer 102

an international organization that provides loans to developing countries aimed toward poverty reduction and economic development

Question 103

Economic Austerity

Answer 103

It refers to the measures taken by governments to reduce expenditures 

Question 104

Q1: What is NOT one of the things urgently needed for MENA countries to prosper in the 21st century? a. A stronger focus on pro-poor growth b. A preference of state over markets c. Economic diversification A stronger role of the private sector

Answer 104

b. A preference of state over markets

Question 105

Q2: What is the single most important driver of food security? a. Food imports b. Food production per capita c. Economic growth that raises incomes d. Any economic growth

Answer 105

c. Economic growth that raises incomes

Question 106

Q3: In MENA countries, the Dutch disease effect hampered the competitiveness of non-mineral export sectors by... a. Appreciating the exchange rate and inflating the cost of domestic factors b. Depreciating the exchange rate and inflating the cost of domestic factors c. Appreciating the exchange rate and deflating the cost of domestic factors d. Depreciating the exchange rate and deflating the cost of domestic factors

Answer 106

a. Appreciating the exchange rate and inflating the cost of domestic factors

Question 107

Q1: Which is NOT a domestic factor in defining a rentier state? a. Export sales of minerals and metals b. Tourism expenditures c. Speculation in real estate or financial instruments d. Manufacturing industry

Answer 107

d. Manufacturing industry

Question 108

Q2: Because the culture of rent generates a culture of easy life, consumerism and self-centeredness.... a. Arab economies import more, because it requires little effort b. Arab economies export more, because it requires little effort c. There is an increased and successful effort in developing an agricultural sector d. Innovation and risk taking are encouraged

Answer 108

a. Arab economies import more, because it requires little effort

Question 109

Q3: What is feature of an Arab rentier economy? a. The private sector is dependent upon government spending to exist and prosper b. Very little foreign debt in relation to GDP c. Low levels of public and private debt d. Most government revenue comes from taxes

Answer 109

a. The private sector is dependent upon government spending to exist and prosper