20. According to the theory of structural patterns of development, which of the following tends to occur as a country develops? (a) a shift from agriculture to industry and services (b) an increase in the percentage of income spent on food (c) growth of the rural sector (d) a decline in trade as a share of GNP Answer:A
21. In the public choice (or new political economy) approach to development the emphasis is on
B 22. A situation in which government intervention in the economy worsens the economic outcome is termed
23. The underlying assumption of the Harrod-Domar growth model is that
24. The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as (a) the marginal product of labor is less than the average product of labor in agriculture. (b) the marginal product of labor in agriculture is less than the marginal product of labor in industry. (c) there are diminishing returns to labor in agriculture. (d) the marginal product of labor in agriculture is zero. Answer:D
25. International dependence theories distinguish between two groups of countries known as
C 26. Which of the following is an assumption of the Lewis two-sector model?