Virginia Tech ECON 92237 Quiz 3 1)The Solow model predicts that poorer countries will have higher growth rates

Virginia Tech

ECON 92237

Quiz 3

1)The Solow model predicts that poorer countries will have higher growth rates.

a.            True

b.            False

2.            Easterly writes that “education is worth little more than hula hoops to a society that wants to grow.” Why does he say that?

a.            Talking about “education” without talking about what form it takes, and what incentives actors face is meaningless

b.            Even if individuals in least developed countries invested in value- added education, poverty traps would prevent these countries from growing

c.             Education is all about signaling

3.            In the conclusion to the chapter, Easterly uses the example of a large shoe factory built in Tanzania with financing from the World Bank. The factory produced very few shoes and closed. Easterly argues that the project failed due to      .

a.            Incentives

b.            Comparative advantage

c.             Transactions costs

d.            World Bank economists don’t care about Tanzania