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VAAL TRIANGLE CAMPUS
e' """''""'"""" The South African Multi-dimensional Poverty Index measures multi-dimensional poverty
by compiling an index consisting of the following focus areas:
Benodigdhede vir hierdie vraestei/Requirements for this paper:
-Health, as represented by child mortality.
Multikeusekaarte/ Nle-programmeerbare Oopboek·eksamen/ - Education, as represented by years of schooling and school attendance.
Multi-choice cards: sakrekenaar/ Open book
0 - Standard of living, as represented by people's access to water, sanitation, proper
Non-programmable calculator: examination?
dwellings and safe sources of heat and cooking.
B G § ·Economic activity, as represented by the unemployment rate for adults in the country.
Grafiekpapier/ Draagbare Rekenaar/
Graph paper: Laptop: The diagram below illustrates the percentage each of these components contributed to
D D multidimensional poverty in South Africa in 2011. Study the diagram and then answer
the question that follows.
EXAMINATION: First opportunity QUALIFICATION BCom, BA, BSc
PROGRAM:

MODULE CODE: ECON 322 DURATION: 3 ure/hours

MODULE Development Economics MAX MARKS: 100
DESCRIPTION: Scheel
EXAMINER(S): Miss C. Oaassen DATE: 18/11/2015

Miss. H Maruping Unemplcyment 2r*

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Dr D. Meyer
MODERATOR: Prof C Ogbokor and Mr C TIME: 14:00 (building 12
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INSTRUCTIONS- READ CAREFULLY
This paper consists of 3 sections, for a total of 100 marks.
Complete the integrated case study in Section A for a total of 30 marks.
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Complete the multiple choice questions and A and B column in Section B for a further 40 marks.
Make use of the multiple choice cards and matrix that are provided.
Complete the case study in Section C for 30 marks. -~~
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Number your questions clearly.

QUESTION: (30 MARKS)

Using the information in the diagram above, develop a poverty reduction strategy for
South Africa by following the strategic planning process.

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QUESTION 6
The Gini coefficient provides a measure of
1 the level of poverty.
2 the level of relative inequality.
MULTIPLE CHOICE QUESTIONS [20) 3 disguised unemployment.
QUESTION 1 4 the rate of growth.
Which of the following is not an important objective of development?
1 increases in per capita income. QUESTION 7
2 the expansion of available choices.
3 increases in individual and national self-esteem. According to Kuznets, the process of development inequality in an economy will normally
4 all of the above are important objectives of development. 1 first rise and then fall.
2 first fall and then rise.
3 remain about the same.
QUESTION 2
4 show no definite pattern.
Development economics is the study of the
1 alleviation of absolute poverty. QUESTION 8
2 transformation of institutions. The concentration of resources on higher rather than basic education in developing countries
3 allocation of resources in developing countries. tends to lead to
4 all of the above. 1 greater inequality.
2 lower fertility.
QUESTION 3 3 less international migration.
4 more job creation.
Conditions of today's developed countries at the start of their industrialization differ from
conditions in the developing world in that
QUESTION 9
1 population growth rates were higher.
2 more advanced technology was available. Studies show that improved education of women in developing countries leads to
3 there were more opportunities for development assistance. 1 lower infant mortality.
4 none of the above. 2 better designed, market based development policies.
3 lower international dependence.
4 all of the above.
QUESTION4
Which of the following are components of economic growth?
QUESTION 10
growth in labor force.
2 technological progress. Which of the following is an argument in favor of trade liberalization?
3 investment. 1 Increased investment.
4 all of the above. 2 Infant industry.
3 Fluctuating export earnings.
4 Increased government revenue.
QUESTION 5
The 0-ring theory places emphasis on
QUESTION 11
1 education of the labor force.
2 skill complementarities. One of the components oft he human development index is
3 purchases of machinery and equipment by firms. 1 the percentage ofthe population who are high school graduates.
4 none of the above. 2 the average daily intake of protein .
3 life expectancy at birth.
4 the number of doctors per hundred people in the population .
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QUESTION 12
Which of the following is not one of the policies or institutions advocated as part of the QUESTION 17
Washington Consensus?
The Lewis model
1 Tax reform.
Provides a theory of development in which surplus labour from the traditional agricultural
2 Nationalization.
sector is transferred to the modern industrial sector, which absorbs the labour, promotes
3 Financialliberalization. 1
industrialisation, and stimulates sustained development.
4 Trade liberalization.
Provides a decision tree framework for identifying a country's most binding constraints on
QUESTION 13 2 economic growth.
Which of the following reasons does not explain why increased exports are thought to increase a
Is an endogenous growth model in which technological spill overs are present, the economy
country's GDP?
wide capital stock positively affects output at the industry levels, so there may be increasing
1 Exporting firms have an incentive to learn and adopt best practice technologies. 3
returns to scale at the economy wide level.
2 An increase in demand for a country's exports constitutes an increase in aggregate demand.
3 Exporting firms face larger markets and can take advantage of economies of scale. Is an attempt to identify characteristic features of the internal process of structural
4 Exports provide the means of paying for imports of capital goods . 4 transformation that a typical developing economy undergoes as it generates and sustains
modern economic growth and development.
QUESTION 14
Developing countries stand to gain from international trade because QUESTION 18
1 Trade enables them to specialize in producing where they have a comparative advantage . It has been noted that high-poverty groups share certain characteristics. What are these
2 Trade gives them access to a greater variety of goods produced abroad. characteristics? Choose the correct combination from the options below.
Trade allows them to produce larger amounts than they could consume themselves, taking Women; ethnic minorities; low productivity.
3
advantage of increasing returns to scale. 2 Low human capital; rural areas; ethnic minorities.
4 All of the above. 3 Women; rural areas; ethnic minorities & indigenous populations.
4 Incomplete markets; low human capital; low levels of living.
QUESTION 15
Many countries that became independent after World War II found that the legacy of colonialism QUESTION 19
hindered their economic development. According to the textbook "Economic Development", the Which of the following is a reason to be concerned ~ith extreme income inequality?
list of hindrances included
1 Income inequality provides an incentive for people to work hard .
artificial political boundaries that covered diverse ethnic groups with little in common . 2 Income inequality leads to economic inefficiency.
inadequate access to higher education and training for nationals under the colonial 3 Income inequality promotes social stability.
2
administration. 4 Income inequality fosters economic growth.
control of domestic commerce by foreign minority groups which had been brought in by the
3
colonial power.
QUESTION 20
4 all of the above.
Human capital can best be described as:
QUESTION 16 the amount of wealth people have.
2 the amount of money people have to spend on schooling.
Each of the following is listed by the textbook "Economic Development" as one of the foundations
3 human capacities that raise productivity.
for a well-functioning market economy, except :
4 the average education level of the population .
1 stabilize macroeconomic conditions .
2 establish a stock market.
3 dismantle administrative controls.
4 let relative prices reflect scarcity values.
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MATCH COLUMN "A:' TO COLUMN "B" [20]
Below is a table with an A and a B column. Please link the concepts in column A with a
concept in column B in the table that "best fits". Use the matrix as provided to fill in
your answers. Please use a pencil or high lighter and fill the square as selected (do not The table below is a summary of the latest socio-economic data for the Emfuleni municipal area
compared to the Metsimaholo municipal area . The region is known as the Vaal-Triangle.
make a cross in the selected square). The matrix is available as an appendix to this
paper.
Table: Summary of key socio-economic indicators for the study region
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1- Economic development A- GOP growth depends on savings and Total population- 2014 731000 157 000
must lead to ........ investments. Population growth 1996 to 2014 per annum 1.0% 1.8%
2 - Harrod-Domar growth B - Minister E Patel Number of people in poverty (% of people living in 298 263 (41%) 57 804 (37%)
poverty)
model
Regional GOP (R 1 000 000) R 32 700 R 38 580
3 - Benefits of globalization C- A focused public policy led effort to initiate
Regional GOP growth 1996 to 2014 per annum 1.2% 4.9%
accelerated development
Regional GDP growth in 2014 -0.5% 2.2%
4- Neo-colonial dependency D- A fixed %taxation on imported products.
Number of unemployed people 2014 (unemployment 106 000 (36.4%) 21800 (31.0%)
model rate in brackets)
5 - Minister of Economic E - Growth, improved trade conditions, innovation. Number of employed people 2014 180 050 47700
Development Regional GOP per capita 2014 R 44 733 R 245 732
6- Minister of Small Business F- Minister L Zulu Average Household size 2014 3.14 3.11
Development HOI 2014 0.66 0.64
7- Specialization G- Concentration of resources and production Gini-coefficient 2014 0.60 0.60
factors in a few products and services. Population density (people per square km) 2014 756 91
8- Tariffs H -Specialization and division of labour. Household infrastructure index 2014 0.87 0.84
I - Promote domestic industr ies to limit imports of Composite crime index 2011 112.68 173.79
9- Quotas
Location quotient for manufacturing sector 2014 2.61 2.86
expensive products.
Annual average income per capita 2014 R 131628 R 158 119
10- Subsidy J - Models the impact of complementarities across
Number of households with no formal income 2014 17.7% 13.2%
firms and sectors.
Total exports 2014 (R 1 000 000) R6 591 R3 403
11- Big Push theory K- Underdevelopment due to unequal global
Total tourism trips to region 2014 480 625 182 385
capital system (rich versus poor) Dependency ratio 2014 43.80 44.30
12- 0-Ring Theory L- Improved and increased productivity Youth unemployment rate 2014 ----- - 45.0 41.6
13- Import substitution M - Payment by government to producers to Source: Meyer, (2015) and Global Insight (2014).
stimulate an industry and employment.
14- Export promotion N - Improve quality of life for all.
15 -Agglomeration economies 0- Cost advantages that occur to producers and 1. Analyse the socio-economic data in the table above and explain which area are currently "better-off"
consumers when located in major urban areas. in terms of the status quo. In addition, also identify the five (5) most pressing problematic issues in
16 - Examples of elements of P-An attempt by government to coordinate and each municipal area . Give clear headings in the layout of your answer (15 marks).
an advanced economy direct the national economic variables.
17- Specialization in labour Q- Balance between economic growth and
leads to .... environmental conservation 2. Both municipal areas need to improve their export and internal production structures to improve
18- Sustainability R- Focus on incentives for export to improve their balance of payments and eventually to accelerate economic development. You are appointed to
balance of payments and economic development. develop an export promotion and import substitution strategy for the two areas as a combined
19- Economic development S- Limitation of the quantity of any item to be
strategy. Note: Learn for best practice principles from the "Asia Tigers" such as Taiwan and South
planning exported to a country.
Korea and formulate the strategy. Your answer must be well laid-out with clear headings (15 marks).
20 - Strategic planning process T- Setting of goals, targets, projects,
implementation and monitor and control.
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STUDENT NO:
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