4.3.1 Measures of development Quiz: Pearson Edexcel Economics A, Unit 4

The 20 questions

1. What are the three dimensions of the Human Development Index (HDI)?

   • Health (life expectancy), education (schooling) and living standards (income per head)
   • Economic growth, inflation and unemployment, which are the three main macroeconomic indicators for each country
   • Population, land area and natural resources, which determine a country's capacity to support its citizens
   • Exports, imports and the current account, which together show the extent of a country's trade with the world

2. A country's life expectancy is 75 years. Using a minimum of 20 and a maximum of 85, what is the life expectancy index?

   • 0.846, since (75 - 20) / (85 - 20) = 55 / 65
   • 0.875, since (85 - 75) / (85 - 65) gives the index on the scale used for life expectancy
   • 0.200, since the minimum of 20 divided by the life expectancy of 75 gives the index
   • 0.750, since 75 divided by 100 gives the life expectancy index on a 0 to 100 scale

3. The three dimension indices are 0.8, 0.9 and 0.7. What is the HDI, calculated as their geometric mean?

   • About 0.800, since the arithmetic mean of 0.8, 0.9 and 0.7 is 0.8 and the HDI is an average of the three
   • About 0.900, since the HDI is set equal to the highest of the three dimension indices in the country
   • About 0.796, since the cube root of 0.8 x 0.9 x 0.7 is about 0.796
   • About 0.504, since the HDI is the product of the three indices with no root taken

4. Why is the HDI calculated as a geometric mean rather than an arithmetic mean?

   • A geometric mean always gives a higher result than an arithmetic mean, which makes the HDI more favourable to developing countries
   • A low value in one dimension pulls the overall index down more, so a country cannot offset poor health with high income
   • A geometric mean removes the need for any data on health or education, which are measured separately from the index
   • A geometric mean ensures that every dimension index is always exactly equal to the others in the final calculation

5. Which is an advantage of using the HDI to compare levels of development?

   • It combines health, education and income, giving a broader picture of wellbeing than income per head alone
   • It shows exactly how many people in each country are in poverty, using a single absolute threshold for all
   • It measures the entire wealth of each country, including all the natural resources and property in its territory
   • It is calculated from exchange rates only, which means it is unaffected by price differences between countries

6. Which is a limitation of the HDI when comparing countries over time?

   • It is based only on the number of students enrolled in schools, so it ignores health and living standards
   • It does not capture inequality within countries, so a rising average can hide widening gaps between groups
   • It is recalculated for every country each year using a single fixed set of data that never changes over time
   • It counts all income as equally distributed, so it cannot show any change in income between years for any country

7. Which of the following is an example of an 'other indicator' of development?

   • The number of cars sold per year, which indicates the level of consumer spending in the domestic economy
   • The current account balance, which measures the difference between a country's exports and imports of goods
   • The rate of growth of the stock market index, which measures the value of shares listed on the exchange each year
   • Infant mortality rate, which shows the number of deaths of children under one year per 1,000 live births

8. Which indicator would best show how unequally income is shared within a country?

   • The number of hospital beds per head, which reflects the amount of public spending on health services
   • Life expectancy at birth, because longer life expectancy always reflects a more equal distribution of income
   • The HDI, since it is calculated from the average income of the entire population in each country
   • The Gini coefficient, which summarises the distribution of income on a scale from 0 to 1

9. A country has a high HDI but a Gini coefficient of 0.5. Which conclusion is most accurate?

   • Average human development is high, yet income may be very unequally shared, so the HDI alone understates inequality
   • Income is shared equally, since a Gini coefficient of 0.5 indicates perfect equality in the distribution of income
   • Average human development must be low, since a Gini coefficient above zero always implies low life expectancy
   • The HDI is wrong and should be recalculated, because a high HDI cannot exist when the Gini coefficient is above 0.3

10. Which indicator is a measure of gender inequality used alongside the HDI?

    • The national debt as a share of GDP, which shows the burden of public borrowing for each gender group
    • The current account balance, which records the net flow of goods and services between men and women workers
    • The average height of workers, which is used to compare physical productivity across the genders in the economy
    • The Gender Inequality Index, which covers reproductive health, empowerment and labour market participation

11. What is a limitation of using GDP per head as a measure of development?

    • It ignores the distribution of income and the non-market activity that improves living standards, such as unpaid care
    • It captures health and education perfectly, because the value of education and health services is included in GDP
    • It shows the level of poverty directly, since it counts every household whose income is below the average level
    • It is always measured in the same currency across all countries, which means that it is directly comparable everywhere

12. Which statement about using life expectancy as a development indicator is most accurate?

    • It reflects health outcomes but can be affected by factors such as disease and conflict, so it is one part of development
    • It always rises with economic growth, so it can be used as a full measure of development on its own
    • It is unaffected by health services or living conditions, since it depends only on the genetic makeup of the population
    • It measures income per head directly, so it shows the same information as GDP per capita for every country

13. A country's HDI is 0.65. Which change would most likely raise its HDI the most?

    • A rise in its total population, with no change in the average years of schooling or life expectancy
    • A fall in the number of hospital beds per head, which reduces spending on public services in the country
    • A rise in the education index from 0.5 to 0.8, with the other indices unchanged
    • A rise in its GDP per head in dollars at market exchange rates, with no change in education or health

14. Which of the following is a reason why the HDI may not reflect the quality of education?

    • It uses the number of years of schooling, which does not measure what pupils learn or the quality of teaching
    • It measures the quality of education exactly, because it uses the scores from international tests in every country
    • It excludes education entirely, because the HDI only includes health and environmental indicators in its calculation
    • It records education quality through the national curriculum only, which is the same in every country

15. Which of the following statements about the HDI is most accurate?

    • It is a composite index, so it can be useful for comparison but loses detail about the components that make it up
    • It is a measure of the national debt, so it reflects the level of government borrowing relative to income
    • It is a single measure of national income, so it is equivalent to GDP per head in every country and every year
    • It is an exact measure of happiness, so it captures the subjective wellbeing of all citizens in a country

16. Which indicators are used to measure the education dimension of the HDI?

    • Mean years of schooling and expected years of schooling
    • Number of cars registered per 1,000 people and the number of miles of motorway in the country
    • Exports of goods per head and the share of imports in total spending by households each year
    • Average hours of sunshine per year and the average rainfall recorded in the capital city

17. A country's life expectancy is 70 years. With a minimum of 20 and a maximum of 85, what is the life expectancy index?

    • 0.588, since (70 - 20) / (85 - 20 + 15) gives the index after adjusting for the range
    • 0.850, since (85 - 70) / (85 - 67) gives the index for the country's life expectancy
    • 0.714, since 50 divided by 70 gives the life expectancy index on the scale used
    • 0.769, since (70 - 20) / (85 - 20) = 50 / 65

18. Three dimension indices are 0.9, 0.5 and 0.6. What is the HDI as the geometric mean?

    • About 0.646, since the cube root of 0.9 x 0.5 x 0.6 (0.27) is about 0.646
    • About 0.270, since the HDI is the product of the three indices with no root taken at the end
    • About 0.667, since the HDI is the arithmetic mean of 0.9, 0.5 and 0.6 for the three dimensions
    • About 0.900, since the HDI is equal to the highest of the three dimension indices in the country

19. Why might comparing HDI values over time be misleading?

    • The HDI only measures the population of a country, so changes in population always explain all HDI changes
    • The HDI never changes over time, because it is calculated from a fixed set of values set in the first year
    • The HDI is always recalculated using income alone, which makes earlier and later values incomparable in the data
    • Changes in methodology and data revisions can distort trends, so changes must be interpreted with care

20. Which indicator best shows access to basic services for households?

    • The number of cinemas per 100,000 people, which measures the cultural provision of each country
    • The percentage of the population with access to safe drinking water
    • The ratio of private car ownership to population, which measures the level of household wealth each year
    • The volume of international air passengers, which measures the country's connection to global tourism

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