Economic Development: five questions to try now
Real past-paper questions, the answer key from the mark scheme, and the explanation that goes with it. No account needed to answer them.
Question 1
It is often argued that the UN Human Development Index (HDI) is a better indicator of economic development than income per capita because it adjusts for
Answer: D.
The correct answer is D: life expectancy at birth.
The HDI combines three dimensions, income (GNI per capita), education (years of schooling) and health (life expectancy at birth). Life expectancy is the component that income per capita cannot capture at all: two countries with identical average incomes can differ greatly in how long their citizens live, depending on healthcare, sanitation and nutrition. Adding a health dimension is a large part of why the HDI is treated as a broader measure of development than income alone.
Why the other options are wrong:
The HDI combines three dimensions, income (GNI per capita), education (years of schooling) and health (life expectancy at birth). Life expectancy is the component that income per capita cannot capture at all: two countries with identical average incomes can differ greatly in how long their citizens live, depending on healthcare, sanitation and nutrition. Adding a health dimension is a large part of why the HDI is treated as a broader measure of development than income alone.
Why the other options are wrong:
- A, average hours worked, is not in the HDI. It would be relevant to welfare, the same income earned in fewer hours implies a better standard of living, but the index does not include it.
- B, environmental pollution, is not in the HDI either. This is a recognised limitation of the index, and it is why separate measures such as the Measure of Economic Welfare exist.
- C, income inequality, is the strongest distractor. The standard HDI uses average income and average outcomes, so it says nothing about distribution. There is a separate Inequality-adjusted HDI that does make this correction, but it is a different index, the plain HDI does not adjust for inequality.
Question 2
The United Nations gives aid to a developing country so it can purchase vaccinations manufactured in India.
How is this aid characterised?
Answer: C.
The correct answer is C: multilateral and tied.
Two classifications are being tested at once. Aid is multilateral when it is channelled through an international organisation to which many countries contribute, rather than passing directly from one government to another; the United Nations is such an organisation, so this is multilateral aid. Aid is tied when a condition restricts how the funds may be spent. Here the money must be used to buy vaccinations manufactured in India, so the recipient cannot seek a cheaper or more suitable supplier elsewhere, a spending restriction, and therefore tied.
Why the other options are wrong:
Two classifications are being tested at once. Aid is multilateral when it is channelled through an international organisation to which many countries contribute, rather than passing directly from one government to another; the United Nations is such an organisation, so this is multilateral aid. Aid is tied when a condition restricts how the funds may be spent. Here the money must be used to buy vaccinations manufactured in India, so the recipient cannot seek a cheaper or more suitable supplier elsewhere, a spending restriction, and therefore tied.
Why the other options are wrong:
- A and B call the aid bilateral. Bilateral aid flows directly from a single donor government to a recipient government. The UN is a multi-country body, so this is not bilateral, and note that the specified supplier being in India does not make it a deal between two governments.
- B and D call the aid untied. Untied aid may be spent wherever the recipient chooses; the requirement to purchase from a named source is precisely what tying means.
Question 3
Which variable is included in the calculation of both the Human Development Index (HDI) and the Multidimensional Poverty Index (MPI)?
Answer: D.
The correct answer is D: years of schooling.
Education appears in both indices. In the HDI it is one of the three dimensions, measured by mean years of schooling for adults and expected years for children. In the Multidimensional Poverty Index it forms the education dimension, captured by whether any household member has completed a minimum number of years of schooling and whether school-age children attend school. The indicator is operationalised slightly differently in each, but years of schooling is the shared variable.
Why the other options are wrong:
Education appears in both indices. In the HDI it is one of the three dimensions, measured by mean years of schooling for adults and expected years for children. In the Multidimensional Poverty Index it forms the education dimension, captured by whether any household member has completed a minimum number of years of schooling and whether school-age children attend school. The indicator is operationalised slightly differently in each, but years of schooling is the shared variable.
Why the other options are wrong:
- A, child mortality, is an MPI health indicator only. The HDI measures health through life expectancy instead.
- B, GNI per capita, is the HDI's income dimension only. The MPI deliberately avoids an income measure, its whole purpose is to identify deprivation through direct indicators of living conditions such as sanitation, cooking fuel, electricity and housing, rather than through income.
- C, life expectancy at birth, is an HDI component only. The MPI treats health through child mortality and nutrition.
Question 4
Some conditions for providing foreign aid to low-income countries can be restrictive.
Which kind of aid fits this description?
Answer: B.
The correct answer is B: grants that are tied to purchasing donor country goods.
Tied aid comes with a condition on how the money may be spent: the recipient must buy goods or services from firms in the donor country. That restriction reduces the value of the aid, because the recipient cannot shop for the cheapest or most suitable supplier and may end up paying above the world price. Part of the benefit therefore flows back to producers in the donor economy, which is why tied aid is criticised as serving the donor's commercial interests as much as the recipient's development.
Why the other options are wrong:
Tied aid comes with a condition on how the money may be spent: the recipient must buy goods or services from firms in the donor country. That restriction reduces the value of the aid, because the recipient cannot shop for the cheapest or most suitable supplier and may end up paying above the world price. Part of the benefit therefore flows back to producers in the donor economy, which is why tied aid is criticised as serving the donor's commercial interests as much as the recipient's development.
Why the other options are wrong:
- A, emergency food aid after a drought, is given for immediate humanitarian relief and does not restrict the recipient's purchasing decisions.
- C, concessional loans repaid over a long period at low interest, are generous rather than restrictive, the soft terms are the point. A repayment obligation is a cost, but it is not a restriction on how the funds are used.
- D, technical assistance through skilled worker transfers, delivers expertise the recipient lacks. It builds capacity rather than constraining choice.
Question 5
Which measurement is not included in the calculation of the Human Development Index?
Answer: C.
The correct answer is C: infant mortality rate.
The HDI has exactly three components: Gross National Income per capita for the standard of living, mean and expected years of schooling for education, and life expectancy at birth for health. The infant mortality rate is not one of them. It is a widely used development indicator in its own right, and it appears in other composite measures such as the Multidimensional Poverty Index, but the HDI captures health through life expectancy alone.
Why the other options are included:
The HDI has exactly three components: Gross National Income per capita for the standard of living, mean and expected years of schooling for education, and life expectancy at birth for health. The infant mortality rate is not one of them. It is a widely used development indicator in its own right, and it appears in other composite measures such as the Multidimensional Poverty Index, but the HDI captures health through life expectancy alone.
Why the other options are included:
- A, average years of schooling, is part of the education dimension.
- B, GNI per capita, is the income dimension, measured at purchasing power parity so that living costs are comparable across countries.
- D, life expectancy at birth, is the health dimension.
What this practice covers
These questions are drawn from past CIE 9708 papers and filtered to economic development. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
What examiners see students get wrong here
These are the errors that cost marks on economic development, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Treating growth and development as synonyms.
- Comparing GDP per head across countries without PPP adjustment.
- Forgetting to adjust for population growth.
- Saying the HDI accounts for inequality, which the standard HDI does not.
- Forgetting that HDI income is logged, and why.
- Confusing GDP with GNI, particularly in questions about foreign investment.
- Listing indicators without saying what each one misses.
- Ignoring the informal economy when discussing low income countries.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Economic Development revision notes.