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26 Cards in this Set
- Front
- Back
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What happens to supply and demand curves in a price scissor during famine?
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the food supply line shifts up because less quantity and the supply line for assets shifts down because people selling assets to buy more expensive food.
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why is there less famines today?
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more awareness and early warning systems that trigger foreign aid.
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What can happen if foreign aid lasts too long?
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depresses local food prices which gives negative incentives for farmers not to produce.
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What is a good measurement for child health?
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height and weight for age
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What is the sex preference theory?
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If parents prefere boys and they have a girl they will breast feed less because it is a contraceptive and they want to try for a boy sooner
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What is the reason for the boy preference?
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Girls leave their parents to live with inlaws so dont take care of own family
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Why did world population explode in the 1950's?
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Mortality decreased before the fertility decreased and population momentum which is when there is more child bering age persons
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What is best way to look at population growth?
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total fertility rate, # of children a women will have compared to other women. less than 2.1 is a shrinking population.
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What is fecundity?
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# of children that a couple would have if not using birth control.
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Factors that affect the demand for children?
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Opportunity cost of time for women, child wages, and income.
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How does female education affect demand for children?
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more eduction means higher allocative efficiency, they know more about the use of contraceptives so demand decreases.
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How does child mortality affect the demand for children?
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as mortality decreases the demand decreases because of the child hoarding effect and child replacement effect.
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explain the matlab study in bangladesh.
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in treatment villages, family planning workers visited every 2 weeks to provide contraceptives. decreased child fertility and mortality
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What are the components to the informal lending sector?
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Family, Friends and traders
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What are the problems with the formal lending sector in developing countries
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1)willing and unwilling default
2) high operating costs 3)asymetric information 4) adverse selection |
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What factor keeps formal banks out of the market in developing countries?
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Adverse selection, banks cant determine risky from safe borrowers.
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what about interest rates makes informal lenders more attractive?
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they can charge different interest rates for risky borrowers
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advantages of informal lending
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they have better information about borrowers
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what are lending cost like in informal sector and do they make a profit?
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Cost are high from obtaining information. even though interest rates are high, the high cost prevent them from making a profit
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what did the UDRY study find?
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1) if borrowers had negative shocks they were not expected to repay the full loan.
2) if lender had neg shocks the borrower payed more to help out 3) This shows there is perfect insurance for borrowers and lenders |
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What is main problem with informal lending?
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The high interest rates due to high costs
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What is micro finaance and what is the goal?
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non government banks that aim to reduce the cost of borrowing
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What 2 ways does micro finance aim to reduce the cost of borrowing?
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1) relying on a group for repayment
2) repeated small loans, on time payments result in larger future loans. |
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Explain Grameen bank.
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First microfinaince bank, had to have less than 1/2 acre to be eligible. The criticism was the 20 % interest rate require subsidization
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Why might some eligible people not enroll in grameen program?
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the inflexible repayment schedule, payments begin at week 1
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factors that lead to asian financial crisis.
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1) liberalization of capital sector making it easier for foreign capital to enter east asia
2) liberalization of banking sector, private banks emerged with no regulation 3) high interest rates in asia encouraged banks to send capital there to earn more interest rates 4) the inflow of cap put inflationary pressure on asia decreasing exports 5) devalued currency which crashed exchange rates |
