An economic institution:

rules/ organization that structures human decisions and resource allocation

The important role of commercial banks and other formal sector financial institutions is:

To channel savings into productive uses

What major economic institution(s) are mentioned in the chapter?

Property and labor markets, business structures, and financial services.

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Chapter 8: Economic Institutions and Informality

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A brief study guide on the effects of informalities within economic institutions.

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Questions 13

Answers

1
Name two (2) ways of measuring the informal economy.
administer surveys to firms or workers
both red and blue
none of the above
infer amount of informal activity from a country's macroeconomic features
2
Financial exclusions include literacy, internet, a cellular device and a gender gap.
True
False
3
An economic institution:
is a neighborhood whose inhabitants do not own their homes or land
stresses impact of organizations and rules on development outcomes.
is how society organizes ownership and exchange of economic assets
rules/ organization that structures human decisions and resource allocation
4
The important role of commercial banks and other formal sector financial institutions is:
To channel savings into productive uses
Encourage the poor to take risks and borrow excessively.
total the share of workers whose wages are taxed.
Deposit and save money in their phone accounts.
5
The effect(s) of informalities in the property market include:
all of the above
major assets not backed or recorded by government
the creation of informal settlements
compromised public services
6
"Some scholars see informality as a result, not a cause, of underdevelopment."
True
False
7
What major economic institution(s) are mentioned in the chapter?
Property and labor markets, business structures, and financial services.
business firm structure and financial services
ONLY property markets
property markets and labor markets
8
What's the significance of microfinance institutions?
MFIs use solidarity lending.
The poor are excluded from commercial banks.
None of the above.
Moneyguards become utilized to their full extent.
9
New institutionalists believe institutions are important because:
all of the above
they shapes incentives of economic behaviors
activities lead to economic progress for society due to incentives
neither of these answers
10
What are some of the risks of informal work and informal firms?
missed opportunity for revenue for public goods and social development
non-access to work-related benefits
stifles economic growth & prosperity due to lack of size/ productivity.
all of the above
11
Dead capital, collateral, and transaction costs are risks of a lack of enforced property rights.
False
True
12
Why does the microlending movement face criticism?
there's not enough money
microloans are narrow and rigid.
contribution to permanent indebtedness
both red and blue
13
The poor cope with financial exclusion only through a means of borrowing.
True
False

Chapter 8: Economic Institutions and Informality Flashcards | StudBud