Classic Modernization Theory Relies on an Empirical Association Between Income

question 42

Multiple Choice

Classic modernization theory relies on an empirical association between income and democracy. The variant of modernization theory examined in Chapter 6 states that it is not income per se that encourages democracy but, rather, changes in the socioeconomic structure of a country that accompany development. The advantage of this variant of modernization theory is that it explicitly provides a causal mechanism linking economic development and democracy. Scholars testing this variant often continue to use a measure of income (such as gross domestic product (GDP) per capita) to represent the level of development. Why?

• A) because a country's GDP per capita exactly measures the level of development of its socioeconomic structure
• B) because a country's level of GDP is generally a reasonable proxy (substitute) for the level of development of a country's socioeconomic structure (To capture other features, scholars often include measures of natural resource abundance, such as oil, as well.)

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Definitions:

Budget Variance

The difference between the budgeted or planned amount of expense or revenue, and the actual amount incurred or received.

Fixed Overhead Budget Variance

The variance between the budgeted and the actual incurred fixed overhead expenses.

Manufacturing Overhead Applied

The portion of estimated manufacturing overhead cost that is assigned to each unit of production based on a predetermined rate.

Labor-Hour

A labor-hour represents an hour of work performed by an employee, typically used as a basis for allocating labor costs or measuring productivity.