Impact evaluation is a powerful method to measure the True ATE, but can be difficult in practice since it can be prohibitively expensive to collect counterfactual data.

There are 5 true and false questions and one short answer question.True/False and Justify:For each of the following statements, choose whether it is true or false, and justify your choice with a brief explanation.1.Impact evaluation is a powerful method to measure the True ATE, but can be difficult in practice since it can be prohibitively expensive to collect counterfactual data.2.Even if the Lorenz curves for two countries overlap, we may still be able to compare the two curves and say that one country has more inequality than the other.3.Esther Duflo would agree that “big picture” questions (like “how do we reduce poverty?”) can be directly answered using Impact Evaluation.4.If we could eliminate income inequality everywhere, everyone would have access to the same opportunities to improve their economic status.5.Since exchange rates don’t fully account for differences in cost of living, we can use purchasing power parity (PPP) rates to compare the cost of one good (or basket of goods) in country A with the cost of a different good (or different basket of goods) in country B.Positive/NormativeThere are many ways in which COVID-19 will continue to significantly impact developing countries. Choose one way, briefly describe it, and suggest (in 1-2 sentences each) a normative and a positive reason for why this concern is important.