Q.1 Examine
the role of Institutional or domestic factors in economic development.
Answer:
Institutional factors affecting development
There are a number of domestic or non-economic factors
that act as sources of economic development and barriers to development.
Kindleberger presented several non-economic factors: “The various aspects to be
touched upon include the orientation of the individual in his society, family,
class, race, and religion, rural-urban differences, national character, size of
social unit, effect of culture on institutions, and interaction of cultural
values and economic change”
Ø The main institutional factors are
Ø Education
Ø Healthcare
Ø Infrastructure
Ø Political Stability and corruption
Ø Legal system
Ø Financial system, credit and micro finance
Ø Taxation
Ø The use of appropriate technology
Ø The empowerment of women
Ø Income distribution
Q.2 What
is the role of population in economic development?
Answer:
Human Resources -
Growth of population is not always a curse for the society but sometimes
it can be a boon as well, increasing population provides opportunity for
expanding market base in the terms of demand and supply of goods and services,
and more work force for producing such output.
Demand for goods
Working age population
Education and skilled manpower
Health and Nutrition
Demographic Dividend of Human Capital.
Investment on human
beings in the form of education, training and health facilities that contribute
to increased productivity is called ‘human capital formation’.
In developed nations the health and education levels are much higher,
and with better health and education, these countries produced larger output
and higher incomes.
The role of human capital formation in economic development can be
stated in the terms of increase in output, in productive capacity, improved
quality of life and increase in inventions and innovations.
Q.3 Distinguish
between economic Growth and Economic Development.
Answer:
The fundamental differences between economic
growth and development are explained in the points given below:
- Economic growth is the positive change in the real
output of the country in a particular span of time economy. Economic
Development involves a rise in the level of production in an economy along
with the advancement of technology, improvement in living standards and so
on.
- Economic growth is one of the features of economic
development.
- Economic growth is an automatic process. Unlike economic
development, which is the outcome of planned and result-oriented
activities.
- Economic growth enables an increase in the indicators
like GDP, per capita income, etc. On the other hand, economic development
enables improvement in the life expectancy rate, infant mortality rate,
literacy rate and poverty rates.
- Economic growth can be measured when there is a positive
change in the national income, whereas economic development can be seen
when there is an increase in real national income.
- Economic growth is a short-term process which takes into
account yearly growth of the economy. But if we talk about economic
development it is a long term process.
- Economic Growth applies to developed economies to gauge
the quality of life, but as it is an essential condition for the development,
it applies to developing countries also. In contrast to, economic
development applies to developing countries to measure progress.
- Economic Growth results in quantitative changes, but
economic development brings both quantitative and qualitative changes.
- Economic growth can be measured in a particular period.
As opposed to economic development is a continuous process so that it can
be seen in the long run.
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