Essay - Answers to Economic Development Essay Questions Question 1: the Traditional...

Answers to Economic Development Essay Questions

Question 1:

The traditional, neoclassical school of economic modeling prescribes a "recipe for economic growth." Economic growth is a process of moving resources from low growth, agricultural areas to higher *****, industrial areas. The neoclassical ***** also does not see anything slowing the progress of moving from low growth to high growth areas. ***** neoclassical model in the form of Harrod-Domar ***** assumes that an increase in savings and investment will lead to ***** development. Even though productivity is improved employment ***** not ***** and income does not improve so correspondingly demand for products does ***** occur. Government intervention has hampered economic development by funneling resources into the wrong types ***** industries. Instead of taking advantage of ***** where a country ***** a relative *****, ***** have gone to industries ***** the government wants to develop. One area where the removal of restrictions is essential is in the area of international trade. Increasing exports takes ***** place ***** the typically low ***** for products in *****ing countries. In the developing country itself the government needs to s*****p funding particular industries to the detriment of other *****. Further the government needs to create a favorable environment for use of technology and reinvestment of capital generated ***** industry. However governments are so full ***** bureaucracy and *****refore corruption that they ***** another problem. Th***** is another reason for limited the role of government.

Typically economic growth is measured using ***** Gross National Product (GNP). *****is number represents the total goods ***** services generated by ***** country's economy. An increase in GNP indicates economic *****. Focus solely on economic growth fails to take into account the affects of this growth on particular groups of individuals. The movement of jobs from one sector to another may put an entire group out of work.

***** identifies "three fallacies in development theory." First, theorists have assumed that by solving a single problem, "loosening ***** constraint," economic development will expand. The causes ***** limited ***** development have multiple causes. Loosening one constraint ***** facilitate short-term economic development, but other constraints must be considered ***** longer-term *****. Second, measuring the performance of economic development success solely on ***** basis ***** GDP growth fails to for ***** success criteria, particularly human welfare. Factoring in human costs, such as the dislocation of people, provide a better model for monitoring economic development strategies. Third, the same function of production applies to all countries regardless of *****ir existing social, political, and ***** conditions. Individual countries ***** be given the ability ***** adjust their approach to economic development depending on their current social, political, and economic conditions that ***** change over time.

Question 2:

Traditional economic ***** views rural-urban migration as a necessary ***** in economic development. Typically ***** theory identifies two sectors, the agricultural sector and the ********** sector. Countries begin with population heavily weighted toward the ***** sector. People in the agricultural must be freed up to move ***** ***** ***** industrial sector. The agricultural