balance between markets and intervention

Question 1

approach to development

Answer 1

• market led strategies

- interventionist stratetegies

Question 2

problems of interventionism

Answer 2

• excessive large public sectors
• nationalization of industries
• excessive gvt spending
• increase in money supply
• huge spending on infrastructure

Question 3

main market led measures

Answer 3

-elimination subsidies and price control
-reduction on protectionist measures
=privatization of industry
-reducing gvt expenditure

Question 4

problems with market led approach

Answer 4

• unlikely to provide public goods
• short run cost on poor people / high unemployment and low public services
• focus on urban areas
• political instability

Question 5

market led strategies of development def

Answer 5

privatization, deregulation, IMF’s Structural Adjustment Policies, etc.

Question 6

intervionist strategies of developmetn def

Answer 6

import substitution, protectionism,

regulations, nationalization of industries, manipulation of exchange rates, etc.

Question 7

infrastructure

Answer 7

basic physical systems of a business or nation. Transportation, communication, sewage, water and electric systems are all examples of infrastructure.

Question 8

sustainability def

Answer 8

ability or capacity of something to be maintained or to sustain itself.

Question 9

poverty cycle

Answer 9

Seemingly endless continuation of poverty. Once a person or community falls below a certain level of resourcefulness, a chain of events starts to occur that tends to perpetuate the situation: progressively lower levels of education and training leading to lack of employment opportunities, leading to criminal activity (such as sale of illegal drugs) for survival, leading to addiction, shattered health, early death, and breakup of family, leading to even bleaker future for the next generation … and so on. This cycle continues until someone intervenes by providing worthwhile means (not handouts) for people to climb out of destitution, and by ensuring children’s health and education.

Question 10

coruption

Answer 10

Corruption is dishonest behavior by those in positions of power, such as managers or government officials. Corruption can include giving or accepting bribes or inappropriate gifts, double dealing, under-the-table transactions, manipulating elections, diverting funds, laundering money and defrauding investors.

Question 11

informal markets

Answer 11

all jobs which are not recognized as normal income sources, and on which taxes are not paid. The term is sometimes used to refer to only illegal activity, such as an individual who earns wages but does not claim them on his or her income taxes, or a cruel situation where people are forced to work without pay. However, the informal sector could also be interpreted to include legal activities, such as jobs that are performed in exchange for something other than money

Question 12

non convertible currencies

Answer 12

Any currency that is used primarily for domestic transactions and is not openly traded on a forex market. This usually is a result of government restrictions, which prevent it from being exchanged for foreign currencies.

Question 13

MNC’s (TNC’s)

Answer 13

Multinational corporation- An enterprise operating in several countries but managed from one (home) country. Generally, any company or group that derives a quarter of its revenue from operations outside of its home country is considered a multinational corporation.

Transnational corporation- A commercial enterprise that operates substantial facilities, does business in more than one country and does not consider any particular country its national home. One of the significant advantages of a transnational company is that they are able to maintain a greater degree of responsiveness to the local markets where they maintain facilities.