Chap 3 and 4

Question 1

According to him, the transition from underdevelopment to development can be described in terms of a series of steps or stages through which all countries must proceed

Answer 1

Rostow’s Stages of Growth

Question 2

Who created Rostow’s Stages of Growth

Answer 2

American Economic Historian Walt T. Rostow

Question 3

a functional economic relationship in which the growth rate of GDP depends directly with the national net savings rate and inversely on the national capital output rate

Answer 3

Harrod-Domar Growth Model

Question 4

A theory of development in which surplus labor from the traditional sector is transferred to the modern agricultural sector, the growth of which absorbs the surplus labor, promotes industrialization, and stimulates sustained development

Answer 4

Lewis two-sector model

Question 5

Is an exogenous model of economic growth that analyzes changes in the level of output in an economy over time as a result of changes in the population growth rate, the savings rate, and the rate of technological changes

Answer 5

Solow Growth Model

Question 6

an economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country’s individual citizen and businesses

Answer 6

Market Economy

Question 7

the unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically

Answer 7

Invisible Hand

Question 8

Invisible hand is also known as

Answer 8

Laissez-faire or let go