CHAPTER 75 FACTORS INFLUENCING GROWTH AND DEVELOPMENT

Question 1

Capital flight

Answer 1

When savings are sent abroad by citizens and firms of a country to another country which is either seen as being more secure or where the money can be hidden from government authorities.

Question 2

Dutch disease

Answer 2

In economics, where exploitation of natural resources leads to a rise in the exchange rate and the loss of international competitiveness of the country in the production of non-resource goods and services.

Question 3

Foreign exchange gap

Answer 3

The difference between the actual level of exports and the level of exports needed to create higher economic growth for an economy.

Question 4

Harrod-Domar growth model

Answer 4

A model which suggests that economic growth is dependent on the saving ratio and technological progress.

Question 5

Rent seeking

Answer 5

Behaviour which attempts to gain a share of an existing pot of income or wealth rather than creating higher income or wealth.

Question 6

Resource curse

Answer 6

Exists where an abundance of natural resources in a country is exploited, but where there is consequently little increase in economic development.

Question 7

Savings gap

Answer 7

In development economics, the difference between actual level of savings in an economy and the level of savings needed to finance the investment required for a higher rate of economic growth.