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economics > Economic growth and development > Flashcards

Economic growth and development Flashcards

1
Q

why is growth good for development

A

An increase in growth is going to mean higher income for people within there country

-with higher incomes, that’ll imply that more jobs have been created

-Also the quality of life of people will improve as people are able to buy more goods and services
-material standards of living has improved

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2
Q

What does material standards refer to

A

goods and services

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3
Q

how is material standards measured

A

gross domestic product

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4
Q

What does non-material standards include

A

Environmental: clean water and clean air

crime rate: High crime discourages from people going out and this will frequenting business

freedom of speech: freedom to speak and participate in society as well as the economy

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5
Q

2 why is growth good for development

A

increase in growth

higher profits

fiscal dividend

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6
Q

What are the knock on effects of high profits

A

-Firms will make higher profits
-Therefore there confidence will improve
-more willing to hirer people
-increase in output therefore increase in sales

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7
Q

What does an advance in technology mean

A

This means that the dualistic economic structure in the economy can disappear, thus we can move away from agriculture based production in the economy towards a more serviced based production/manufacturing based production

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8
Q

what is dualistic economic structure

A

A dual economy the existence of two separate economic sectors within one country, divided by different levels of development, technology and different patterns of demand

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9
Q

what is Judaism

A

Judaism, monotheistic religion developed among the ancient Hebrews

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10
Q

What will fiscal dividend do

A

If there is growth in the economy we can assume that there’ll be higher tax collection
-higher profits higher corporation tax

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11
Q

With all the things that fiscal dividend do what will the government do with this added revenue

A

If governments are efficient and there motives are pure then they’re going to spend this money on areas that promote development e.g health care, education and infrastructure.

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12
Q

What are the limitations of growth

A

-Growth is not all-encompassing

-Not always equal development

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13
Q

Why are there limitations of growth

A

-there is no guarantee that growth is going to be equally distributed in the economy

-Incomes may differ

-standard of living doesn’t increase for all

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14
Q

What are some downsides of growth

A

-Negative externalities and sustainability

-Growth in one dominant sector, does not mean growth for all

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15
Q

Sen’s definition of economic development

A

The process of improving people’s well-being and quality of life, involving improvement in standards of living, reduction in poverty, improved health and education along with increased freedom and economic choice

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16
Q

Todaro’s definition of economic development

A

-Availability and distribution of life-sustaining goods -> food, shelter and health

-An increase in standards of living

-Expansion and economic and social choice

17
Q

What is economic growth

A

Economic growth means an increase in real GDP
Which means an increase in the value of national output/national expenditure

18
Q

What are the causes of economic growth from the supply side (LRAS)

A

-Increase investment
-Higher labour productivity
-Discover raw materials
-Increase in labour force
-Improvement in technology

19
Q

What are the two supply side types

A

-Interventionist supply Side policies
-Market based supply side policies

20
Q

What is interventionist supply side policies do

A

Promotes more of a role for government to boost economy

21
Q

What are the interventionist supply side policies

A

-Government spending on education and training

-Government spending on health care

-subsidies to firms to promote intervention

22
Q

What does government spending on education and training

A

-build more schools

-To hire more teachers

-To train more teachers

23
Q

What does government spending on health care entail

A

Improve the quality of labour

24
Q

What does subsidies to firms to promote intervention

A

-New transport infrasturture being built

-existing transport infrastructure being upgraded
—new roads, ports, airports, railway lines, bridges

25
Q

What does upgrading transporting infrastructure entail

A

Long run cost of production will fall because it’s easier and cheaper to access raw materials for business and cheaper to sell them

26
Q

What Land polices can be changed to increase economic growth

A

-change planning laws
-relaxing the rules- making fracking and cracking much easier
-technology-create in habitat land
—creating genetically modified plants

27
Q

What capital polices can be changed to increase economic growth

A

low and sustainable interest rates- encourage capital investment

-tax allowances against capital investment

28
Q

what are brown field sites

A

previously developed land that is not currently in use

29
Q

What entrepreneurship can be changed to increase economic growth

A

-cut inheritance tax
cooperation tax
capital gains tax

30
Q

What are the market based supply side policies

A

-tax reform
-Labour market reform
-Competition policies

31
Q

what does tax reforms entail

A

lower corporation tax means firms have more disposable income so they can reinvest into there firms or the economy

-lower income tax - more disposable income

32
Q

what does labour market reform entail

A

-Reduce unemployment benefits
-Reduce minimum wage
-Reduction in trade union power

33
Q

What does reduction in minimum wage and reduction in trade union power mean

A

lower cost of production for business

boosting productivity efficiency in the economy

boosting LRAS

34
Q

What does competition policies entail

A

-Privatisation
-Deregulation
-Trade liberalisation

35
Q

What do competition policies aim to do

A

The strategies aim to boost competition in the market and when that happens firms have to reduce there LRAS in order to be competitive

36
Q

What are the cons

A

-No guarantee of success

-A lot of these policies are very costly

-time lags

-negative stakeholders impacts

-need a target for supply side policies

-supply side polices and boost growth really depends on the size of the output gap and the stage of the economic cycle the economy is in

economics (13 decks)

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