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Economics Theme 4 > Strategies influencing G and D > Flashcards

Strategies influencing G and D Flashcards

1
Q

Market orientated strategies for improving G and D

A
  • Promotion of FDI
  • Trade liberalisation
  • Removal of subsidies (dependency)
  • Floating exchange rate system
  • Microfinance schemes
  • Privatisation
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2
Q

Interventionist strategies for improving G and D

A
  • Development of human capital (skills)
  • Protectionism
  • Managed exchange rates
  • Infrastructure developments
  • Promoting joint ventures with global companies
  • buffer stock schemes
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3
Q

Other strategies for improving G and D

A
  • Lewis Model
  • Developing tourism
  • Development of primary industries
  • Fairtrade schemes
  • Financial Aid
  • Debt relief
  • Role of IMF WB and NGOs
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4
Q

How can trade liberalisation improve G and D

A

Removing barrier to trade encourages competition which in time improves efficiency, also opens up access to new markets which improves growth

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5
Q

How can promoting FDI improve G and D

A

FDI helps to bring foreign wealth into a country and start business there which can bring in capital and new tech as well as create jobs

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6
Q

How can removing subsidies help to improve G and D

A

Can lead to more efficient allocation of resources which reduces amount of dependent inefficient businesses and increases amount of innovation, also helps gov debt

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7
Q

How can a Floating ex rate system help to improve G and D

A

Domestic firms aren’t protected by currency fluctuations so may become more efficient and productive in order to react to changes, reduces the need for the government in this area.

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8
Q

How can Microfinance schemes help improve G and D

A

Promotes entrepreneurship and alleviates poverty encouraging development

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9
Q

What are Microfinance schemes

A

provision of small scale loans to low income individuals and businesses

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10
Q

How can Privatisation improve G and D

A

Increases competition and competitiveness and innovation, also improves government finance

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11
Q

How can development of human capital improve G and D

A

Investing in education training and healthcare to enhance the skill of the workforce can help to reduce poverty and inequality, also make a more productive and innovative

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12
Q

How can Protectionism improve G and D

A

Protect infant domestic industries from foreign competition to help them get started to create more domestic industry, preserves jobs

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13
Q

Human Capital

A

economic value of a workers skills

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14
Q

How can managed exchange rates help improve G and D

A

Provides stability for international trade and can avoid currency crisis, helps for export led manufacturing growth

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15
Q

How can developing infrastructure improve G and D

A

Improving transport and public facilities helps improve living standards swell as attract FDI improve economic productivity domestically

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16
Q

How can promoting joint ventures with global companies improve G and D

A

local firms partner with foreign firms to gain knowledge and skills and access to new markets and tech

17
Q

How can buffer stock schemes improve G and D

A

Governments maintain commodity stockpiles to protect farmers business and ensures price stability, also helps to alleviate absolute poverty by having food stockpiles

18
Q

How does industrialisation help with G and D

A

Creates jobs and increases wages raising the standard of living, stimulates growth by transferring economy to manufactured exports

19
Q

What is the lewis model step by step

A
  • Excess agricultural labour transferred to industrial which increases both sectors productivity
  • Profits from improved industry can be reinvested over and over to keep improving industry and stimulating growth
  • Isn’t inflationary as wages don’t rise with transfer as it is an excess in agriculture
20
Q

Flaws in the lewis model

A
  • increases inequality gap
  • harmful for environment
  • not always an excess of labour in agriculture
  • Industrial production is capital intensive not requiring loads of human labour
  • Profits have to be re-invested locally
21
Q

How can developing Tourism improve G and D

A

Creates jobs and brings in more valuable foreign currencies and investments

22
Q

How can developing primary industries improve G and D

A

Boosts rural development decreasing inequality, provides raw material supply for industry, mining can be profitable

23
Q

How can fair-trade schemes improve G and D

A

Supports small scale farmers decreasing inequality with fair wages, promotes sustainable agriculture

24
Q

What are fair trade schemes

A

Offer individual farmers in developing countries guaranteed fair prices in return for acceptance of inspections and sustainable farming and employee welfare

25
Q

How can Aid improve G and D

A

Financial assistance given to developing nations to address immediate needs like healthcare and education but also with long term plans

26
Q

Problems with giving aid to developing nations

A
  • dependency on aid
  • pity culture and western saviour
  • misused by corrupt governments
27
Q

How can debt relief improve G and D

A

Forgiving or restructuring developing nations debt to alleviate endless debt trap and allocate gov spending to G and D

28
Q

Problems with debt relief

A
  • risk of moral hazard and dependency culture
  • in corrupt gov extra revenue may be misused
  • can be abused for donor country to gain influence
29
Q

HIPC program

A

heavily indebted poor countries which aimed to alleviate debt that became unstable when ratio of debt to export was over 200%

30
Q

What is the role of the IMF

A

To ensure macroeconomic stability in countries by offering policy advice and economic reforms and loans

31
Q

What is the role of the World Bank

A

Provides loans, grants, debt relief and works with developing nations to alleviate poverty and improve living standards and develop infrastructure

32
Q

criticisms of the IMF

A
  • moral hazard as people can always fall back on IMF
  • giving conditions to countries on loans
  • Restricts free trade
  • lack of transparency
33
Q

criticisms of the world bank

A
  • undemocratic
  • conditional loans
  • works with corrupt governments
  • developed nations have too much influence in it
34
Q

How can NGOs improve G and D

A

Work mainly on development and humanitarian efforts to improve human capital, rights and environment

Economics Theme 4 (17 decks)

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