Strategies influencing Growth and development 4.3.3 Flashcards
How will promoting FDI influence growth and development
Reducing corporation tax or reducing wage costs enable firms to make more profit attracting FDI resulting in increased gov tax rev which can be used to improve infrastructure
How will promoting FDI not lead to growth and development
Reducing minimum wage leads to lower incomes reducing income tax revenues limiting G and D
Reducing corporation tax leads to less tax revenue meaning less money to spend on development
How will Aid in healthcare lead to growth and development
Improved health, Higher productivity, Shifts LRAS to the right, Increases real GDP, Increases economic development
How will Aid in healthcare not lead to growth and development
Corrupt government may not use aid on healthcare
How will education reduce population growth and lead to growth and development
Improved education, Higher human capital, Higher productivity, Higher incomes, Decrease birth rate, Higher quality education, Increases economic development
How will education not lead to a reduction in population growth and lead to growth and development
Religion may not allow the use of contraception
Define Microfinance
financial services targeting small businesses who lack access to conventional banking and related services
How will microfinance lead to growth and development
Microfinance increases productivity, increases income, decreases savings gaps, increases investment, increases gov tax rev, increases development
How will microfinance not lead to growth and development
Microfinance come with high interest rates, leading to lower incomes, decreasing savings gaps
How will property rights lead to growth and development
Property rights can be used as collateral, increasing investment, Increase AD, Increase economic growth and development
How will fair trade schemes lead to growth and development
Money goes straight to farmers, Increases their incomes, Increases consumption, Increases AD, Increases economic growth
How will fair trade schemes not lead to growth and development
Fair trade organisation doesnt monitor the price of products and has no control of how much money goes to farmers
How will debt relief lead to growth and development
Without debt, the government can increase expenditure on education/healthcare/infrastructure increasing productivity
How will debt relief not lead to growth and development
Corrupt government may not use money on development
How do Subsidies lead to growth and development
Lowers costs for domestic producers, Shift Right SRAS, Decreases price level, Increases competitiveness, More profit, More corporation tax revenue, More government spending on development, More development
