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Economic Development PRELIM EXAM

This document contains questions for an economic development course and responses about understanding developing countries from an economic perspective. It discusses that economics is central to understanding development problems because economic factors determine a country's development. Rapid economic growth could improve livelihoods for poor families in India but may not change their lifestyles and values. Globalization has impacted incomes and jobs in both developed and developing countries. Strictly applying Western economic theories without consideration of context can hinder understanding of developing nations.

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447 views5 pages

Economic Development PRELIM EXAM

This document contains questions for an economic development course and responses about understanding developing countries from an economic perspective. It discusses that economics is central to understanding development problems because economic factors determine a country's development. Rapid economic growth could improve livelihoods for poor families in India but may not change their lifestyles and values. Globalization has impacted incomes and jobs in both developed and developing countries. Strictly applying Western economic theories without consideration of context can hinder understanding of developing nations.

Uploaded by

adie2thales
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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TO: Prof.

Paul Espinosa SUBJECT: Economic Development AE 12

QUESTIONS TO DISCUSS

1. What do you hope to gain from a course in economic development (other than a good
grade)?
Will I assume that I can learn all those stuffs that are belong in Economic Development?
The Development economics focuses on the development process in low-income. Economic
development is the increase in economic output and the development of "more advanced" ways
to produce better quality goods and services. A greater understanding of economic principles that
are important to economic development. Answered by these questions enable to know it better;
why there are differences between countries in average economic welfare and its dispersion.
What it means to live in the developing world that encompasses more than two-thirds of the
world's population; and efforts to gain insights into a developing economy that the student knows
well.

2. Why is studying economics so central to understanding the problems of developing


countries?
It’s because the development in every country depends on their economic factors. The
economic status will help the one country on how to development and improve more their
country, the economic policies that determine whether or not it develops and how fast it develops
if it performs. The economics will distribute the wealth and finance in every country and also the
causes and effects of borrowing and lending. We need to study about, Economics because it
teaches about development problems so that we can interpret it better in these problems primarily
by just looking at the economic components that defined several of troubles. This is also a social
science that is concerned with the peoples and the economic development problems. As
economics improves the making of choices in LDCs, their problems will be less severe.
Economic analysis focuses on ways to improve the material well-being of the population, and the
past experience of economies trying to improve economic performance.
3. What impact might rapid economic development have on the lifestyle of Balayya’s
family? Kolkata’s marginally employed? Software workers and capitalists?
Balayya’s family:
Balayya's family is involved in farm labor. True economic development involves
improving the economic position of the bottom one-fourth to one-half of the population.
Development for the masses will improve Balayya’s family’s average economic welfare and
increase the likelihood of migration to areas of India with better economic opportunities.

Kolkata’s marginally employed:


Economic development for India’s poorest will improve the standard of living of
Kolkata’s marginally employed. Development should mean increased prosperity that spreads to
the poor as well as increased educational, training, and employment opportunities; more tax
revenue to improve transport, services for the homeless; and better cleaning and custodial
services for Kolkata.

Software workers and capitalists:


Increasing development and globalization improves opportunities for information
technology exports and for starting new information-technology (IT) firms and hiring IT
workers.

4. What effect has globalization and outsourcing had on income and employment in
North America? In India and China?
Both Indians and North Americans are living in worlds affected by domestic economic
change and greater integration into the global economy. In the United States, household income
distribution is shaped more like an hourglass, with a slender middle, so that families such as the
Smiths are falling from the middle class from job loss or rising to higher incomes. In India, the
gains from economic growth and reform – although these gains bypass some – mean rising
commercial farm income for the families of Sridhar and Balayya and increased business and
employment opportunities in the cities. With globalization, the worlds of India and the
United States increasingly are intersecting, much beyond the expanding Indian-American
representation in electronics, academics, business, medicine, and journalism in the United States.
Some U.S. corporations (or state or local governmental units) outsource service jobs to India,
where an entry salary for a university graduate is $US300–500 monthly, a good salary and career
opportunity by local standards. The corporation may have an Indian subsidiary or may
subcontract work to an Indian firm. In India, two million

Globalized firms, in their search for lower costs, are hiring Indians (and Chinese,
Bangladeshis, and Malaysians) to do their work in place of middle-class Americans, Britons,
Swedes, or Dutch; and in some instances, as noted earlier, Asians are subsequently establishing
enterprises that compete globally

Indian and Asian elites anticipate doubling real incomes in a generation. By contrast, the
middle classes of the United States and other industrialized countries are facing a collapse in
growth (doubling real incomes not in one but in three generations), more competition from
foreign skills, and lowered expectations for a better life

5. Would you expect the development goal for the Indian poor to be a lifestyle like that of the
Smiths?
While many Indian poor would aspire to attain the material level of living of the Smiths
(or the level of their more affluent neighbors or the Indian middle class), these poor are not likely
to adopt the Smiths’ religious views, tastes, and values.

6. Why are economic theories about developing countries different from those based on Western
experience? What assumptions are involved in each case?
Since LDCs differ from DCs in many ways, economic theories based on assumptions
valid in DCs may not be applicable to LDCs. For example, unlike developed countries,
developing economies frequently do not have a mobile and highly educated labor force,
commercial farmers with sizable land holdings, large numbers of responsive entrepreneurs, a
favorable climate for enterprise, a high level of technical knowledge, local ownership of
industry, heavy reliance on direct taxes for revenue, a large number of export commodities, an
average income substantially above subsistence, a well-developed capital market, or a high
savings rate.

7. Give an example of how rigid adherence to Western economic theory or uncritical


examination of development statistics may hinder understanding the developing world.

In the West, farmers are likely to adopt improved agricultural extension practices such as
using higher yielding varieties of grain. In LDCs, where farm incomes may be at subsistence,
farmers may not be willing to adopt these improved practices because the risks associated with
failure would be disastrous for the farmer operating at the margin of subsistence. Thus
innovations are often much more difficult to introduce into these societies.
Prepared by: Ruby Ann Songahid
BSA AE 12

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