Socio-economic development - refers to the ability to produce an adequate and growing

supply of goods and services productively and effectively, to accumulate capital, and to
distribute the fruits of production in a relatively equitable manner.
Economic Development- means sustained and sustainable growth in per capita income,
accompanied by diversification of production, reduction of absolute poverty, and expanding
economic opportunities for all citizens.
Developing countries usually share most of the following characteristics:
 Low real income per capita
 Low capital to labor ratio
 Low level of literacy
 High birth rate  High infant mortality
 Low levels of productivity
 Poor industrial and social infrastructure
 High proportion of the population employed in agriculture and primary product exports
 High rates of population growth and dependency burdens
 High and rising levels of unemployment and underemployment
 Dominance, dependence, and vulnerability in international relations  Low levels of
living

1. State and briefly explain the two approaches that can be distinguished when discussing the
concept of Development.

I. The fight against poverty - This approach focuses on the problems of widespread poverty,
hunger & misery in developing countries.
II. The analysis of long-term economic and social development - This approach concentrates
on comparing developments in different countries, regions and historical periods in order to
gain better understanding of the factors that have long-term effects on the dynamics of
socio-economic development.

2. List at least 5 of the succession of ideas & slogans that have played a role in post-war discussions
of development.

 the idea that large-scale injections of capital are the key to development
(‘big push’)
 the ‘small is beautiful’ movement;
 human capital as the missing link in development;
  the green revolution as a technological fix for agricultural development;
 community development; appropriate technologies;

3. list and comment on a few examples of great differences in development that have occurred in
the different parts of the world as contended by (Szirmai, 1993).
ANS:

4. What are some of the reasons/factors that a developing country may experience problems
increasing its output and productivity?

- Technical problem
- Human Resource:
- Natural Resource
- Capital Formation
- Social and Political Factors

5. What are some of the basic questions that are always associated with Development?

- why are poor countries poor and rich countries rich?

- Why do poor countries lag behind rich countries in the development of their standards of living?
- How can poor countries become more prosperous?
- How can poor countries catch up with the rich countries?

6. Define what is Economic Development and how it is impacted by Technological Change?

- refers to growth accompanied by qualitative changes in the structure of production and

employment, generally referred to as structural change. It is impacted by technological change
because it results radically new modes of production & new product ranges.

7. Differentiate between Economic Growth & Economic Development.

- Economic growth refers to an increase over time in a country`s real output of goods and services
(GNP) or real output per capita income. Development relates to growth of human capital
indexes, a decrease in inequality figures, and structural changes that improve the general
population's quality of life.
8. What are the 3 additional requirements for the use of the term development according to Seers
(1979).

(I) there should be a decrease in poverty and malnutrition,

(II) that income inequality should decline,

(III) and that the employment situation should improve

9. Criticism of growth fetishism led to the emergence of so-called ‘social indicators’: What are these
indicators?
 life expectancy,
❖ literacy,
❖ levels of education,
❖ infant mortality,
❖ availability of telephones,
❖ hospital beds, licensed doctors,

10. What is the Malthusian Movement all about?

- Malthusian movement which maintains that continued economic growth will disturb the
balance of nature, and will eventually lead to ecological catastrophes

11. What are the 3 ways in which National Income is calculated?

(i) Product Method - In this method, national income is measured as a flow of goods and
services.
(ii) (ii) Income Method,
(iii) (iii) Expenditure Method. 1. Product Method: In this method, national income is
measured as a flow of goods and services.

12. What is the difference between GNP and GDP?

- The monetary value of all the goods and services produced within the geographical limits of the
country is known as GDP. GNP measures the production of products by the companies and
industries owned by the residents of the country.

13. What are the Technical Problems in Calculating GDP and Hence Measurement of Economic
Growth?

- Technical Objections and Substantive Objections

14. What is the difference between Technical Objection and Substantive Objection?
  substantive objections include that the question calls for privileged information. Technical
objections Goal of a research and development (R&D) program that may
require completion of one or more projects for its successful
completion.

14. What are Purchasing Power Parities (P.P.P)?

- to compare economic productivity and standards of living between countries is

purchasing power parity. PPP is an economic theory that compares different countries.

15. Differentiate between Nominal GDP & Real GDP.

- Nominal GDP is the market value (money-value) of all final goods and services
produced in a geographical region, usually a country. Real GDP is a macroeconomic
measure of the value of output economy, adjusted for price changes.

15. How is HDI Calculated?

- Health - Life expectancy at birth

- Education - measured by adult literacy and the combined primary, secondary and tertiary
enrolment ratio
- Income - measured by GDP per capita (PPP US$)
The indicators of the three dimensions are calibrated and combined to generate an HDI score
between zero and one.

16. Explain the 3 classifications of countries based on per capita gross national income (GNI)
byWorld Bank (2011).
- Geographic regions -
- Income groups –
- For example, generally people living in countries with higher GNI per capita tend to have
longer life expectancies, higher literacy rates, better access to safe water, and lower
infant mortality rates.

17. What are the main points of Adam Smith’s theory of Economic Development (ConsultChapter2
PPT)?
Adam Smith proposes natural law in economic affairs. He advocated the philosophy of free and
independent action.

- If every individual member of society is left to peruse his economic activity, he will maximize the
output to the best of his ability.

- Freedom of action brings out the best of an individual which increases society wealth and
progress
18. What is meant by the concept of “Laissez-Faire”?
- The policy of laissez-faire allows the producers to produce as much they like, earn as
much income as they can and save as much they like.
19. According to Adam Smith what are the three factors of production?
- labor, capital and land
20. What are the 3 benefits of labor according to Adam Smith?

- Increase of dexterity of workers.

- Saving time required to produce commodity.

- Invention of better machines and equipment.

21. David Ricardo: Explain Ricardo’s theory of Comparative Advantage

- to explain why countries, engage in international trade even when one country's workers are
more efficient at producing every single good than workers in other countries.

22. What are the Sources of Growth of GDP per capita?

- Quantity of Resources consumed & Pollution per unit of output (E/GDP) Output per capita
(GDP/P) &

23. Solve one problem using the Production Function.

Population size(P).

E = (E/GDP) X (GDP/P) X P

27. State the perspectives of Malthusian Pessimists as it relates to Population increase

- Malthusian pessimists believe that pop growth threatens human welfare & that there are physical
limits to the increase in pop, such as

✓ Availability of land

✓ Scarcity of energy & raw materials, &

✓ The carrying capacity of the global environment.

28. Comment on the 2 mechanisms as contended by Malthusian Analyses.

- Influence of increasing welfare on population growth & Law of diminishing marginal returns in
food production. Standard of living improve = more children Food production will be unable to
keep up w/ pop growth.

29. Explain what is the neo-Malthusian Trap

- Developing countries in danger of getting caught in equilibrium at a low level of economic

development.

30. There are ever stronger indications that the growth of world pop & the associated growth of world
production are beginning to form a threat to the environment at a global level, w/ consequences
which may be irreversible.

These indications include:

(A) DEFORESTATION- the conversion of forest to another land use or the long term reduction of
trees canopy cover below a 10% threshold. Deforestation implies the long term or permanent
cover and its transformation into another land use.

(B) The effects of deforestation are significant, not just for the countries that lose trees, but for the
global community as a whole. They include loss of habitat for animals and people, soil erosion,
drier air and a warmer planet.

(C) (B) THEGREENHOUSEEFFECT - Greenhouse effect may lead to irreversible climatic changes,
such as Global Warming.

(C) THE DILUTION OF THE OZONE LAYER

Dilution of the Ozone Layer increases the danger of skin cancers & related diseases.