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NIOS Class 12 Economics Chapter 3 Economic Growth And Economic Development
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Economic Growth And Economic Development
Chapter: 3
Module – II: Current Challenges Before The Indian Economy
TEXT BOOK QUESTIONS WITH ANSWERS
Intext Questions 3.1
1. “Economic Development is a mider concept than economic growth”. Do you agree with the statement.
Ans: Economic growth is a narrower concept than economic development.
| Economic Growth | Economic Development | |
| Meaning: | Economic growth refers to an increase in the real output of goods and services in the country | Economic development implies changes in income, savings and investment along with progressive changes in socioeconomic structure of country (institutional and technological changes). |
| Factors: | Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports. | Development relates to growth of human capital, decrease in inequality figures, and structural changes that improve the quality of life of the population. |
| Measurement: | Economic Growth is measured by quantitative factors such as increase in real GDP or per capita income. | The qualitative measures such as HDI (Human Development Index), gender- related index, Human poverty index (HPI), infant mortality, literacy rate etc. are used to measure economic development. |
| Effect: | Economic growth brings quantitative changes in the economy. | Economic Development leads to qualitative as well as quantitative changes in the economy. |
| Relevance: | Economic growth reflects the growth of national or per capita income. | Economic development reflects progress in the the quality of life in a country. |
Intext Questions 3.2.
1. Human development is a better measure of economic development as it it places human beings at the centre stage of development. Discuss.
Ans: Human development places human beings at the centre of stages of development. It is now widely used by international organisation to evaluate and rate countries. The income components adjusts per capita GDP as measured in constat international decrease at purchasing power parity (PPP) for inequality by discounting the income of countries that exceed the word average.
Thus, the concept of human development^ is concerned mainly with enabling people to enjoy a better life as the ultimate goal of human endeavor. Highlights that this goal cannot be achieved solely through improvements in income or material well-being.
As the 1996 Humari Development Report put it, growth can be jobless, rather than job creating; ruthless, rather thari poverty- reducing; voiceless, rather than participatory; rootless, rather than culturally enshrined; and.futureless, rather than environment-friendly. Economic growth which is jobless, ruthless, voiceless, rootless and futureless is not conducive to human development. The lack of income brinaomepoverty is only one aspect of human impoverishment; deprivation can also occur in other areas- having a short and unhealthy life, being illiterate or not allowed to participate, feeling personal insecurity, etc. Human poverty is thus larger than income poverty.
Intext Questions 3.3.
1. Non-economic factors are as such important in economic development as economic factor commnet.
Ans: Non-economic factors are as much important in development as economic factor. Here in attempt to explain now they exercise influence on the process of economic development.
1. Human Resources: Human resources on an important factor in economic development. Man provides labour power for prediction and it in a country labour is efficient and spilied, its capacity to growth will decidedly be high. The productivity of illiteracy, unskillful disease, ridden and superstitions people is generally low and they don’t provIDe any hope to developmental work in a country. But in ‘case Human resources remain either unutilized or the manpower management remains defective, the same people who could have made a positive contribution to growth activity prove to be a burden on me economy.
2. Technical Know: How and General Education: The level of technical know-how has a direct bearing on the pace of development. As the scientific and technological knowledge advances, man discovers more and more sophisticated techniques of production which steadily raise the productivity levels.
3. Political Freedom: Looking to the world history of modern times one learns that the processes of development and under development are interlinked and it is wrong to view them in isolation. We all. know that the under development of India, Pakistan, Bangladesh, Sri Lanka, Malaysia, Kenya and a few other countries, which were in the past British colonies, was linked with the development of England. England recklessly exploited them and appropriated a large portion of their economic surplus.
4. Social Organisation: Mass participation in development programmes is a precondition for accelerating the growth process. However, people show interest in the development activity only when they feel that the fruits of growth will be fairly distributed. Experiences from a number of countries suggest that whenever the defective social organisation allows some elite groups to appropriate the benefits of growth, the general mass of people develop apathy towards state’s development programmes. Under the circumstances, it is futile to hope that masses will participate in the development projects undertaken by the State.
5. Corruption: Corruption is rampant in developing countries at various levels and it operates as a negative factor in their growth process. Until and unless these countries root-out corruption in their administrative system, it is most natural that the capitalists, traders and other powerful economic classes will continue to exploit national resources in their personal interests. The regulatory system is also often misused and the licenses are not always granted on merit. The art of tax evasion has been perfected in the less developed countries by certain sections of the society and often taxes are evaded with the assistance of the officials.
Intext Questions 3.4.
1. Which of the following characteristics are most impect found in developing countries.
(a) High population growth rates.
(b) Large number of people living in poverty.
(c) Very traditional methods of agricultural production.
(d) All of the above.
(e) None of the above.
Ans: (d) All of the above.
2. Economic development refers to:
(a) Economic growth.
(b) Economic growth plus changes in output distribution and economic structure.
(c) Sustainable increases in Gross National Product.
Ans: (b) Economic growth plus changes in output distributional economic structure.
3. The common measure of economic development is:
(a) The level of health and education of the population.
(b) The rate of population growth.
(c) Per Capita GDP.
(d) All of the above.
(e) None of the above.
Ans: (c) Per Capita GDP.
4. Developing nations have:
(a) A lower infant mortality rate.
(b) A greater degree of equality in the income distribution.
(c) Lower rate of illiteracy.
(d) None of above.
Ans: (d) None of the above.
5. Sustainable development involves
(a) Reducing Consumption, increasing efficiency and using renewable energies.
(b) Better transportation by building more roads.
(c) Using Resources at maximum rates.
Ans: (a) Reducing Consumption, increasing efficiency and using renewable energies.
6. Sustainability is the use of a resource that doesn’t cause long term depletion of resources or affect the diversity of the ecosystem.
(a) True.
(b) False.
Ans: (a) True.
7. Which three indicators are currently used in the Human Development Index (HDI):
(a) Real GDP per capita.
(b) Birth rates.
(c) Life expectancy at birth.
(d) Employment states.
(e) Educational attainment.
Ans: (a) real GDP per capita.
(c) life expectancy at birth.
(e) educational attainment.
Some Other Important Questions For Examinations
Very Short Answer Type Questions
1. Define economic growth.
Ans: Economic growth is defined as a process of continuous increase in the real national income over a long period of time.
2. Define national income.
Ans: National income is the market value of all final goods and services produced in a country during a year.
3. What is meant by the phrase ‘market value’?
Ans: The phrase ‘market value’ refers to the price at which goods and services are sold in the market. It is given by the product (P x Q) of price (P) and total quantity produced (Q).
4. What is meant by the phrase ‘final goods and services’?
Ans: The phrase ‘final goods and services’ refers to those goods and services that are out of the production process and are ready for use by the consumers.
5. What is nominal national income?
Ans: National income calculated at current prices is called nominal national income.
6. What is the real national income?
Ans: The national income calculated at base year prices is called the national income at constant prices or the real national income.
7. Mention the factors that cause increase in the value of output.
Ans: (i) Quantity produced.
(ii) Price of the quantity.
8. What is ‘base year’?
Ans: Base year is some past year. The prices of the base year are taken to be constant. Presently, the year 1993-94 is the base year for national income accounting in India.
9. How per capita real national income is calculated?
Ans: Per capita real national income
= Real national income/ Total population
10. Define economic development.
Ans: According to Meir S. Baldwain increase in national income in the long run is called economic development. But this definition may not be fit in a country where there is population explosion. So, economic development can be defined as a process by which per capita real income increases. Economic development is simply an increase in economic welfare.
11. What do you mean by GDP?
Ans: GDP is the value of the domestic economy’s output of goods and services in a given period of time.
12. Why the ‘Trickle Down Theory’ has not been very successful?
Ans: The ‘Trickle Down Theory’ of economic development has not been very successful because disparities in income and wealth were observed in various economies of the world during their economic development.
13. Point out one difference between economic growth and economic development.
Ans: Economic growth can take place without economic development but the reverse is not possible.
14. Define sustainable development.
Ans: The Brundtland Commission defined sustainable development as the development that meets the needs of the present generation without compromising the ability of the future generations to meet their own needs.
15. Mention three indicators of development of physical quality of life index.
Ans: (i) Infant Mortality Rate.
(ii) Life Expectancy at Birth.
(iii) Literacy Rate.
16. What is Human Development Index?
Ans: Human Development Index is an index to measure the quality of life in an economy.
17. What is the current rank of India according to the Human Development Report of 2006?
Ans: The Human Development Report of 2006 ranks India at the 126th position among 177 countries.
18. What was the value of India’s HDI in the year 2006?
Ans: The value of India’s HDI was 0.611 in the year 2006.
19. Mention two indicators of economic growth.
Ans: (i) Per-capita real output.
(ii) Real national income.
Q. 20. Who developed the HDI?
Ans: Mahbul-ul-Haq developed the Human Development Index (HDI).
21. What is indicated by the increase in capabilities of people?
Ans: The increase in capabilities of people implies economic development.
22. In what term the economic development should be measured?
Ans: Economic development should be measured in terms of improvements in human development.
