Rapid economic growth has not solved sociological problems like poverty and homelessness b. According to U.S. trade data, total trade between the two countries grew from $5 billion in 1980 to $660 billion in 2018. South China Morning Post (25 May 2011) by Tom Holland (reproduced here with permission of the author). Data from 2010 was used for life expectancy and under-five mortality and the latest available observations for each cou… Initial Period of Rapid Growth . A. The higher level of saving ensures a higher rate of investment and capital formation which stimulates growth. As poorer people gain access to affordable goods and services, the benefit is dramatic. Nepal’s growth has rebounded strongly following a good monsoon, reconstruction efforts after the 2015 earthquake and normalization of trade with India, says the Bank. Wikibuy Review: A Free Tool That Saves You Time and Money, 15 Creative Ways to Save Money That Actually Work. It has been the standard measure of economic strength ever since. There are, however, positive and negative effects of economic growth and one of the negatives is the damage growth does to the environment. 69. The total consumption of materials and energy needs to be reduced, starting with developed countries. There are not one but several explanations, both economic and non-economic, for […] If you live in a country that goes through years or even decades of being stagnant or declining economically, you do rejoice when the economy picks up. a) Limiting growth will contribute to more income equality across nations. That's not to say China should immediately embrace a European lifestyle - heaven forbid - but it does mean that the country's economic development could be advanced considerably if only its government and people were to abandon their unhealthy fixation on the rapid growth of GDP. Goals for more growth should specify more growth of what, and for what." Increased output of particular goods also tends to mean lower production costs per unit, which makes goods more affordable. The uncomfortable truth to be faced by policy makers is the following: Economic growth is ecologically unsustainable. What's remarkable here is not that the Chinese tourists found Europe slow-moving - Americans have been saying the same for decades - but that their automatic assumption that fast growth is the best, indeed the only, measure of a country's economic success. D) Growth provides an economic environment favorable to education and self-fulfillment. Definitions of fast economic growth can vary. According to Geert Hofstede, which of the following is a key cultural dimension that helps account for rapid economic growth in Asia? Proponents of economic growth make all of the following arguments except: A) Growth is the basic means of improving living standards. Better pay for each job. Although the country's leaders aren't building pyramids, they may be doing the modern equivalent: building hundreds of expensive airports, high-speed rail lines and glittering financial centres that can never hope to generate a return on the investment involved. In other words, although it says a great deal about how much stuff you can churn out, it tells you very little about the state of your economic development. As Chapter 4 showed, in Europe, Japan, and North America economic growth has been accom-panied by moderate population growth, which "That's the only way to keep the economy growing.". The average world GDP growth is slightly under 3 percent, annually. Which of the following could not be considered a major economic system? This consideration is especially important for China. Economic growth means an increase in real GDP - this leads to higher output and higher average incomes. Economic growth can also lead to problems of congestion as more people can afford to buy a car, but it is hard to increase the supply of roads to meet demand. Growth is usually measured by output, namely the total value of goods and services produced by an economy. I am concerned about natural resources like oil running out when the demand goes up. (NOTE: Round this to two places past the decimal point.) As of 2017, the following countries have made the top ten list of fastest growing economies; interestingly, they are all developing countries. Even though deepening human and physical capital will tend to increase GDP per capita, the law of diminishing returns suggests that as an economy continues to increase its human and physical capital, the marginal gains to economic growth will diminish. The main argument for fast economic growth is simply that the economy can produce more, which should in turn mean the population as a whole has a higher living standard. Double counting in the national income accounts will be avoided if GDP is computed by totaling all: Suppose the value of your home increases from $100,000 to $125,000. In other words, the student rebellion can be viewed as a kind of mass reaction to rapid economic growth. Explain the counter arguments in favour of increasing the level of a country's GDP. The following are arguments in favour of planning: 1. That is, an increase in economic activity is seen as being inevitably bad for the environment, while environmental policy is regarded as imposing a drag on growth.
A) Sociological problems like poverty have not been solved by growth. A first argument is based on diminishing marginal returns. There is no doubt that resources are also fruitfully used under laissez faire policy, but these are exclusively induced by profit motive and self-interest. There are many arguments against economic growth which support the idea that economic growth is bad for the economy. Population Growth and Economic Development of a Country! China’s rapid economic development is an aggregate outcome of the introduction of the reforms in phases since 1978. The Measurement of Human Capital in Economic Growth In the late 1980s and early 1990s, empirical macroeconomists turned to attempts to explain differences in growth rates around the world. This chapter sets out to examine the validity of this perception: is it true that environmental quality and Another major benefit of fast economic growth is that it can help cope with rapidly expanding populations. a. No doubt the speed at which the tourists swept past the architectural and artistic glories of Paris, pausing only to snap the obligatory photographic record of their presence before heading off for an orgy of handbag shopping, would have raised some supercilious French eyebrows. Governments often try to increase the growth rate because it will have various advantages. c. The Earth has only finite amounts of natural resources. Relationship between Population Growth and Economic Development: The relationship between population growth and economic development may be summarised in the words of Robert McNamara—the past president of the World Bank. B) Economic growth rates tend to be higher in countries where the government enforces property rights. There exists a strong positive association between average income (or wealth) and indicators of population health status, which is evident both across countries and within countries.1,2 Illustration 1depicts indicators of population health (life expectancy at birth, under-five mortality rates, and the prevalence of stunting), all in logs, against log Gross National Income (GNI) per capita. A few years ago, the State Environmental Protection Administration did try to factor pollution costs into the country's GDP figures. The volatility of rapid economic growth as it departs from its major trend, has a very short-term effect (within a year) to increase mortality-partly owing to … Which of the following was a reason for the rapid growth of boom towns in the West during the late 1800s? What was the average annual economic growth rate between 1981 and 1988.00? Several arguments suggest that low-income countries might have an advantage in achieving greater worker productivity and economic growth in the future. Watching cultures collide - even at second hand - is always illuminating. 10 Countries Seeing Economic Growth. C) Economic growth is necessary but is NOT desirable in any way. However, once the poor are able to buy everything that the middle class has, they are no longer considered poor. 2) One argument concerning economic growth made the following argument. If they find a way to grow, they don't seem to care how it affects the environment. But equally, for their part the visitors were taken aback by the leisurely pace of life in Europe, where the locals linger over coffee, prohibit bus drivers from working more than 12 hours a day, and even stop their cars for pedestrians. a) Limiting growth will contribute to more income equality across nations. arguments against growth. Rising incomes allow people to buy more education, medical care, and recreation. To what extent do you agree with these arguments? Learn vocabulary, terms, and more with flashcards, games, and other study tools. They need to feel that they are doing better than others, and fast economic growth can take that away from them. There are many arguments against economic growth which support the idea that economic growth is bad for the economy. The conclusion that rapid population growth has slowed development is by no means straightfor-ward or clearcut (see Box 5.1). B) Economic growth is not desirable. India is the fourth-fastest-growing economy with 7.2% projected growth, thanks in part to a rise in exports and an increase in government spending . As Simon Kuznets, the US economist who originally developed the idea of gross domestic product, warned: "Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long run. Start studying Economic Growth Questions. These are. Proponents of economic growth make all of the following arguments except: A) Growth is the basic means of improving living standards. One of the major arguments against fast growth of the economy is its sustainability. A) Sociological problems like poverty have not been solved by growth. For example, GDP counts all investment as positive, whether or not that investment turns out to be productive in the longer run. Perhaps the biggest point of contention regarding economic growth is its effects on inequality. More opportunity for start-up businesses to find a market. d. physical quality of life index. But when it found that including environmental costs would have reduced growth by at least a third, the attempt was quickly discontinued. Per capita incomes (measured in US $) have doubled in 12 years; But India has one third of all the people in … I think this is silly, but it is how some people feel. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. The environment often suffers abuse at the hands of greedy companies. We seem to be slowly going downhill. If we could get a major factory interested in opening up here, then so many people could get jobs. Inequality Higher rates of economic growth have often resulted in increased inequality because growth can benefit a … India has sustained rapid growth of GDP for most of the last two decades leading to rising per capita incomes and a reduction in absolute poverty. The average world GDP growth is slightly under 3 percent, annually. b. communism. Growth at the Frontier 5 1.1 Modern Economic Growth 5 1.2 Growth Over the Very Long Run 7 2. 2 Arguments from an economic perspective Economic growth has for a long time been one of the concerns of the academic subject of economics. Critics believe that unrestricted growth may widen inequalities, which could cause social unrest. MCQs Economics of Growth and Development- Semester 3. What Are the Characteristics of Modern Economic Growth? c. socialism. All production is regarded as positive, even if the pollution it causes reduces the productive capacity of the agricultural sector and pushes up health care costs. The Republic of Korea, one of the so-called "East Asian tigers", achieved extremely rapid economic growth and industrialization following the upheaval resulting from the Korean War (1950-1953). We take a … The biggest advantage of economic growth is that it leads to higher standard of living of the citizens of the country as higher economic growth implies higher per capita income which in turn improves the standard of living of people of the country. Jones Stanford GSB, Stanford, CA, United States NBER, Cambridge, MA, United States Contents 1. China is currently the United States’ largest C) There is a direct relationship between a growing real GDP and rising pollution. Let us examine the factors that conditioned this response, starting with the transformations wrought upon Japanese society by rapid economic growth, and moving on to further changes precipitated by the student uprising itself. New Delhi: India has the potential for “very rapid” economic growth over the next decade which will lift people out of poverty and allow the government to invest in health and education priorities in an “exciting way”, billionaire philanthropist and Microsoft co-founder Bill Gates has said. This made the concept very popular in all the countries of the world even capitalistic free market economies like UK and USA have tended towards planning. These are. The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR's), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. Question 2 Consistent with this argument, the states on the West Coast of the United States have seen rapid economic growth as has experienced rapid economic growth. (1992), 224 European Review of Economic History ... rapid economic growth during the 1950s, especially in Japan and West Germany. At least in principle, governments can work to enable the benefits of agglomeration to be better achieved and the costs of congestion to be reduced. Removing barriers to rural–urban mobility may enable economic growth, but the economic benefits will be much larger with supportive policies, markets and infrastructure investments. B) It is easier to reduce poverty when the economy is growing than when it is not. The following are the various factors that led to the rapid growth in the economic development in China: In the initial phase, reforms were initiated in agriculture, foreign trade and investment sectors. In fact rapid population growth has been obstructing economic growth in developing countries like India where since 1951 population has been growing at a relatively high rate. B) It is easier to reduce poverty when the economy is growing than when it is not. D) Economic growth is not only desirable but also necessary. Its main benefits include increased living standards and the ability to cope with population increases. What Are the Determinants of Economic Growth? Per capita incomes (measured in US $) have doubled in 12 years; But India has one third of all the people in the world living below the official global poverty line. Falsity of National Income Statistics - . Firstly, higher GDP implies the economy is producing more goods… E) All of the above are arguments presented in this class. Answer: D. Economic development refers to a. However, Mlthus ‘ argument came under severe attack at the hands of Karl Marx and F. Engles. Rapid economic growth is essential for the survival of the developing countries in the present competitive world. And as our travellers' comments show, their message resonates strongly with China's people, or at least those rich enough to take package tours round Europe. Select all that apply. Economic growth can also lead to problems of congestion as more people can afford to buy a car, but it is hard to increase the supply of roads to meet demand. Economic growth, cumulatively over at least a decade, has been the central factor in mortality rate decline in the US over the 20th century. Economic growth - Economic growth - The role of government: The differences in rates of growth are often attributed to two factors: government and entrepreneurship. c. These projects add to GDP growth in the short term but do nothing to advance economic development. 69. I know so many unemployed people who would love to see economic growth right now in my town. The two are not mutually exclusive. Economic growth. C) There is a direct relationship between a growing real GDP and rising pollution. Similarly, GDP fails to account for the costs of environmental damage. India has sustained rapid growth of GDP for most of the last two decades leading to rising per capita incomes and a reduction in absolute poverty. Economic growth is potentially a good thing. One of the main arguments against further growth for industrialized nations focuses on the problem of: Environmental quality. In the case of individuals this tends to have diminishing returns. These include Benefits of economic growth Increased consumption. As of 2017, the following countries have made the top ten list of fastest growing economies; interestingly, they are all developing countries. b. In general, Malthus was criticised on the following points: (1) He placed undue emphasis on the limitation of the supply of land. Which of the following is false? What Is the Relationship between Culture and Economic Development. The Facts of Economic Growth C.I. Economic growth plus changes in output distribution and economic structure. It may reflect improvement in quality of life or living standards, it may also mean more jobs and opportunities for young people. When population grows faster than GNP, the standard of living of the people does not improve. If a manufacturer finds a way to make products more widely available at a cheaper price, then the business can afford to open up new locations and provide employment. The growth our tourists were talking about was in gross domestic product (GDP), which measures the final value of all goods and services produced by an economy. ", It's a theme that recurred constantly as the group tore around Europe, with the visitors marvelling at the willingness of French workers to go on strike, and at how many years the Italians take to build a new highway. In some economies the development of transportation, power, and … b. De-growth strategy. Growth means worker burnout and frantic schedules Anti-growth b. So if a country pours resources into building pyramids, its GDP will rise sharply while they are under construction. What's so great about rapid economic growth anyway? The main argument for fast economic growth is simply that the economy can produce more, which should in turn mean the population as a whole has a higher living standard. "With a pace like that, how can their economies keep growing?" Strictly speaking, though, economists usually define growth as changes in the capacity for output, even if actual output is lower. This observation was confirmed in a major study by the Organization for Economic Co-operation and Development (OECD), The material in this section is based on Organization for Economic Co-operation and Development, The Sources of Economic Growth in OECD Countries, 2003. whose members are listed in Table 8.1 “Growing Disparities in Rates of Economic Growth.” It might bother some people in a higher class to suddenly be no different from people who used to be poorer than they were. In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. We reassess this paradox, analyzing multiple rich … The ideology of economic growth has a long history which can be traced back at least to the mid-18th century when Adam Smith published his Wealth of Nations. (iv) The objective of economic growth takes into consideration the broader long-term perspective. Ethiopia: 8.3 Percent The arguments of Jánossy fit particularly well into an augmented Solow framework, as formulated by Mankiw et al. d. Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox ABSTRACT The “Easterlin paradox” suggests that there is no link between a society’s economic development and its average level of happiness. Supporters of fast economic growth believe it helps poorer people by making goods and services more available at an increasingly affordable price. 10 Countries Seeing Economic Growth. The main common characteristics of de­veloping countries and determinants of economic growth have remained under-developed or in other words, what have been the obstacles to their development and constraints on their economic growth. Identify the following arguments about economic growth as being either anti-growth or pro-growth a. Again, this is important for China. A. a. Economic growth often brings new jobs to an area, and this benefits everyone. A first argument is based on diminishing marginal returns. ADVERTISEMENTS: Some of the most important arguments in favour of economic planning are as follows: Economic planning proved to be a grand success in many countries. In simple words, one cannot expect a higher standard of living without the country having good economic growth as it is one of the factors behind the good standard of living. In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. Rising incomes allow people to buy more education medical care, and recreation Pro-growth c. The Earth has only finite amounts of natural resources Anti-growth d. 5. Which of the following are arguments against rapid economic growth? For the princely sum of 14,500 yuan (HK$16,800), the magazine's Beijing correspondent joined 30 or so mainlanders for a gruelling 10day, five-country coach tour of Europe. As Simon Kuznets, the US economist who originally developed the idea of gross domestic product, warned: "Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long run. This growth was marked by the ability of the economy to absorb surplus agricultural labour, increase the productivity of farm labour and avoid a serious discrepancy between rural and urban incomes. GDP was developed in the US during the Great Depression, and came into its own during the second world-war as a measure of how many guns, ships and planes the US economy was able to produce. Fast economic growth means a rapid expansion in the total amount of goods and services that can be produced by an economy, whether of a particular country or the world as a whole. The relationship between population growth and growth of economic output has been studied extensively (Heady & Hodge, 2009).Many analysts believe that economic growth in high-income countries is likely to be relatively slow in coming years in part because population growth in these countries is predicted to slow considerably (Baker, Delong, & Krugman, 2005). high birth rates and rapid population growth in poor countries would divert scarce capital away from savings and investment, thereby placing a drag on economic development This view underpinned the major rise in international funding for family planning in the 1960s and 1970s, with the aim of reducing birth rates and hence rates of population growth. Which of the following arguments is not made by critics of growth policies? Several arguments suggest that low-income countries might have an advantage in achieving greater worker productivity and economic growth in the future. An increase in the quality (not the quantity of a country's computers An Increase in the number of days people have for holidays A decrease in the number of extinct species within a country Fewer trees being cut down to make furniture None of the above would be … This begs the question: what's so great about rapid growth anyway? I kind of get what the writer is saying here about the limit on what good economic growth can do for poor people. A) Generally speaking, higher levels of saving will lead to higher levels of investment and capital formation and, therefore, to greater economic growth. Inequality Higher rates of economic growth have often resulted in increased inequality because growth can benefit a … But GDP measures quantity, not quality. C) Rapid growth is not sustainable in the long term due to resource limitations. Rapid economic growth results in pollution, global warming and other environmental problems c. Rapid economic growth is unsustainable due to the earth’s finite resources 106. At first, the Soviet Union experienced rapid economic growth. It's a message China and its leaders would do well to heed. For example, raising the average education level o… But unfortunately the GDP measure by which both China's government and its travelling classes set such store is a deeply flawed measure of true economic progress. The two are not mutually exclusive. The lack of jobs in the East C. The cotton industry D. The government paid people to move into western towns. A recent edition of The South China Morning Post carried a feature expressing the point in a particularly enlightening fashion. The main criticisms are that it may be environmentally unsustainable and that it may not reduce inequalities. The following arguments can be advanced in favour of economic growth. Some forms of this argument even suggest that eventually the damage caused to these resources can itself become a limit on growth. Increases in capital goods, labor force, technology, and human capital can all contribute to economic growth. Fast economic growth has, in a sense, made them richer. True, it drives down cost, which makes things that poor people previously couldn't afford suddenly attainable. Several arguments suggest that low-income countries might have an advantage in achieving greater worker productivity and economic growth in the future. Which of the following is a measure of economic growth that is most useful for comparing living standards? Question: Which of the following arguments do proponents of growth use to support their position? That shouldn't have been too surprising given that maintaining high headline GDP growth has become an obsession with China's leaders, who tout rapid growth as the justification for their authoritarian rule. B) Growth has resulted in resource degradation and pollution. China’s rapid economic growth has led to a substantial increase in bilateral commercial ties with the United States. These factors effect the economic growth as they are the four factors of production. the Chinese guide asks. Some economists and other critics believe there is an inherent environmental limit on growth when natural resources become limited, for example if industry uses too much oil. The case against economic growth is often made using which of the following arguments? As a result, all economies should eventually converge in terms of per capita income. Because of this, economic growth tends to be viewed as a long-term change rather than simply the year-on-year variations up and down. The benefits become less dramatic as people become richer, and some surveys suggest there comes a point when increased access to goods or services does little to improve a person's well-being. I still think that economic growth overall is desirable. Under certain condi-tions moderate population growth can be benefi-cial. Ethiopia: 8.3 Percent Growth and the Environment: The Sustainability of Economic Growth. There is an argument that economic and population growth can be linked: access to better quality food, health care and labor-saving devices can increase the chances of people being healthy enough to live longer and bring up children. D) Growth provides an economic environment favorable to education and self-fulfillment. @lighth0se33 – I know what you mean. If economic growth does not at least keep pace with population increases, the individual benefits will be restricted. "If this were China, it would be done in six months," one says. That might sound like a dumb thing to ask, but the more you think about it, the more the question makes sense. T/F. The higher rate of saving makes it easier for the developing countries to break ‘the vicious circle of poverty’ and to “take off into self-sustained growth” The case against economic growth is often made using which of the following arguments? More jobs for people who want one. Summarize the arguments for slowing down the rapid growth of GDP? The main causes of Economic growth are to do with land, labour, capital and entrepreneurship. Following the initial work of Barro (1991), hundreds of separate studies – typically cross-sectional regressions – pursued the question of Likewise, this may also mean a lot of negative things within the country. But considering that pyramids, once complete, add nothing to the economy (except maybe generating tourist revenues four millennia later), it is difficult to claim that their construction furthers economic progress. Identify following arguments about economic growth as being either anti-growth or pro-growth. 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