1. Explain Economic Development?

Economic development refers to the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area. It includes quantitative and qualitative changes in the economy. It is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP.

2. Explain the two factors on which economic development depends?

Economic development depends on 

(a) Economic factors and

(b) Non-economic factors.

(a)    Economic factors - Economic factors are all the units required in the economic activity of production of goods and services.

(b)    Non-economic factors - Non-economic factors are the social and political environment that may not directly affect the level of national income and output.

3. What are the difference between growth and development?

Economic growth refers to increase in a country’s real output of goods and services. It is narrow concept and is applicable to developed economies. It is a process that occurs in a dynamic economy and which comes within a particular time period, Development, on the other hand, is a process whereby country’s real national income increases over a long period. It is more extensive and is applicable to developing economies. It occurs in a static economy due to structural and technological changes in the economy.

4. Why us Indian economy considered a developing economy?

Following characteristics of Indian economy make it a developing economy.

a.    Low percapita income’

b.    Majority of working population engaged in agriculture & allied activity.

c.    Economy with high birth rate coupled with falling death rate.

d.    Underdeveloped and chronic unemployment

e.    Maldistribution of wealth

f.    Poor quality of human resource

g.    Low level of technology

h.    Low level of living

5.    What are the indicators of low level of living in Indian economy?

a.    Malnutrition

b.    Lack of safe drinking water

c.    Poor housing

d.    High infant mortality

e.    High illiteracy

f.    Poor education, medical and health facility

6. Explain Human Development Index?

The Human Development Index (HDI) is a composite statistic of life expectancy, education, and income indices to rank countries into four tiers of human development. It was created by economist Mahbub ul Haq. It refers to basic dimensions of human development

a.    Longevity

b.    Educational attainment index

c.    Decent standard of living

7. Explain infant mortality rate?

Death of a child immediately after birth is termed as infant mortality rate. In India infant mortality rate is as high as 123 per 1000 of live births in 1990-91; which dropped to 93 in 2001-02.India experience a rural-urban gap with regards to infant mortality rate.

8. Explain capital formation?

The process of adding to net physical capital stock of an economy as an attempt to achieve greater total output is called capital formation. In other words, it is the net addition to capital resources during a year.

9. What is vicious circle of underdevelopment?

A pattern of low income and low economic growth, which tends to perpetuate itself, is known as vicious circle of underdevelopment. Since current consumption demands of poor nations are large in proportion to available income, the savings and investment rates of these nations are low. In turn, the low investment rate retards future growth, causing poor nations to remain
poor with unutilized resources.

10. Describe Balance of Payment?

It is the transactions of the residents of a country with the rest of the world. The two main accounts of BoP are the current account and capital account. It is prepared on the basis of double entry system. The statement as a whole would fully balance without any surplus or deficit.