Theories of Economic Development

Show Answers

Correct options are highlighted when revealed.

1.What is the fundamental distinction between capitalism and socialism?

Capitalism takes advantage of laborers, whereas socialism takes advantage of property holders.Capitalism depends on market forces for economic decisions, while socialism employs centralized planning.Capitalism expands through rent-seeking activities, whereas socialism grows under government control.Capitalism bases choices on consumer preferences, while socialism focuses on producer interests.

2.According to Baran, what factors contribute to the underdevelopment of Asia, Africa, and Latin America?

Foreign monopolistic enterprisesConservative ruling groupsFragile local middle classAll of these factors combined

3.What does the acronym OECD represent?

Organization for Economic Cooperation and DevelopmentOil Exporting Countries DevelopmentOrganization for Environmental Cooperative DepartmentOpen Economies Caucus on Development

4.According to Rosenstein-Rodan, where does a significant indivisibility primarily exist?

5.What does the Vicious Circle theory suggest about poverty?

A nation remains poor due to low productivity despite high levels of savings.Wealthier countries tend to reduce their savings rates over time.Poverty sustains itself through interconnected cycles affecting both supply and demand.Less Developed Countries (LDCs) have a large market size.

6.Which factors contributed to the decline of feudalism?

Only the movement of serfs to urban areas and factory competitionFactory competition with handicrafts and manorial production, along with expanded trade and new international marketsThe migration of serfs to towns, factory competition, and increased trade and discoveryThe emergence of business corporations alone

7.Which of the following concepts were supported by Adam Smith?

Only I and IIOnly II and IIIOnly I, II, and IIIAll of the following: I, II, III, and IV

8.Which of the following best describes the characteristics of a theory?

It is a structured explanation of the connections between economic variables.It clarifies causal links between variables and their effects.It forms the foundation for developing economic policies.It accounts for every factor that impacts economic growth.None of the above.

9.According to the Harrod-Domar growth model, economic growth depends on which of the following relationships?

positively influenced by savings and negatively influenced by the capital-output ratiopositively influenced by the capital-output ratio and negatively influenced by savingsnegatively influenced by both savings and the capital-output ratiopositively influenced by both savings and the capital-output rationo relationship with savings or the capital-output ratio

10.Baran's Neo-Marxist theory has been challenged for overlooking the likelihood that power often is what?

rooted in a coalition between landowners and rural farmersfounded on a partnership between peasants and foreign capitalistsshifted from one ruling elite to another during revolutionsoriginated from internal groups opposing nationalism