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Creado por Rachel Lee
hace más de 10 años
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ECONOMIC DEVELOPMENT
(Free) Market
Govenrment
The majority of MDCs and LDCs are mixed economy.
At micro level,we need to look into MARKET FAILURE, a FREE MARKET needs GOVERNMENT INTERVENTION:- Externalities (Merit/Demerit Goods and Open Access Resources)- Public Goods- Abuse of monopoly powerAt a macro level,in a business cycle, a FREE MARKET needs GOVERNMENT INTERVENTION to impose stabilization policies, which help to achieve MACROECONOMIC OBJECTIVES:- Price Stability- Full Employment- External Balance- Price Equality (market force caused more disparity)- Economic Growth (market force - to move away from a command economy)
In a FREE MARKET, there is the need for RESOURCE ALLOCATION - by the use of the price mechanism:"Those who can pay the highest price will get the resources"- The rich will get richer (capitalist) --> Price Inequality
Economics12 Dec, 2013
With GOVERNMENT INTERVENTION, there is the need to decide on the focus on either:- Rural sector- Urban sector
(Some questions will ask for the...FOREIGN FACTORS)Integration of different sections, for example between:- Foreign Trade- Foreign Direct Investment- Foreign Aid- Foreign LoansThey may ask "to what extent...". Therefore, you should be able to compare and contrast, and casting a judgment by considering both positives and negatives.There may also be the need to know the use of:Export Promotion --> Import Substitution --> Export Promotion(Commodities) ..........(Infant Industries)..........(Manufacturing Exports)
*"GROWTH" - main focus should be on Economic GROWTH
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