Economic Growth and Development: NBSE Class 12 Economics

Economic Growth and Development
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Here, you will find summaries, questions, answers, textbook solutions, pdf, extras etc. of (Nagaland Board) NBSE Class 12 (Arts/Commerce) Economics Chapter 10: Economic Growth and Development. These solutions, however, should be only treated as references and can be modified/changed.

Introduction

The chapter explains the difference between the concepts of economic growth and economic development. Economic growth refers to a sustained increase in the real output and income of a country over a long period of time. It involves a quantitative expansion in production. Economic development is a broader concept that includes economic growth along with improvements in economic welfare reflected in changes in technique of production, institutions, reduction in inequality, poverty and unemployment.

While economic growth deals with increase in output and income, economic development includes changes in composition of output, priorities, institutions etc. Economic growth can occur spontaneously based on greater utilization of resources. But economic development requires deliberate efforts in form of planned changes. Economic development places emphasis on equitable distribution and structural changes in the economy. It also focuses on the problems of developing nations.

The chapter highlights that economic growth is a narrower concept related to rise in real national and per capita income. Economic development encompasses economic, social and institutional reforms along with growth. The key parameters of economic development are growth in incomes, changes in sectoral shares, improvement in quality of life, reduction in poverty, inequality, unemployment etc. Overall, economic development is a multidimensional process involving both quantitative and qualitative improvements in the economy.

Textual questions and answers

A. Very short-answer questions (answer in one word/one sentence)

1. What is growth?

Answer: Long-term increase in income or output.

2. What is development?

Answer: Reduction in inequality, poverty, illiteracy and disease along with increase in real per capita income.

3. What is per capita income?

Answer: Per capita income is the average income earned per person in a country in a specific time period.

4. What is GER?

Answer: Gross enrolment ratio. It is the no of students enrolled for education against the total population

B. Short-answer questions-I (answer in 30-50 words)

1. Define growth.

Answer: Economic growth refers to long-term increase in income or output.

2. What does Prof. Salvatore says about growth?

Answer: According to Prof. Salvatore, “Economic growth has been defined as the process whereby a country’s real per capita gross national product (GNP) or income increases over a sustained period of time through continuing increase in per capital productivity.”

3. How is economic development defined by Paul Albert?

Answer: According to Paul Albert , “Economic development is the exploitation of all productive resources by a country in order to expand real income.”

4. Give any one point to differentiate between growth and development.

Answer: Economic growth is quantitative while economic development is qualitative.

C. Short-answer questions-II (answer in 60-80 words)

1. Give two main points as to how economic growth is different from economic development.

Answer: Two main differences between economic growth and development are:

  • Economic growth is single dimensional relating to increase in output and income only while economic development is multi-dimensional relating to changes in economic, social and political structure along with increase in income.
  • Economic growth is a spontaneous and steady process while economic development involves deliberate efforts for structural and institutional changes in the economy.

2. What is Gross enrolment ratio?

Answer: Gross enrolment ratio (GER) refers to the total number of students enrolled in a given level of education, regardless of age, expressed as a percentage of the official school-age population corresponding to the same level of education. It indicates the capacity of the education system to enroll students of a particular age group.

D. Long-answer questions-I (answer in 90-120 words)

1. “There is no difference between economic growth and economic development.” Explain how much this is true.

Answer: This statement is not completely true. While economic growth and economic development are closely related concepts, there are some key differences between the two:

  • Economic growth refers only to quantitative increase in output and income. Economic development involves both quantitative increase in output and qualitative changes in economic structure and institutions.
  • Economic growth is a narrower concept concerned with increase in real national and per capita income. Economic development has a broader perspective involving economic, social and institutional reforms.
  • Economic growth can take place spontaneously in an economy due to greater utilization of resources. Economic development requires deliberate efforts and policy initiatives.
  • Economic development is not possible without economic growth. However, a country may achieve growth without development by simply exploiting its resources without making structural changes.

Thus, while economic growth is a part of the process of economic development, the concepts are not identical. There are important distinctions in terms of focus, scope and drivers of the two processes.

2. What are the propositions of human development?

Answer: Human development rests on three propositions:

  • Enhancing human capabilities such as improved health, education, skills is an end in itself as it leads to expanded choices and freedoms.
  • Income growth is not an end in itself but an instrument for expanding human choices.
  • Economic growth and human development reinforce each other in the long run. Investments in health and education can help achieve economic growth.
E. Long-answer questions-II (answer in 130-200 words)

1. How is economic growth different from economic development?

Answer: The major differences between economic growth and economic development are:

  • Economic growth is a narrower concept related to rise in real national income and per capita income of a country. Economic development has a wider perspective involving economic, social and institutional reforms along with growth.
  • Economic growth deals with increase in output and income. Economic development includes changes in technique of production, social and institutional changes along with growth.
  • Economic growth can be spontaneous based on greater utilization of resources. Economic development requires deliberate efforts in form of planned changes and reforms.
  • Economic growth is mainly quantitative in nature measured in terms of rise in real GDP and per capita income. Economic development involves both quantitative and qualitative improvements in economy.
  • Economic development cannot be achieved without economic growth. However, a country may have growth without development in absence of equitable distribution and structural changes.
  • The concept of economic development is more relevant for developing nations engaged in institutional and structural reforms. Economic growth relates to a steady rise in real output in advanced countries.

2. Write a short note on the parameters of economic development.

Answer: The key parameters that are used to measure the extent of economic development in a country are growth of national and per capita income, changes in sectoral composition of output, improvement in quality of life, reduction in inequality, poverty alleviation, employment generation, regional balance and environmental sustainability.

Growth of national and per capita income indicates the quantitative expansion in production of goods and services in the economy. As an economy develops, the contribution of agriculture to national income declines while that of industry and services increases. This represents a structural transformation. Improvement in quality of life is gauged through literacy rates, life expectancy, child mortality rates, etc. that reflect the well-being of the population. Equitable distribution of income and wealth demonstrates reduction in inequality. Decline in absolute poverty levels shows poverty alleviation. Productive employment opportunities for the growing labor force represent employment generation. Balanced development of different regions, with focus on backward areas, indicates regional balance. Lastly, economic progress without damage to the environment indicates environmental sustainability.

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