Flashcards
Strategies influencing growth and development
Flashcards do conjunto (9)
- 1trade libTrade liberalisation
Free trade is the act of trading between nations without protectionist
barriers, such as tariffs, quotas or regulations. World GDP can be increased
using free trade, since output increases when countries specialise.
Therefore, living standards might increase and there could be more
economic growth - 2gov subsidiesGovernment subsidies could distort price signals by distorting the free
market mechanism. A free market economist would argue that this could
lead to government failure.
There could be an inefficient allocation of
resources because the market mechanism is not able to act freely. It also
has a negative effect on the government budget and could cause excessive
debts. - 3floating XRThe value of the exchange rate in a floating system is determined by the
forces of supply and demand. The government does not have to worry
about gold and foreign currency reserves.
However, the currency will be volatile and this will make it difficult for
importers and exporters. - 4privatisationThis means that assets are transferred from the public sector to the
private sector. The government sells a firm so that it is no longer in their
control. Free market economists will argue that the private sector gives
firms incentives to operate efficiently, which increases economic welfare. - 5human capital (interventionist strategy ):Development of human capital
By developing human capital, the skills base in the economy would
improve. This would improve productivity and allow more advanced
technology to be used, since workers will have the necessary skills.
Better education also improves quality of life. - 6protectionismProtectionism can help reduce a trade deficit. This is because they will
be importing less due to tariffs and quotas on imports. This will help to
increase AD. It can protect infant industries and allow them to develop.
It can create jobs in the short run - 7managed exchange rateIt provides more stability than a floating
system but requires less intervention - 8the role of international institutions and non-government organisations (NGOs)World Bank
The World Bank can loan funds to member countries, and its aim is to promote progress by raising productivity and reducing poverty.
International Monetary Fund (IMF)
The IMF aims to promote monetary cooperation between nations, and
monetary problems can be consulted in the institution
ngo's: They are
voluntary groups which aim to raise the voices of ordinary citizens - 9—
Informações
- Descrição
- A level Economics (Theme 4 A Global Perspective) FlashCards sobre Strategies influencing growth and development, criado por Daniel Nnajiuba em 09-10-2020.
- Criado por
- Daniel Nnajiuba
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