Daniel B.

Peña Memorial College Foundation, Inc

Ziga Avenue, Tabaco City

Output in Economic Development (CAED 7)

( MWF / 8-9am )

Jhonrey D. Bragais
BS Accountancy-II

Paulo C. Mojos
Professor
Material 1: Lesson 1 and 2

Lesson 1 Questions

1. Is economic growth possible without economic development? (answer not less than 5
sentences)

2. Is economic development possible without economic growth? (answer not less than 5
sentences)

3. Are economic welfare and political freedom complementary goals or are they competing
goals? Justify your answer. (answer not less than 10 sentences)

4. Choose a country, for example, your own or one you know well. What have been the
major economic costs and benefits of economic growth in this country? (answer not less
than 5 sentences)

Answer

1. Economic growth is possible without economic development because economic growth

is the increase in the outcome while the economic development improvement in the health,
education etc. Economic growth deals with workforce or the improvement of workforce. It
also deals with the improvement technology and other machineries. Economic development
deals with the standards of education provided, the infrastructures improved. It deals with
the income of every work individuals that increases. And the life expectancy of the people is
increased.

2. In my opinion, economic development is not possible without economic growth.

Economic development is to have a better homes, good health, clean environment,
education and to do important thing in our life. In order to achieve that, we need to have an
economic growth to increase. All the products and materials used must provide and
produce. And in order to produce them we need an efficient resources used for production.
We cannot achieve them if there is lack of resources and products to provide the needs of
the people.

3.

4. The major economic cost in the Philippines is the outbreak of the Covid-19. It has a great
impact in the economic loses in the country. It disrupts the health, the education, the
production and others that give benefit the economy. The benefits of economic growth in
the Philippines are to have an economic development. It improves the education, the
health, improves infrastructures and the environment. Some countries have invested in the
Philippines for the disaster and humanitarian emergencies. It reduces the poverty
population because the country provides the needs of the people.
Lesson 2 Questions

1. What are the characteristics of modern economic growth? (answer not less than 5
sentences)

2. Why has modern economic growth largely confined to the West (Western Europe, the
United States, and Canada) before the 20th century? (answer not less than 10 sentences)

3. Indicate in some detail how sustained economic growth in North America has changed
the material level of living from about 100 to 150 years ago to today. (answer not less than
10 sentences)

Answers

1. The characteristics of the modern economic growth are highly rates of growth of the
products. There must be a highly rates in the productivity and the structural transformation
of the economy. It must have the long run capacity to produce and supply goods for a large
population. There must have technological advance in the machineries for efficient and
good quality production. There must have the capability to sustain the economic growth to
provide for the development of the economy.

2. Modern economic growth largely confined to the West (Western Europe, the United
States, and Canada) before the 20th century because they witnessed the rise of strong
national states that created the conditions essential for rapid and cumulative growth under
capitalism. They established domestic market trade barriers, monetary system, policy for
defense against the violation and attack in transportation and communication facility. They
was influence by church to Enlightenment, a period of great intellectual activity in 17th- and
18th-century Europe that led to the discoveries. These discoveries was applied in
agriculture, industry, trade, and transport and resulted in extended markets, increased
efficiency of large-scale production, and enhanced profits associated with capital
concentration. Early capitalism of the 16th and 17th centuries, the great flow of gold and
silver from the Americas to Europe inflated prices and profits and speeded up this
accumulation. Intellectual and economic changes led to political revolutions in England,
Holland, and France in the 17th and 18th centuries that reduced the power of the church
and landed aristocracy. In that revolution, economic modernization was evolved. Modern
capitalism is distinguished from earlier economic systems by a prodigious rate of capital
accumulation. It cause great flow of gold and silver from the Americas to Europe inflated
prices and profits and speeded up this accumulation. Redistribution of incomes, wages,
earnings invest a new productive enterprises
Material 2: Lesson 3 and Lesson 4

Lesson 3 Questions

1. What are some common characteristics of LDCs? Which of these characteristics are
causes and which accompaniments of underdevelopment? (answer not less than 10
sentences)

2. How might today’s LDCs differ from those of the 1950s? (answer not less than 5
sentences)

3. What is a dual economy? Are all LDCs characterized by economic dualism? (answer not
less than 5 sentences)

4. What are the major characteristics of economic and political institutions in low income
economies? (answer not less than 5 sentences)

5. What are the major institutional changes that take place with economic development?
Are these institutional changes causes or mere correlations of growth? Or is growth a
cause of institutional change? (answer not less than 15 sentences)

Answer

1. Some common characteristics of LDCs have low-income, higher rates of population, and
higher level of unemployment. The causes of this are the low levels of productivity which
cannot improve the economic growth and development. The higher rates of population
cause for a country not to develop since there’s no improvement in the economy. In some
other countries they generally have raised real incomes, reduced poverty, increased life
expectancy, lowered infant mortality. They also improved literacy and educational access,
narrowed gender disparities, and decelerated population growth. Having a shortage in
capital widespread poverty hence the population increase. The people have a high
consumption and it leads to low growth. The accompaniments of underdevelopment are
having low productivity and low employment. They are low in manufacturing an production
of resources. They are in dependence of agriculture and the exports of products in other
countries. They are out of technological machineries for their own production and cannot
provide sufficient food and health.

2. LDCs now are very different from those of 1950s because now have a little bit improved
in terms of health, foods and education. LDCs now can generate income and education that
they can control population and reduced poverty. They can increase life expectancy and
create strategy for progress and development. They have now forming an increase in
production and employment and promote technological advancement. They create
economic policies and adjustments to provide people needs.
3. Dual economy is the presence to two economic sector in a particular country. It was
divided into different level development particularly in the modern and traditional economic
sectors. It usually happens in LDCs wherein the two separate sector provides the needs of
one another. Like for example, the agricultural sector provides resources to the
manufacturing sector. On the other in modern plantation or the commercial agriculture
operates to the traditional planting system.

4. The major characteristics of economic and political institutions are to have an

economically develop and well progress country. It promotes a well-established democracy.
To have an interaction between to economic activity to generates resources to sustain the
political activity. Promoting those institutions such as the property rights, macroeconomic
and so on are the major source of economic growth. A political institution provides power in
determining the economic growth.

Lesson 4 Questions

1. Is Ricardian classical economic theory applicable to LDCs? Explain. (answer not less
than 5 sentences)

2. How might Marxian economic analysis threaten political elites in socialist countries?
(answer not less than 5 sentences)

3. What are some potential LDCs vicious circles? How plausible are these as barriers to
development? (answer not less than 10 sentences)

4. How important are supply and demand indivisibilities in influencing LDC investment
strategies? (answer not less than 5 sentences)

5. Choose a country or world region. Which economic development theory best explains
development in that country or region? (answer not less than 10 sentences)

Answer

1. Ricardian classical theory is applicable to LDCs because it deals with possibility to

sustained economic growth. In continuing little progress and growth can limit the scarcity. It
has advantage in producing goods in lower relative opportunity cost. It explains the
advantages of engaging in trade with an efficient production of single goods to other
countries. It describes economic reality that a country can gain in trade with a limit
production for their technological progress.

2. Marx’s reserve army of the unemployed, a cheap labor source that expands and
contracts with the boom and bust of business cycles. Furthermore, with the growth of
monopoly, many small businesspeople, artisans, and farmers become property less
workers who no longer have control over their workplaces. Marxism interpreted and
provided its intellectual and organizational leadership. He introduced socialism in Western
Europe through parliamentary democracy rather than violent revolution. Marx opposed the
prevailing philosophy and political economy, especially the views of utopian socialists and
classical economists.

3. Some potential LDCs vicious circles are the supply side, demand sides. Supply side has
low in income and the consumption cannot diverted to saving for capital formation. It has
lack of capital and low in productivity that cause low in income. Country cannot develop
because of poor to save and invest. They have low rate in production which cannot provide
capital to sustain the needs of people. The demand side which low in income and the
market size are too small. They cannot encourage potential investors. If they lack in
investments will cause to low in productivity. They income will also remain in low rate. If
they provide good investments, they can decrease the poverty of the country.

4. Supply and demand are very important especially in LDCs for influencing investors
because it have a major role in economic activity. It provides good quality services to every
consumer. It encourages the customers to have the willingness to purchase. It has a

relationship to the economists and companies in making strategic product decision. The
consumers always seek for their satisfaction. And also in market economy, the supply and
demand are the best determinants in economic growth.

5. Rostow’s Stages of Economic Growth best describes the economic development of the
country the Philippines. Increased transport investment to enlarge the market and
production specialization. It has a revolution in agriculture, so that a growing urban
population can be fed. It describes expansion of imports, including capital, financed
perhaps by exporting some natural resources. It including increased capital formation
requires political elite interested in economic development. It create barriers to steady
growth are finally overcome, while forces making for widespread economic progress
dominate the society, so that growth becomes the normal condition. The growth of a
leading manufacturing sector spreads to its input suppliers expanding to meet its increased
demand and to its buyers benefiting from its larger output. It drives to maturity,
selfsustained, increase skill and provide economic security.
Material 3 – Lesson 5

Questions

1. What is meant by absolute poverty? To what extent is poverty culturally relative?

(answer not less than 5 sentences)

2. What are the various dimensions of poverty other than low incomes? (answer not less
than 5 sentences)

3. Is poverty synonymous with low well-being? Explain. (answer not less than 5 sentences)

4. What conditions do you think are necessary for economic inequalities to contribute to war
and political violence? (answer not less than 5 sentences)

5. Discuss why LDC women have higher poverty rates than men. What LDC policies would
reduce female poverty rates? (answer not less than 5 sentences)

Answer

1. Absolute poverty means poverty identified using a universal baseline without any
reference to the income or access to goods of other citizens. Thus, the failure to reach this
benchmark implies that the individual is weak. In the sense of extreme poverty in
developing countries, absolute poverty is usually addressed, while absolute and extreme
poverty are not interchangeable terms. It is possible to describe total poverty as the
condition in which a subject lacks the means to fulfill his or her basic needs. These basic
needs are frequently identified in international programs to reduce poverty, and typically
include food, water, shelter, basic education, and basic medical care. Typically, extreme
poverty is defined as a state in which a person lacks access to all or several of the goods
necessary to meet these fundamental needs.

2. The other various dimensions of poverty aside from low income are the limited education,
unemployment, lack of insurance and concentrated spatial poverty. Limited education
affects the learning and opportunity to find better jobs. Lack of education cause of
unemployment contributes to increase poverty. Lack of insurance also contributes for
increasing poverty wherein those poor people cannot assure financial in case of
emergency. They are always depending on the help of government programs.

3. As a matter of fact, the conceptions of poverty and well-being are tightly intertwined. The
definition of poverty is related to a situation in which individuals have poor healthcare.
Alternative words, including lack of well-being or even ill-being, are often used. The relation
between the conceptions of suffering and well-being suggests the conceptualisation of
Poverty depends on our awareness of well-being. It is the understanding of poverty as a
situation in which persons suffer low well-being, which means that poverty is a very
attractive term that calls for urgent action to minimize or at least alleviate its effects on
wellbeing. It is not something human beings enjoy suffering low well-being; therefore, there
is merit in the well-being of individuals, and this translates into a deep urge in the world to
minimize poverty.

4. In the midst of violent war, the role of economic injustice in economic development and
the political economy has remained elusive. Another is that the way we perceive and
evaluate inequality, as well as flaws in our abilities to quantify it, are widespread issues.
This economic disparity is highly necessary for civil war to be clarified, but only to the
degree that economic inequality is considered inseparable from socioeconomic, political,
cultural and historical inequality. Focusing on the diversity of forms through which
differences are handled and the forms in which such progressive improvements may be
done inside systems of permanent categorical distinction is necessary. The transmitting
processes that cause a relatively stable, permanent injustice to transform into a violent
conflict are also important to consider.

5. One of the world's oldest and most prevalent types of inequality is gender inequality. It
ignores the voices of women, devalues their jobs and makes the status of women inferior to
that of men, from the household to the national and global level. Despite some significant
success in improving this situation in recent years, women have not attained economic
equality with men in any region, and women are much more likely to live in poverty than
men. Socially, economically and legally, the chances they demand are denied to girls and
women living in extreme poverty. Right now, in the world's poorest nations, women and
girls are less able to bank the income they make, own the property they work, or get the
education they need to succeed. None of us is equal until all of us are equal, and until there
is justice for women and girls everywhere, we won't stop protesting.
Material 4 – Lesson 6

Questions

1. In what ways does agriculture contribute to economic growth? (answer not less than 5
sentences)

2. Why is agricultural productivity in DCs so much higher in LDCs? (answer not less than 5
sentences)

3. How does a peasant economy differ from that of a commercial farm economy? (answer
not less than 5 sentences)

4. What factors contribute to the high incidence of rural poverty in LDCs? (answer not less
than 5 sentences)

5. What factors contribute to the high incidence of rural poverty among single female heads
of households? (answer not less than 5 sentences)

6. What policies are most effective in increasing rural income and reducing rural poverty?
What strategies are needed to prevent rural development policies from increasing rural
poverty? (answer not less than 10 sentences)

Answer

1.Through domestic and export surpluses that can be used for industrial development
through taxes, foreign exchange abundance, capital and labor outflows, and declining farm
prices, agriculture contributes to economic growth. The growth of farm income raises the
demand for consumer goods as agricultural products and factor markets become better
integrated through relations with the rest of the economy. In the early stages of
modernization, some LDCs are squeezing agriculture, aiming to miss a stage in the
transition of the economy, a tactic almost doomed to failure. This is also why technological
and agrarian transformations still go together, and why there is no industrial growth in
economies in which agriculture is static. Today, if no food is produced by the capitalist
industry, its growth increases food demand, boosts food costs for capitalist goods, and
therefore decreases income. This is one of the ways in which industrialization relies on
agricultural improvement; manufacturing an increasing amount of output is not profitable
unless agricultural production is equally increasing.

2. In the LDC economies, agriculture is the pillar, underpinning their food security, their
earnings from exports and their rural production. Yet, their, their, Agricultural production has
lagged behind in the domestic and export markets, with per-caput production growth falling
in the 1990s. The slow Rise in demand and sharp annual performance fluctuations have
persisted, chronic issues for the LDCs, which are the major causes of their Continuing
hunger and growing food shortages. In order for developing countries to satisfy their
obligations to less developed countries, market access in the former would need to be
encouraged in order to promote growth in the latter. Secondly, in order to address the low
income and social challenges of agriculture, a more favourable supply / demand equilibrium
for agricultural goods should be isolated from price policies.

3. Peasant economics is an economic field in which a wide range of economic approaches,

from the Neoclassical to the Marxist, are used to analyse the peasantry's political economy.
The distinguishing characteristic of peasants is that they are usually considered to be only
moderately incorporated into the commercial system, a system that usually has multiple
flawed, incomplete or absent markets in communities with a large peasant population.
Commercial farm economy, study of the allocation, delivery and utilization of the capital
used by agriculture, along with the goods produced. Agricultural economics plays a role in
the economics of production, as one of the causes of technical and commercial growth is a
continuous degree of farm surplus. In general, one may assume that real wages are low
because a significant fraction of the population of a country relies on agriculture for its
subsistence.

4. A significant feature of overall disparity in developed countries is the prevalence of

inequalities in the rural market. The economic dualism that has been identified restricts the
development opportunities that benefit the weak. Rural areas tend to lack adequate roads
to improve access to supplies and markets for agriculture. Bad connectivity impedes
communication, leading to social alienation among the rural poor, many of whom have
restricted access to news and media outlets. Such separation hinders interaction with urban
society and developed economies, which could contribute to higher economic stability and
growth.

5. Women, who are typically the winners of bread in female-headed households, face
gender inequality in terms of schooling, jobs, benefits, and economic prospects, promoting
targeted poverty reduction for female-headed households. On the other hand, there are
logistical difficulties relating to the identity of the real household head and the female head.
Poverty is not necessarily synonymous with leadership. Women-headed households are
widely known as the 'poorest of the poor' worldwide, especially in rural areas. Their
prevalence in low-income communities is not only believed to be higher, but female
leadership itself is seen to intensify poverty.

6. Create a government program for the rural area that can help the rural poor. This policy
responds to developments in the following areas: the global environment; the client
countries; and the Bank, beginning with the implementation of regional action plans and
comprehensive regional consultations. The core features of this approach are: emphasizing
on the rural poor; fostering broad-based economic growth; approaching rural areas in a
holistic manner; building partnerships between all stakeholders; and approaching the effect
on client countries of global innovations. In this power, support for improved agriculture and
economic policies, by increased agitation for trade liberalization can be accomplished.
Promote policies to reduce poverty like agrarian reform and redistribution securing property
and rights and increase capital to sustain needs of the rural poor. Provide power sources
and technology to promote development and sees lessen poverty. Provide service
extension that can help people in everyday lives.
Material 5 – Lesson 7

Questions

1. What factors have contributed to a rising LDC growth rate since 1950 compared to
previous periods of the same length?

2. Why would population continue to grow for several decades after it reaches replacement-
level fertility?

3. What are some of the costs of a high fertility rate and rapid population growth?

4. Discuss and evaluate views of economic optimists such as Simon who argue that LDC
governments do not need a policy to limit population growth.

5. Which policies are more important for reducing fertility: family planning programs OR
socioeconomic development? Explain your answer.

Answers

1. Due to changes in health, diet, pharmacy, hygiene, transport, connectivity, and

development, death rates plunged during much of the time after 1950, while birth rates,
sponsored by ideals and philosophies and less affected by economic modernization,
remained large.

While population growth from 1950 to 2000 has been rapid compared to other 50-year
periods, within this half century population growth has decelerated decade by decade since
its peak in 1960. Birth rates have declined from more effective contraceptives and more
vigorous family planning programs but also the increased cost of children, enhanced
mobility, higher aspirations, and changing values and social structure associated with
urbanization, education, and economic development.

2. Population continue to grow for several decades after it reaches replacement-level

fertility because of the young age structure in LDCs, their populations will continue to grow
even after the average woman of childbearing age bears only a daughter to replace herself.

3. Any of the major costs of high fertility and increasing population development include
declining returns to natural capital, accelerated urbanization and congestion, rapid labor
force expansion, rising unemployment and high dependency burdens.

4. Simon argues that the level of technology is enhanced by population. More people
increase the stock of knowledge through additional learning gains compounded by greater
competition and total demand spurring "necessity as the mother for invention.” Division of
labor and economies of large-scale production increase as markets expand. As population
size rises, both the supply of and demand for inventions increase, thereby increasing
productivity and economic growth. Because population growth spurs economic growth,
Simon requires no government interference and is consistent with a laissez-faire population
policy. Simon’s assumption that technological progress arises without cost contradicts the
second law of thermodynamics, which states that the world is a closed system with ever-
increasing entropy or unavailable energy. Moreover, Simon’s model yields the intended
results because they are built into the assumptions. Simon’s premise is that “the level of
technology that is combined with labor and capital in the production function must be
influenced by population directly or indirectly.”

5. Only if the social and economic conditions of the population (income sharing, welfare,
nutrition, schooling, women's rights, and community development) are such that decreased
fertility tends to be desirable would birth control devices provided by family planning
organizations be adopted. Both family planning services and initiatives encouraging social
growth and greater income mobility are required by LDCs who are serious about
decreasing fertility.
Material 6 – Lesson 8

Questions

1. What supply and demand factors for industrial labor explain rising LDC unemployment
rates?

2. How widespread is disguised unemployment in LDCs?

3. Explain rural-urban migration in LDCs.

4. What factors contribute to high urban unemployment in LDCs?

5. Explain why rural-urban migration persists in the face of substantial urban

unemployment.

6. What causes unemployment among the educated in LDCs? What educational policies
will reduce this unemployment?

7. Provide a rough estimate of unemployed individuals in your community. List down some
policies you would like to suggest to the barangay officials in order to address
unemployment. Support your suggestions with at least two sentences.

Answers

1. Factors linked to supply include population development and rural-urban migration.

Production is extracted from the demand for industrial output (and the development of it).
Both the supply and demand sides are affected by market distortions and the essence of
technology (how appropriate technology is). Rising industrial unemployment is caused by
higher growth of the labour market than job prospects (or supply growing faster than
demand).

2. Disguised unemployment is not very likely, either in manufacturing or in agriculture, if it is

defined as a zero revenue product from a marginal hour of work. Certainly, as Viner argues,
extensive labor-intensive farm work is virtually always feasible. With decreased labour,
observational studies showing that LDC production in agriculture remained constant or
improved lacked proof that capital development and technology levels remained constant.
Obviously, the marginal efficiency of labor will be favorable as resources and technology
improve, even if production expands with less energy.

3. The easiest theory, by Arthur Lewis, is that as incomes there outweigh rural wages,
people move to urban areas. The Harris-Todaro model suggests that migrants make
migration decisions on the basis of wages and the possibility of jobs, assuming that
migrants are more open to urban-rural disparities in anticipated rather than real earnings.
4. Urban unemployment in LDCs is leading to both rural-urban migration and fast
population growth. Due to the sluggish reaction of production to demand rises, labor supply
responses to new job opportunities, limited space for adjustments in fiscal policy and
potential tradeoffs between employment and output arising from inadequate technologies,
Keynesian unemployment from deficient aggregate demand is not relevant in LDCs.

5. The Harris-Todaro model shows that migrants to urban areas make wage-based
migration choices and the likelihood that they will be able to find jobs. Harris and Todaro
believe that migrants react to urban-rural disparities in projected earnings rather than real
earnings (wage times the likelihood of employment). Although it is more complex than the
straightforward description of relative income, Harris and Todaro's model fails to integrate
the urban informal sector into their study.

6. Unemployment in LDC trained people happens because the educated have

unreasonable perceptions of earnings or work desires or because the change of salaries is
sluggish or perverse. In order to strike a balance between LDC educational performance
and labour demands, policies should concentrate on changing the educational system.
Strategies include: decreasing subsidies and rising the school budget for secondary and
higher education; increasing the versatility of wage rates to alter supply and demand;
reducing inequality and discrimination in education and jobs; and altering the rationing of
employment by qualification of education.

7. I think about 40% of individuals in our barangay who are currently unemployed. If I
suggest some policies it would be each household should have one member who is
employed. The barangay should provide services that can help poverty and scarcity.
Laborers should receive payment and it lessens the hunger of some household family.
Material 7 – Lesson 9

Questions

Write in the blank space provided the word that will complete the analogy. Choose the word
from the parenthesis below.

(globalized taste, homogenization, APEC, elimination of trade barrier, WTO, RA 8479, trade
barriers, hegemonization, IMF, oil industry, raising of trade barriers, liberalization)

Answers

1. Globalization: free trade; Protectionism: trade barriers

2. Global organization: WTO; Regional Organization:

3. Southeast Asia: ASEAN; Asia-Pacific Region: IMF

4. Deregulation: removing control; Liberalization: elimination of trade barrier

5. Privatization: MERALCO; Deregulation: APEC

6. Tax on imports: tariff; Limit on quantities traded: liberalization

7. Political: hegemonization; Cultural: homogenization

8. Quota: restriction; Tariff: raising of trade barriers

C. Answer the following globalization-related questions.

1. Do you believe that Philippine industries could manage well on their own without
government protection? Support your answer.

2. Do you think globalization is a boon to the Philippine economy? Explain.

3. How does globalization affect the Philippine economy?

Answer

1. In my opinion, Philippines industries could not manage to their own without the
government protection. Philippines industries need the government to run their company.
Also they need the protection in order to ensure their safety competitors. They need the
approval of the government in building businesses. They need to ensure the papers that the
run their business legally.

2. For companies, investors and the Western economy as a whole, globalization has
become a blessing. Today, though, we are at risk of seeing a backlash against globalization
and all the resources that have given us over the past decades with growing economic
independence. As a win-win for every nation, there is a new anxiety running through
Western societies that challenges previous perceptions of free trade. Rather, there is a
proliferating suspicion that globalization may have been great for some countries, but not
for others, and that the shortest straw has been drawn by wealthy countries in the West.

3. A perfect deal. We don't optimize the money we have. We have illicit corporate loggers
overseas that pollute. They pay the fines again and again and continue the same polluting
operation. "Free trade" has been freed up by globalization. For virtually every trade
commodity, we have a trade deficit. The persons we trade with have used every trick in the
book to do this. The only factors where we have a trade surplus are manpower, the OFW
that are abused in most situations, but there are no options. In any way, we have been
politically bullied and once we can straighten out the bullies and say "Enough they can
begin.
Material 8 – Lesson 10
Questions

A. Construct a Venn diagram depicting economic growth and economic development.

Briefly explain the Venn diagram. (explanation at least three sentences)

B. Search the newspapers and the Internet for reports on the Philippine economy. Identify
those statements in the reports that indicate lack of knowledge on the part of the reporter
about the difference between economic growth and economic development.

C. What is the main difference between economic growth and economic development?
Which should the Philippines aspire for? (answer not less than 5 sentences)

Answers

Economic Growth Economic Development

@Movement of income,
@Increase in the
savings, and investment
volume of production together with positive
technological, social,
@ Increase in consumption, and economic
government spending, @Increased score in the
investments or net exports human development index,
decreased score in the
@ Measures improvements in
Inequality Index, and
@ Gross Domestic the economy of developing changes that bring about
Product countries higher quality of life
@Human Development
Index, Inequality Index,
@ Quantitative infant mortality, literacy
changes in the rate, and others
(quantitative and
economy
@Quantitative and
qualitative changes in the
economy

This diagram shows the similarity and differences of economic growth and economic
development. They differ on different aspect like factors measurements and effects. Only
on its importance become similar.
Main Differences between Economic Growth and Economic Development

Economic growth is the positive change in the real output of the country in a particular span
of time economy. Economic Development involves a rise in the level of production in an
economy along with the advancement of technology, improvement in living standards and
so on.

Economic growth is one of the features of economic development.

Economic growth is an automatic process. Unlike economic development, which is the

outcome of planned and result-oriented activities.

Economic growth enables an increase in the indicators like GDP, per capita income, etc.
On the other hand, economic development enables improvement in the life expectancy
rate, infant mortality rate, literacy rate and poverty rates.

Economic growth can be measured when there is a positive change in the national income,
whereas economic development can be seen when there is an increase in real national
income.

Economic growth is a short-term process which takes into account yearly growth of the
economy. But if we talk about economic development it is a long term process.

Economic Growth applies to developed economies to gauge the quality of life, but as it is an
essential condition for the development, it applies to developing countries also. In contrast
to, economic development applies to developing countries to measure progress.

Economic Growth results in quantitative changes, while economic development brings both
quantitative and qualitative changes.

Economic growth can be measured in a particular period. As opposed to economic

development is a continuous process so that it can be seen in the long run.