Economic Growth and Development

1. What is UDC?

Under Developed Country

2. What is economic thought?

The history of economic thought deals with the origin and development of economic ideas and their interrelations.

3. Definition of Economic thought?

In the words of Prof. Bell, “economic thought is a study of heritage left by writers on economic subjects over a period of about 2500 years ; and it freely draws upon all phases of human knowledge”.

4. What is necessary for understanding growth of economic theories and institutions?

If we study ancient economic thought, we can have a proper understanding of the growth of economic theories and institutions.

5. What was the importance given by Hebrew?

In their writings, they gave top priority for religion and ethics. And they gave importance to agriculture.

6. What do Hebrew deals with?

The Hebrews had definite ideas on subjects such as usury (interest), just price, property rights and monopoly.

7. What was the ideology of Hebrew on lending money?

The Hebrew thought was against lending of money on interest to fellow Hebrews. But they could lend money to strangers and get interest.

8. Why was Hebrew considered getting interest to unethical?

In those days, as money was borrowed by the poor for consumption purposes, they thought that it was unethical to charge high rates of interest.

9. What was the ideas of Hebrew on businessmen?

The Hebrews had many laws against false weights and adulteration. They wanted businessmen to charge a just price and they imposed ceiling on the profit margin.

10. What kind of civilization was followed by Hebrew?

The Hebrew civilization was a rural and agrarian civilization.

11. When do Hebrew stop cultivation?

The Hebrews did not cultivate the land every seventh year. They left it fallow. The object was to conserve the fertility of the soil.

12. What is Jubliee year?

The jubilee year was the 50th year. According to Jubilee year, the land sold to someone was to revert to its owner in the 50th year. Money was used during the Hebrew Period.

13. What is Sabbath?

The Sabbath was the weekly day of rest, relaxation and good living. In the words of Spiegel, “ the institution of the weekend was a social invention that has no parallel in the civilizations of Greece, Rome or other ancient cultures”. In short, we find that religion, ethics, law, economics and philosophy were all bound together.

14. What was considered to be important institution of ancient India?

Caste system

15. What was the important occupation in ancient time?

Agriculture

16. How is thirukural talking about economics?

• Thiruvalluvar’s Thirukkural is a book of ethics and it deals with Dharma or Aram (ethics), Artha or Porul (Polity) and Kama or Inbam (Love). Valluvar’s economic ideas are found mostly in the second part of the Thirukkural, the Porutpal or the part dealing with wealth.
• By Porutpal, Valluvar meant all that kautilya meant by Arthasastra.

17. What are the features of medival economic thought?

• The period from 476 A.D, which marked the fall of the Roman empire to 1453 A.D., the year in which the Turks captured Constantinople is generally regarded as the Middle Ages.
• The society of the Middle Ages was a feudal society. People in middle ages lived in a natural economy.
• Men lived largely in small and self- sufficient units.
• The Church, the Bible and Aristotle exercised a great influence on the life and thought of Middle Ages.

18. What is mercantilism?

The economic ideas and policies which were followed by European governments from the 15th century until the second half of the 18th century may be described as mercantilism

19. What is the view of mercantilism on wealth?

The mercantilists thought that the wealth of a nation could be increased by trade. And they wanted to have more wealth by increasing the stock of gold and silver.

20. What was the means for creation of strong state?

Mercantilism was only economic means for the creation of a strong State.

21. Which is called as `policy power’?

Mercantilism

22. Who was influenced by `Physiocracy’?

Adam Smith, who is regarded as the Father of Economics was greatly influenced by the physiocrats

23. What do the term physiocracy means?

The term ‘physiocracy’ means ‘Rule of Nature’.

24. Who created concept of natural order?

The physiocrats developed the concept of natural order. According to them, the natural order is an ideal order given by God. They believed that individual interests were identical with the interests of the society.

25. Who advocated laissez faire?

Physiocrats

26. What is Quesnay?

Quesnay, chief representative of physiocratic school explained how circulation of wealth took place in an economy in his “Tableau Economique” (The Economic Table) among 4 different classes: the productive class (farmers); the proprietory class; and the sterile class (all those engaged in non-agricultural occupations, e.g., merchants, domestic servants)

27. Name some economist from classical school of economics ?

Adam Smith, David Ricardo, T.R.Malthus and J.S. Mill are the leading economists of the classical school.

28. When was historical school of economics dominant?

The historical school was dominant in Germany during the second half of the 19th century.

29. What did the historical school advocates?

The historical school advocated protection for new industries through tariffs.

30. Who was the founder of scientific socialism?

Karl Marx (1818-1883) was the founder of scientific socialism.

31. What did Alfred Marshall state about economics?

It was Alfred Marshall who pointed out that economics was on one side a study of wealth and on the other and more important side a part of the study of man.

32. What do the term institution includes?

The term “institutions” includes customs, social habits, laws, ways of living and modes of thinking. For example, slavery is an institution. We celebrate certain days as festivals. That is also an institution.

33. Who is father of new economics?

J.M. Keynes is considered the Father of New Economics.

34. How is economic growth defined?

Economic growth has been defined by Arthur Lewis as “the growth of output per head of population”.

35. What are the conditions of economic growth?

According to Arthur Lewis, economic growth is conditioned by (1) economic activity, (2) increasing knowledge and (3) increasing capital.

36. What is underdeveloped country ?

The terms “underdeveloped”, “less developed”, “backward”, and “poor” and “developing” are generally used to refer to low income countries. The countries which have low standard of living because of their low per capita incomes are known as underdeveloped countries.

37. How are countries classified?

. Countries are classified into developed and underdeveloped countries according to their per capita income

38. What are the characteristics of underdeveloped country?

According to Meier and Baldwin, an underdeveloped country has six basic economic characteristics. They are :

1) it is primary producing ;

2) it faces population pressures ;

3) it has underdeveloped natural resources ;

4) it has an economically backward population ;

5) it is capital deficient and

6) it is foreign trade oriented.

39. What is vicious circle of poverty?

According to Ragnar Nurkse, low capital formation is one of the basic causes of poverty in these countries. Low capital formation leads to low productivity. Low productivity results in low income and low incomes result in low savings and low savings lead to low capital formation. Thus, it forms a vicious circle of poverty.

40. What is luxury for underdeveloped states?

For underdeveloped countries, laissez-faire policy is a luxury.

41. Which increase productivity of labours?

Education and health increase productivity of labour.

42. What are the Rostow`s stages of growth?

• The traditional society;
• The transitional society;
• The take-off stage;
• The mature stage and;
• The age of high mass consumption