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Assignment Nos. 4/ Overview and Fundamentals of Economic

Submitted by: Ciara Castañeto Submitted to: Prof. Aj Orencia

Date Submitted
April 16, 2021

Section Schedule
Wednesday 4:00-5:30PM
1. What is the main difference between economic growth and economic
development.? State the main difference.

Growth simply means 'growing larger,' while growth means 'improving.' Growth can
be defined as the process of becoming bigger, bigger, or more important. Growt h
refers to physical changes, while growth refers to both physical and social or
psychological changes. A rise in real national income / national productivity is referred
to as economic growth. Improvements in the quality of life and living conditions, such
as literacy, life expectancy, and health care, are examples of economic growth. In
normal circumstances, we would expect economic growth to facilitate more economic
progress. Economic development is not only quantitative but also qualitative changes
that lead to better meeting their needs. Economic growth is the continuous increase
in the amount of production in one region, i.e. GDP growth, while economic
development is not only quantitative but also qualitative changes that lead to better
meeting their needs. The accumulation of money, i.e. savings, is linked to economic
growth. Permanent manufacturing commodities that act as a work tool in the
production of other goods are referred to as money. We define investment as investing
in fixed and revolving funds, that is, the portion of the social product that is not invested
but is used for capacity replacement and expansion. Economic growth is described as
an increase in the monetary value of all products and services generated in the
economy over a given period of time. It's a mathematical metric that represents the
potential for a growth in the volume of market transactions in the economy. Economic
growth can be calculated using economic principles like GDP and GNP, which
calculate the rise in the net market value of additional goods and services provided.
As opposed to sustainable progress, economic growth is a limited term. Economic
growth is the mechanism by which a country's general population's overall wellbeing,
well-being, and education level improves. It also points to the increased manufacturi ng
rate as a result of technological advances. That is the qualitative change in the lives
of a country's people, and it is best measured by the Human Development Index (HDI).
Many factors influence a country's overall growth, including job production,
technological advances, standard of living, living conditions, per capita income, quality
of life, increase in self-esteem needs, GDP, industrial and infrastructural development,
etc.

2. Is it true that a country is economically developed although not economically

growth? Support your answer.

A developing economy is one that is found in a developed world with a high degree
of economic growth and stability. The income per population or per capita gross
domestic product, the level of industrialization, the general standard of living, and the
amount of technical technology are all standard metrics for assessing a country's level
of growth. Noneconomic factors, such as the human development index (HDI), which
combines a country's educational, literacy, and health indicators into a single number,
can also be used to assess an economy or its level of development. Although no strict
threshold exists for an economy to be classified as emerging or developed, per capita
gross domestic product (GDP) is the most common criterion used to decide whether
it is developed or developing. Economic development, without a doubt, is dependent
on a degree of economic independence, and in some cases, more freedom may
stimulate additional growth. However, countries' development paths are much more
complex than the Index suggests. The Index conflates cause and effect in the case of
newly prosperous countries: freedom is more often the outcome than the cause of
growth. With regard to countries already rich, the book starts from a faulty assumption
that growth is all that their citizens should care about. The Index is hardly a
straightforward report of scientific research. Development has long been a catch-all
word, and it now seems that everybody has something to tell about it, from politicians to
pop stars. Surprisingly, as they learn about it, all of them seem to have different ideas.
And it is important to understand what one is talking about, if only to distinguish
development from economic growth, with which it is often conflated. In reality, it is
thought that the obvious collapse of the construction project (a fact that is scarcely
contested now, as it seems – see, for example, Nabudere 1997: 2003) is to blame. It is
proposed that growth and progress are two distinct processes, as measured by the
Gross National Product and the Human Development Index. In reality, economic growth
is merely a phase on the road to progress – though an important one, if not a necessary
one – and cannot be considered development in and of itself.

References:
Pettinger, T. (2018, September 23). Difference between economic growth and
development. Retrieved from Economics Help website:
https://www.economicshelp.org/blog/1187/development/economic-growth-and-
development/#:~:text=Economic%20growth%20means%20an%20increase
Ivic, M. (2015). ECONOMIC GROWTH AND DEVELOPMENT. JPMNT) Journal
of Process Management -New Technologies, International, 3(1), 55. Retrieved
from https://scindeks-clanci.ceon.rs/data/pdf/2334-735X/2015/2334-
735X1501055I.pdf
Difference Between Economic Growth and Economic Development. (n.d.).
Retrieved from BYJUS website: https://byjus.com/commerce/difference-between-
economic-growth-and-economic-development/
Majaski, C. (2019). Developed economies vs. non developed economies and
criteria. Retrieved from Investopedia website:
https://www.investopedia.com/terms/d/developed-economy.asp
Scott, B. R. (1997, May 1). How Do Economies Grow? Retrieved from Harvard
Business Review website: https://hbr.org/1997/05/how-do-economies-grow