CLEOFE MAE P.

ASEÑAS ECONOMIC DEVELOPMENT 11 C- B

MIDTERM EXAM

1. Under what circumstances might a country achieve economic growth without

economic development? 20pts

Economic growth is similar to rising levels of productive activity and material well-being
for nations. Attaining this goal results in increased earnings, more employment, and a greater
supply of products and services accessible for investment and consumption. However, the
significance of economic development should not obscure it’s obvious drawbacks. Some of the
circumstances that a country should face in order to achieve economic growth without
economic development include the following: It will increase inequality and have dangerous
sociopolitical implications that directly threaten the fundamental foundations of liberty and
democracy. Economic growth is a misleading measure since it ignores the majority of the
informal sector and fails to capture welfare. Even more concerning is the possibility of
increasing economic growth while simultaneously improving economic problems such as
poverty and inequality. While there are many problems regarding the interpretation and
measurement of GDP, this does not lessen its significance.

2. List 5 Determinants of Economic development and briefly explain how each affects the
economy.  20 pts

CAPITAL- Capital is at the heart of economic development. In basic terms, capital refers to the
portion of an economy's wealth that is used to generate more wealth. It encompasses all kinds
of replicable wealth that are used directly or indirectly to generate a significant amount of
output.

CAPITAL FLIGHT- Capital flight refers to the uncertain and rapid movement of significant
amounts of money out of a country. Capital flight may threaten the financial system's stability
and can result in a significantly weaker currency, which raises the cost of critical imported
goods.

SOCIAL STRUCTURE- A stable system of institutions through which human beings interact and
coexist in a society. A society with an equal distribution of wealth and economic rights, as well
as an open society, fosters economic growth more effectively.
POLITICAL CONDITIONS- It is defined as a government's tendency to collapse as a result of
conflict or widespread competition among different political groups. Political instability is a
lengthy problem. Political conditions is the stability and equitable economic policies promote
economic growth in countries where often changing governments threaten the continuity of
economic plans.

CORRUPTION- According to the United Nations, “corruption undermines human development

and democracy. It reduces access to public services by diverting public resources for private
gain.” Corruption occurs as a result of governmental entities that lack openness about the
source of their tax income and how state resources are utilized. Corruption also undermines
trust, discourages economic growth, and worsens inequality, poverty, social division, and the
environmental crisis.

3. Is economic development possible without government intervention? Give a brief

explanation

Economic development is not possible without government intervention. Based on what

I’ve learned, government intervention is required to balance income distribution throughout
society. Inequality may be produced through advantage and monopolistic power, rather than
talent and manual labor. Without government intervention, businesses may use their
monopolistic position to pay employees low salaries and charge customers exorbitant prices.
Without government intervention, monopolistic power is likely to expand. Government
involvement has the potential to control monopolies and increase competition. As a result,
government action may create more economic equality, which is seen as more fair.

4. In your Opinion what would be a good strategy for the Philippine government to
implement in order to achieve economic development.  Explain why and describe
briefly how to implement the strategy using the ideas about Economic Development

The Philippines' domestic economy, tax policy, and labor market have improved
significantly; nevertheless, more effort is needed in the areas of basic infrastructure, health and
the environment, education, scientific and infrastructure. To implement the strategy. The
Philippines must accelerate and maintain investment in physical infrastructure, boost investor
and consumer confidence, and address insufficient human capital investment, low
technological competitiveness and future preparedness, and ongoing political concerns. By
including innovation as a critical component of development strategies, the government can
boost the country's productivity and competitiveness.