FINAL TERM ASSESSMENT SUMMER 2021

Student’s Name_____________________ Registration Number _________________

Program: BBA Class/Section: 5-A

Course Name: Developmental economics Course Code BA4706

Instructor’s Name: Museara Bhutto Instructor’s email museara.bhutto@hyd.szabist.edu.pk

Total Marks: 40 Marks Obtained:

Comment: (This Section is for Faculty Use)

Mention Date & Tuesday, 24/08/2021, Mention Tuesday, 24/08/2021,

Time of Sharing: time: 12:00PM - 02:30PM Submission Date:

Mention 2.5 HOURS + 30 Minutes

Submission Time: (12:00PM - 02:30PM)

File Type Allowed for submission: (MS Word, MS Excel, pdf, Images, Hand written)

IMPORTANT instructions:
 Read all the questions carefully and then solve in this file, if needed.
 Marks of each question are mentioned at the end of each question. Faculty Signature

 Solved Assignment must be emailed to the respective faculty by the due date and time, Late Receiving
will be marked Absent and Zero in Recap Sheet.
 The answer file must be attached in the email.
 Regardless of file type (image or document), email must include attachment for faculty to check.
 Non-submissions of the assignments will be considered as absent for the Final Term and will be marked “0”
on ZABDESK Recap Sheet.
 While checking of the Assignment, SZABIST Plagiarism policy is to be followed.
 Group assignments are not allowed.
_____________________________________________________________________________
Question 1: Compare and contrast two countries based on following data.(10 marks)
“Country A” “Country B “
1. GDP: 849.06 Billion 60.601 Billion
2. GNP: 198.97 USD 20.43 USD
3.GNI per Capita 79,989 3,392
4. Literacy Rate 99% 67%
5. HDI 0.961 0.695
6.Enrollment Rate 107 % 40 %
7.Unemployment 3.1% 8%
Rate
8. Crime rate 0.7% 8%
9. life expectancy 85.92 years 68.9 years
10: Infant mortality 2.1 deaths per 1000 5.16 deaths per 1000
rate live births live births
11. GINI Index 28.5% 52.1%
12: Urban 74.95 % 85.12 %
population
13: Rural 25.15 % 16.59%
population
14:Poverty: 3.9% 39.59%
(Multidimensional
score)
15: Sustainability: 71.9% 27.8%
16: Technology Top 20th ranked 79th ranked

(Be specific to your answer, maximum word limit 400 for each option)
a. Conduct detail analyses of each indicator of the data of above countries (Country A and
Country B).

Answer

Economic indicators are important statistics about the economy that can help you
understand where it's going.

GDP
The gross domestic product (GDP) is a lagging indicator. It is one of the first measures
used to assess an economy's health. It denotes economic output and growth, as well as the
size of the economy. GDP measurement can be difficult, however there are two
fundamental approaches.
Country A has Strong GDP than B

GNP
The gross national product (GNP) is an estimate of the total worth of all final products and
services produced by the means of production held by a country's citizens in a particular
period. The total of personal consumption expenditures, private domestic investment,
government spending, net exports, and any income received by locals from overseas
investments, minus income earned inside the domestic economy by foreigners, is used to
determine GNP.
Country A GNP is better than B

Literacy Rate
Shows how much population is engaged in education system. County A has better
education system. And this education system helps to improve overall country’s economy

HDI shows life style of population means they have shelter, sanitation system, Tap water
and other basic thing for life. Country A has better life style than B

Unemployment rate and criminal rate

Unemployment is people who does not have job which are job seekers country B has
greater unemployment than B that’s why they also have greater criminal activities.

Life expectancy and mortality

Life expectancy means average life year of persons county A has better life expectancy
due to healthy life style and better healthy facilities while B has low due to low health
facilities and poor life style.
Urban Population
 Country A has greater urban population than B because of country A is developed country
depending upon territory sector and earning from service sector Country B has poor
economic condition and depending on primary sectors people are engaged in agriculture
sectors

b. Compare and contrast two countries based on above data.

The economy of Country A is robust. As a result, country A is putting more emphasis on

human development in terms of health, education, and lifestyle. Because people who are
well educated and healthy make more money and contribute more to the economy.
While a developing country's GDP is insufficient to grow its population in order to create a
nation, People who are unhealthy and lack knowledge are a drain on the state's economy.
They're a good cause to raise the reliance ratio. Their population has exploded because they
think that if more family members earn more, they would be able to meet their fundamental
necessities. and overpopulation result in resource shortage and depletion

c. Suggests any policy and theory based on data.

The government must implement macroeconomic policies such as fiscal and monetary
policy. They may increase GDP by controlling population and creating more employment
for their country. With fewer family members and more employment, there may be greater
opportunities to invest in education and health. The country must strive more and spend
more in its development. To create jobs, a country's development spending may be
increased. Roads, dams, and heavy infrastructure are examples of development.
Question 2: Calculate expected urban income and compare to rural income. Suppose there is a
50% chances of getting a modern job. Will there be migration? Interpret your answer accordingly
Rural wage = $2.70 per day
Urban modern wage = $5 per day
Urban traditional income = $.75 per day (Marks , 05)

Answer:

(Le/Lus)*Wu

(0.5/0.75)*5
=3
Migration will move towards cities

Question 3: what is the impact of Covid-19 issue regarding development economics.How it is

hampering growth in a country. Suggests its possible solutions in the light of developing countries
issues. (Marks , 07) (Be specific to your answer, maximum word limit 400 for each option)

Answer 3

Covid-19 Impact
COVID-19 has had a significant impact on the world economic and financial markets, in addition to becoming a
deadly virus and health service catastrophe. The epidemic mitigation measures that have been adopted in many nations
have resulted in huge income reductions, higher poverty, and problems in the transportation, service, and industrial
industries, to name a few. Infectious disease outbreaks and epidemics have become global hazards as a result of
globalisation, urbanisation, and environmental change, necessitating a coordinated response. Despite the fact that the
majority of affluent nations, mostlya.
The afflicted nations have suffered significant economic effects as a result of COVID-19. The COVID-19 pandemic
has had a direct impact on income due to premature fatalities, workplace absenteeism, and productivity losses, as well
as a negative supply shock, with industrial activity decreasing due to worldwide supply chain disruptions and factory
closures. In China, for example, the output index fell by more than 54% in February compared to the previous month.
Consumer behaviour altered as a result of the pandemic's impact on productive economic activity, as well as the fear
and panic that accompanied it. This was mostly due to lower income and household finances, as well as the fear and
panic that accompanied the epidemic. Reduced travel has had a substantial impact on service businesses such as
tourism, hospitality, and transportation. According to the International Air Transport Association, airlines will lose
income as a result of this.
The COVID-19 quarantine restrictions have had the greatest impact on restaurants and bars, travel and transportation,
entertainment, and sensitive manufacturing in the United States.
Bigger economic issues are linked to present and possible future oil consumption, resulting in price changes as a result
of diminished economic activity caused by the COVID-19 pandemic. Significant price reductions were also caused by
anticipated surplus supply. Many oil-dependent economies may decline as a result of less trade and investment if oil
prices remain lower than projected.
Conclusion
We expect financial markets to remain volatile as the virus continues to disrupt economic activity and have a severe
impact on manufacturing and service industries, particularly in developed countries. It's still unclear if this crisis will
have long-term structural repercussions for the global economy or will have only short-term financial and economic
consequences. In any scenario, infectious illnesses like COVID-19 have the potential to cause significant economic
and financial consequences to regional and worldwide economies. It has been extroverted as a result of increased
transit connection, globalisation, and economic interconnectivity.

Question 4: In the light of developing economics, how following issues can be resolved in
developing countries (Be specific to your answer, maximum word limit 300 for each option)

Answer

1. Population issue, suggests any policy or solution (Marks , 03)

 Overpopulation is an undesirable situation in which the current human population exceeds
the Earth's real carrying capacity. A variety of causes contribute to overpopulation.
Overpopulation is caused by a variety of factors, including lower death rates, improved
medical services, and the depletion of valuable resources. If a sparsely inhabited region
cannot maintain life, it can become highly populated.
With each passing year, technological advancements have impacted humanity in a variety
of ways. One of these has been the capacity to save lives and improve medical care for
everyone. As a direct result of this, people are living longer and the population is growing.
Population increase throughout the world is increasing disputes over water, energy, food,
open space and wilderness, transportation infrastructure, school rooms, and a variety of
other issues. Large family sizes are a key source of poverty and ill health in
underdeveloped nations. In the previous sixty years, no nation has transitioned from
“developing” to “developed” status without first decreasing population growth.
Overpopulation has serious consequences. The first of these is resource exhaustion. The
Earth can only generate a certain amount of water and food, both of which are in short
supply today.
The majority of the environmental harm witnessed in the previous fifty years is due to the
world's rising population. Cutting down forests, hunting wildlife recklessly, polluting the
environment, and generating a slew of other issues are among them.
Solutions
Education
Implementing policies that reflect societal change is one of the first steps. Educating the
general public helps them comprehend the need of having only one or two children at
maximum.
Family Planning:
Because the world's population is rapidly increasing, boosting public knowledge about
family planning and informing people about the catastrophic consequences of
overpopulation can assist to slow population increase.
One of the greatest ways to avoid an unplanned pregnancy is to inform them about the
different safe sex practises and contraceptive options available.

2. Urbanization and Rural-Urban Migration. Suggest policy or solution (Marks , 03)

 Human populations have tended to increase throughout time. Tiny groups of people found
reasons to form organisations, and with the advent of agriculture, small sedentary
communities grew as more people were born. A handful of these settlements eventually
grew into what we now call cities. Typically, this sort of expansion is followed with a shift
in labour organisation.
The world's population has grown rapidly in recent centuries, and our economies have
become more industrialised, resulting in a massive increase in the number of people
relocating to cities. This is referred to as urbanisation. Even when cities emerged, the great
majority of people continued to live in rural areas.
Despite the fact that people are drawn to cities because of their benefits, the impacts of
urbanisation are varied. We'll start with some of the positive aspects of urbanisation before
moving on to some of the issues that unchecked urbanisation may cause.
Thriving towns and communities are essential components of a healthy national economy.
Bringing together economic and human resources in one location fosters innovation and
growth in business, research, technology, and industry. Rural residents have less access to
education, health, social services, and cultural activities than city dwellers.
Cities have better child survival rates.
Solution:
Environment protection
Countries shall enact laws that design and offer ecologically sound cities and smart growth
strategies, recognising that people should not live in dangerous or polluting regions.
Population control:
To assist lower the high rates of population increase, all stakeholders in metropolitan areas
must provide campaigns and counselling for effective medical health clinics and family
planning.
With the goal of managing illnesses and population increase, medical health clinics geared
on family planning choices must be made available across the whole urban area.

3. Agricultural Transformation .Its policy, issues and solution(Marks , 03)

Agriculture is the most prevalent land use in rural areas all over the world, and it is
essential to rural sustainability. Farming and related activities are an important part of rural
life, contributing significantly to the general well-being of rural communities in terms of
job and business opportunities, infrastructure, and environmental quality.
 Farming's share of the rural economy, and therefore its relative importance as a sector, has
an impact on its potential economic contribution to rural development. In certain countries,
farming may be the primary source of income, employing the vast majority of the
population. The social and political stability of the country is plainly under jeopardy.
Rural development is commonly thought of in terms of providing a gradual rise in people's
economic security in rural areas. A rural region's maximum population density is
commonly used to characterise it.
While any type of economic activity in rural areas has the potential to benefit rural
communities,
In countries where agriculture employs a substantial proportion of the workforce, such as
those where farmers account for more than 50% of the workforce, farming is projected to
be the major economic activity influencing the speed of rural development. Because
agriculture employs such a big part of the workers, any plan that resulted in a quick and
artificial reduction in employment may be devastating.

4. Human Capital utilization and development. Its policy, issues(Marks , 03)

Economic growth is in and of itself the realisation of human potential; without it, no human
potential can be realised. Economic growth, whether accomplished through development or
not, is the result of the development of human capital. Workers' knowledge, talents, and
experience in the workplace are referred to as human capital. Human capital has an
influence on economic growth and may help an economy prosper by improving the
knowledge and talents of its citizens. Most developed countries' economies have benefited
from improved capacity to train productive and capable personnel. Human capital is also
defined as a collection of knowledge, skills, talents, and relevant experience held by an
individual.
In a larger sense, human capital is described as a store of health, knowledge, skills, talents,
and motivations that contribute to growth while also providing revenue in the form of
salaries or rent: a collection of health, knowledge, skills, talents, and motives that
contribute to growth and, in a larger sense, produce money in the form of wages or rent.
The cost-to-economic-results ratio, or more precisely, actual results-to-expectations ratio, is
commonly used to evaluate the efficacy of human capital investment. A quantitative
measure of the social efficiency of human capital investment is the contribution to
economic growth. As a result, improvements in labour quality should be reflected in GDP
growth, the most significant indicator.
 Mass worker education, state income redistribution through taxes and social transfers, and
labour relations regulation have all helped to reduce inequality in most economically
developed countries.

5. Trade and suitable policy, issues and solutions (Marks , 03)

Cross-national commercial transactions are referred to as international trade. Consumer

items, such as television sets and clothing, as well as capital goods, such as machinery, raw
materials, and food, are frequently exchanged. Travel services and payments for foreign
patents are examples of other sorts of transactions (see service industry). International
financial payments facilitate international trade, with the private banking sector and central
banks of trading nations playing important roles.

International trade in goods and services is essential for poverty eradication and long-term
development. By fostering economic growth through trade growth, international trade helps
to address poverty reduction, food security, job creation, gender equality, and
environmental sustainability. China and India, for example, are contemporary examples of
countries that have boosted economic growth by increasing their participation in
international trade, particularly exports.
Governments aim to expand their export and import markets by engaging in global,
regional, and bilateral trade agreements to liberalise trade conditions inside their borders
and with other countries. They also seek to harmonise or coordinate trade-related rules and
regulations in order to minimise unfair trade practises. Uncompetitive industries may
disappear, leading in job losses, whereas more competitive industries may grow, resulting
in new, better-paying jobs and economic opportunities.
The local market (national and/or regional) is important for all countries, large and small,
prosperous or impoverished, but it cannot be the major platform for marketing goods and
services produced in the country. Domestic demand as well as international trade are
required to allow for the expansion and diversification of trade while also benefitting from
its dynamic effect. As a result, joining the WTO, concluding trade agreements within its
sphere of influence, including the current Doha Round and the negotiating issues
confronting WTO members at the Bali Ministerial Conference, effectively implementing
the agreements, and laying out national and regional strategies to capitalise on the
opportunities are all priorities.
 6. Utilization of Foreign Aid in developing countries. (Marks , 03)

Foreign aid is the international transfer of money, services, or products from governments
or international organisations for the benefit of the recipient country or its people. Foreign
aid can be financial, military, or humanitarian, and it is one of the most important sources
of foreign cash.
Foreign help is the voluntary transfer of money or other resources from one country to
another. The vast bulk of transactions take place between developed and developing
nations. Expert advice and training, as well as products and financial resources, may be
required for foreign assistance. Financial resources can be obtained through concessional
loans or grants, such as export credits. The most common kind of foreign aid is official
development assistance (ODA), which is given to aid in development and poverty
eradication. The main source of ODA is bilateral grants from one country to another,
however some of it is in the form of loans, and it is frequently channelled through non-
governmental organisations and foreign organisations.
A country's goods, as well as its literature, culture, and religion, are all promoted through
foreign aid. Drought, illness, and violence are all examples of man-made or natural
calamities for which countries regularly give aid. It contributes to long-term prosperity, the
development or strengthening of political institutions, and the resolution of a wide range of
global challenges, including cancer, terrorism, and other human rights violations, as well as
environmental damage.
Note: you can take example of hypothetical or developing country and give answers of above
options