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Reasons for development planning:
To maximize the utilization of economic resources: The resources of any nation are not always enough for her use. In this wise, resources must be allocated in such a way that they achieve maximum utilization of them.It is through the proper allocation of their resources that nations can accelerate their pace of economic development.To correct the imperfection of the market system – The market system in reality is not perfect and therefore allocation of resources which occur under perfect competition model does not happen. There is therefore the need to interfere to ensure efficient allocation of resources
To ensure balanced growth: planning may be used to ensure balanced growth for all sectors of the economy.By this there will be uniform growth and provision of complementary services and intra sectoral linkages.
Consider the market for Kitty Litter. Assume this industry is purrfectly competitive and is presently in long-run equilibrium. Suppose people begin to prefer Dogs as pets and Cat
They take deposits which mean borrow money and make loans which means lend money. The interest rate they pay on the deposits is less than the interest rate they charge on their loa
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