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Why do state approaches work into promoting development?
State planning and intervention is desirable due to the shortcomings of markets. The approaches range of state through planned economies by government setting outputs and prices.
Economic policy intends to protect domestic industry and encourage economic development through
• Heavy tariff barriers and a hostility to foreign direct investment to defend the home market for local firm’s for example
a. Limiting imports by quotas (limits onto the amount of imports permitted in a country)
b. High tariffs (taxes onto imports).
• High fixed swap over controls (high $/£) to create imports relatively inexpensive and exports relatively expensive
• State marketing boards purchase the output of tiny private sector farmers at well below world prices and utilize the foreign currency gain through profits to fund investment. There is low prices distort markets.
What is meant by the term value tree? Value Tree: A value tree gradually decomposes the overall objectives of a project within more exact objectives which can be agreed through
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What are the advantages of informal economy? Advantages of the informal sector: • Employment, opportunities and income. • Offers cheap inputs for the formal sector •
Calculate Average Total Cost A perfectly Competitive firm is operating at a profit-maximizing level of output, q*. This output level is 500 units. At this output level, the
characterestic of economics
What are the disadvantages of a informal economy?
What are the requirements of national figure to adjusting? National figures first require adjusting: • For population: Dividing Gross Domestic Product (GDP) by total populat
What are Harrod-Domar assumptions? The H-D (Harrod-Domar) model assumes as: • Fixed capital output ratio. Nonetheless, diminishing marginal returns to capital element exist
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