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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 are the limitations of balanced growth? The limitations of balanced growth: • The strategy of balanced growth is away from the resources of most poor countries; • Go
What is the argument of advocates of World Bank in promotion of development? Advocates of the World Bank argue: • Loans and aid alone don’t guarantee development or the
what are the factors that affect the volume of production in economy
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Does aid improve development? Aid improves development as: • Aid is utilized to increase productive capacity and the advantages of resultant growth is extensively spread an
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