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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 disadvantages of informal economy? Disadvantages of the informal sector are as illustrated below: • don’t pay direct taxes; • Can produce important pollutio
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
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why does the quantity of salt demanded tend to be unresponsive to changes in its price?
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Demand
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