Economic development is a process by which a community creates, retains and reinvests wealth such that it leads to economic growth with improvement in quality of life. There are two main approaches to the concept of economic development, which are: traditional approach and modern approach. Traditional view of economic development implies a sustained increase in real per capita income. It is synonymous with economic growth. Modern view of economic development implies the process where the real per capita income of a country increases over a long period of time along with reduction of poverty, inequality and unemployment.
The features of economic development are:
Long term concept
Increase in real national income
Role of economic and non-economic factors
The indicators of economic development are:
Productivity per hectare
Per capita income
Per capita consumption
Physical quality of life index (PQLI)
Gross national income
There are three factors that determine economic development namely,
The terms economic growth and economic development are two different concepts. Economic growth means increase in real per capita income. Economic development means improvement in quality of life with increase in real per capita income.
Another important concept related to economic development is quality of life. It refers to the degree of economic well-being of the people. The various components included in basic needs approach to enhance the quality of life are: to provide better nourishment to people through more and better food, to provide adequate clothing, housing and better education, etc.
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Consider the following statements and identify the Wrong one.Marks:1
Economic development refers to more output, while economic growth implies both more output and changes in the socio-economic structure of the economy.
Economic growth refers to more output, while economic development implies both more output and changes in the socio-economic structure of the economy. Also economic growth involves increase in income and economic development involves increase in income with reduction in poverty.
Identify the components of better quality of life among the following given options.Marks:1
All of them
Components of better quality of life that can be provided by the government are:
(i) Better nourishment by providing people with more and better food and also by providing adequate clothing and shelter.
(ii)Generate more and better employment opportunities particularly for the low-end poverty groups.
(iii) Better education and to ensure better living conditions to overcome poverty.
___________ refers to the degree of economic well-being of the people.Marks:1
Quality of life
Quality of life refers to the degree of economic well-being of the people. The economists have started focusing on national income only and they have started emphasising on the quality and strategy of development. They suggest that direct attention should be given to quality of life.
Identify the correct statement which relates to economic development among the given options.Marks:1
Economic development is taken to mean growth plus change.
Economic development is taken to mean growth plus change. It is a broader concept and is not fully measurable. It requires the intervention of government. It actually relates to the problems faced by the present day’s developing countries.
Identify the right definition of economic development among the given options.Marks:1
When the real per capita income of a country increases over a long period of time along with reduction in poverty, inequality, and unemployment.
When the real per capita income of a country increases over a long period of time along with reduction in poverty, inequality, and unemployment it is known as economic development. It is multi-dimensional in nature.