Give economic factors of determinants of development.
Answers
Answer:
The process of development depends on a host of factors like natural resources, physical and human capital, technology, socio-politico-economic structure of the country. Determinants of development are broadly classified into economic factors and non-economic factors.
Determinants of economic growth
The determinants of economic growth are inter-related factors influencing the
growth rate of an economy. There are six major factors that determine growth
with for of them been grouped under supply determinants and the other two are
efficiency and demand.
The four supply factors are natural resources, capital goods, human
resources and technology and they have a direct effect on the value of good and
services supplied.
Economic growth measured by GDP means the increase of the growth rate of
GDP, but what determines the increase of each component is very different. Public
expenditure, capital formation, private or public investment, employment rates,
exchange rates etc. have different impacts on economic growth and we should take
into account that these determinants have different implications if the states are
developed or not. There are also socio-political factors and events that have a major
influence on the economic advancement of a country.
There are also differences between economic and non-economic determinants.
“Proximate” or economic determinants refers to factors like capital accumulation,
technological progress, labour and “ultimate” or non-economic sources refers to
factors like government efficiency, institutions, political and administrative systems,
cultural and social factors, geography and demography (Acemoglu, 2009).
Answer:
Natural resources, Human resources, capital formation, Technology