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Explain the key issues in relation to the developing nations concerning economic development and economic growth.

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Introduction

08.02.04 Anna Markmann Sec. 5 - Development economics - Essay #1 Explain the key issues in relation to the developing nations concerning economic development and economic growth Economic growth occurs if there is an increase in country's output over time, that is an increase in its national income. Economic development occurs if the increased output also improved the standard of living including variables such as the provision of health care, housing, education, employment and income distribution, etc. Even though growth can exists without development (see left diagram in "PPF-development"), growth is not equal to development and vice versa: diagram 1: PPF - growth and development From the Production Possibility Frontier one can see there the national income could be, if all FOPs were most efficient used. ...read more.

Middle

But Economic Development is not only a much broader concept (see curve below in "PPF -development" right diagram), it also combines economic growth with an improvement of the standard of living, which benefits both rich and poor people (because necessities are needed by both): diagram 2: PPF- development1 But the problems of developing countries for growth and development are lacks in the infrastructure (includes machines, skilled, specialized, divided labor, technical knowledge) to produce modern goods and services more efficiently, too rapid population growth for available resources, not enough savings to finance investment and large foreign debts. Problems of developed countries of growth are features like increases in noise, anxiety, stress, congestion, pollution and that extra machines can be produced only by using resources currently involved in making consumer ...read more.

Conclusion

Many developing countries have made enormous efforts to provide universal primary education. As more and more capital is used, labour has to be better trained in the skills to use them. The level of investments and the quality of investments will directly affect the level of economic growth. The efficiency of the labour force and the other factors of production will depend upon the amount and quality of capital they have. But only in developing countries a lot of the investments come from abroad2. To conclude the key issues concerning economic development and economic growth are very essential to developing countries, since they lack in both. But if they manage - inventions and innovations must be encouraged - to obtain economic growth and economic development they will be efficient over time. Word count 629 1 http://www.bized.ac.uk 2 http://www.bized.ac.uk Virtual Zambia ...read more.

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