Name: Anas Rana
Registration ID: 18475
Subject:Introduction to Development StudiesFrom:22 Nov 2020
Instructor:Akhtar Hussain Till: 28 Nov 2020
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Program: BBA Time Allowed: 1 Week
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No. of Students: 289 Max. Marks: 25
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Section (if Any):
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Department of Business Administration
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Mid Term – Exam Fall - 2020
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Section A
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Q1. Development is all about progress, up gradation and bringing continuous improvement
in the lives of the people. Please elaborate in detail why development dynamics in the
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developed countries is different as compared to developing countries along with examples (5
Marks) (300 Words Max).
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Answer:
A developing country is a country with a less developed industrial base (Industries) and a low
capita income related to developed countries. Where developed countries are more
industrialized and higher capita income levels. To be considered a developed nation, a
country generally has a per capita income around or above $12,000. Also, most developed
countries have an average per capita income of approximately $38,000.
The population of developed countries are generally more stable, and it is estimated that they
will grow at a steady around 7% over the next 40 years. In addition, to having high per capita
income and stable population growth rates, developed nations are also characterized by their
use of resources. In developed countries, people consume large amount of natural resources
per person and estimated to consume almost 88% of the world’s resources.
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Moderately as per developing countries the average per capita income approximately less
than $1,000. In many of these countries, the average per capita is even lower, at around $500.
Pakistan is also a developing country in which, the country have to face a lot of difficulties
and have to take loan from developed countries like China and America which are the
advanced develop countries. In which economy factor gets low and prices of product gets
high.
This thing effect the development of a developing country and on the other hand develop
countries make progress.
[Link] Development approach - is about expanding the richness of human life?
Elaborate in detail why human development indicators in developed countries are different
from developing countries with examples (5 Marks) (300 Words Max).
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Answer:
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The human development approach focuses on improving the lives people rather than
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assuming the economic growth will lead, automatically, to greater opportunities for all.
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Income growth is an important means to development, rather than an end in itself.
Human development is about giving people more freedom and opportunities to live lives they
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value. In effect this means developing people’s abilities and giving them a chance to use
them. For example, educating a girl would build her skills, but it is little use if she is denied
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access to jobs, or does not have skills for the local labor market.
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Human capital is the fundamental source of economic growth. It is a source of both increased
productivity and technological advancement. In fact, the major difference between the
developed and developing countries is the rate of progress in human capital.
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The higher the average income of a country, the more likely it is that its population will be
healthy and able to enjoy a full and long life. People in developed countries are also more
likely to avoid hunger and illiteracy. In short, their basic capabilities tend to be greater than
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those of people living in developing countries. The same correlations also appear when one
confines attention to developing countries by plotting life expectancy at birth against
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consumption per capita.
But not every time Human Development is based on Economic growth, Sri Lanka being a
developing country but their record of progress in Human development also illustrates what
the right sort of public action can achieve, independently of income growth.
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[Link] is all about connectivity and interconnectedness. Has Globalization gone
too far, not far enough, or has it been heading in the wrong direction? Give your argument
with examples to validate this question (5 Marks) (300 Words Max).
Answer:
Globalization means the speedup of movements and exchanges (of human beings, goods,
services, capital, technologies, or cultural practices) all over the planet. One of the effects of
globalization is that it promotes and increases interactions between different regions and
populations around the globe.
Globalization is also unjust is if the process depends on coercion, corruption, and fraud.
Globalization is unjust because the benefits of global cooperation are enormously biased
favor the interests of the rich and powerful.
Due to globalization people forget their own culture and in some countries their religion.
Nowadays you can many Pakistani girls marrying Chinese boys. Some eastern countries are
just following the western culture, their teachings, fashion, languages etc. And due to
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Globalization, developed countries get favor. For example Raymond Davis who is a former
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US Army Solider and have a contract with CIA, on which he killed 2 people in Lahore but he
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got free after some inquiry.
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Globalization is not gone too far but it’s headed to wrong direction. Through Globalization
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developing countries got to know how to develop themselves.
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Section B
Read the Case Study Properly and Answer the Questions Given Below:
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Introduction
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Many people mark the birth of economics as the publication of Adam Smith's The Wealth of
Nations in 1776. Actually, this classic's full title is An Inquiry into the Nature and Causes of
the Wealth of Nations, and Smith does indeed attempt to explain why some nations achieve
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wealth and others fail to do so. Yet, in the 241 years since the book's publication, the gap
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between rich countries and poor countries has grown even larger. Economists are still refining
their answer to the original question: Why are some countries rich and others poor, and what
can be done about it?
"Rich" and "Poor"
In common language, the terms "rich" and "poor" are often used in a relative sense: A "poor"
person has less income, wealth, goods, or services than a "rich" person. When considering
nations, economists often use gross domestic product (GDP) per capita as an indicator of
average economic well-being within a country. GDP is the total market value, expressed in
dollars, of all final goods and services produced in an economy in a given year. In a sense, a
country's GDP is like its yearly income. So, dividing a particular country's GDP by its
population is an estimate of how income, on average, the economy produces per person (per
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capita) per year. In other words, GDP per capita is a measure of a nation's standard of living.
For example, in 2016, GDP per capita was $57,467 in the United States, $42,158 in Canada,
$27,539 in South Korea, $8,123 in China, $1,513 in Ghana, and $455 in Liberia.
Source: World Bank, retrieved from FRED®, Federal Reserve Bank of St.
Louis; [Link] accessed Feb 27, 2019.
Because GDP per capita is simply GDP divided by the population, it is a measure of income
as if it were divided equally among the population. In reality, there can be large differences in
the incomes of people within a country. So, even in a country with relatively low GDP, some
people will be better off than others. And, there are poor people in very wealthy countries. In
2013 (the most recent year comprehensive data on global poverty are available), 767 million
people, or 10.7 percent of the world population, were estimated to be living below the
international poverty line of $1.90 per person per day.3 Whether for people or nations, the key
to escaping poverty lies in rising levels of income. For nations specifically, which measure
wealth in terms of GDP, escaping poverty requires increasing the amount of output (per
person) that their economy produces. In short, economic growth enables countries to escape
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poverty.
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“Open markets offer the only realistic hope of pulling billions of people in developing
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countries out of abject poverty, while sustaining prosperity in the industrialized world."1
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—Kofi Annan, former United Nations Secretary-General---
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Questions
1. How would you classify countries in terms of core periphery model (Core, semi-
periphery and periphery region) and why? Briefly State facts with respect to this
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case study (4 Marks)(200 Words Max).
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Answer:
Core Countries (USA) are dominant, capitalist countries characterized by high levels of
Industrialization and urbanization. Core countries are capital intensive, have high wages and
high technology production patterns and lower amounts of labor exploitation and concern.
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Peripheral countries (Most African Countries) dependent on core countries for capital and are
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less industrialized and urbanized. Peripheral countries are usually agrarian, have low literacy
rates and lack consistent Internet access. Semi-peripheral countries (South Korea) are less
developed than core nations but more developed than peripheral countries. They are buffer
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between core and peripheral countries.
Core countries own most of the world’s capital and technology and have great control over
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the world trade and economic agreements. They are also the cultural centers which attract
artists and intellectuals. Peripheral countries generally provide labor and materials to core
countries. Semi countries exploit peripheral countries, just as core exploit both semi and
peripheral countries. Core countries extract raw materials with little cost. They can also set
the prices for the agricultural products that peripheral countries export regardless of market
prices, forcing small farmers to abandon their fields because they can’t afford to pay for labor
and fertilizer.
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2. What is effect of lower per capita income on Human Development? Do you think
Developed countries have better Human Development Indicators as compared to
developing nations? Hint: Support your answer with reference to this case study (4
Marks)(200 Words Max).
Answer:
Developed countries takes 88% resources of the world from which their Human development
is well good. And in developing country 43% of total population lived on less ten $2 per day
and some struggled to survive on not even $1 per day.
In which developed country GDP also grow and their human development is well good
despite the developing countries have to survive for hunger and literacy. And on the other
hand developed countries enjoyed the gains.
Whether for people or nations, the key escaping poverty lies in rising levels of income.
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Which means their GDP , which means helping in Development of a nation.
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3. Please discuss some policy recommendations to reduce the poverty and improve the
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human development indicators in developing countries with reference to this case
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study (2 Marks) (150 Words Max).
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Answer:
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Growth can generate virtuous circles of prosperity and opportunity. Strong growth and
employment opportunities improve incentives for parents to invest in their children’s
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education by sending them to school. This may lead to emergence of a strong and growing
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group, which should generate pressure for improved governance. Strong economic growth
therefore advances human development, which promotes economic growth.
A successful strategy of poverty reduction must have its core measures to promote rapid and
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sustained economic growth. The challenge for policy is to combine growth promoting
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policies with policies that allow poor to participate fully in the opportunities unleashed and so
contribute to that growth. This includes policies to make labor markets work better, remove
gender inequalities and increase financial inclusion.
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