ECONOMICS
NOTES : CLASS X
CHAPTER 1 : DEVELOPMENT
1. Why is Per Capita Income calculated in the US dollars?
Ans: The Per Capita Income is calculated in the US dollars because:
* US dollar is considered as the medium of international exchange. It is accepted as
method of payment across the world.
* Dollar has been the strongest and most stable currency since the end of World War II.
* It becomes easy to compare per capita income of various countries when it is
converted into a common currency. i.e the US Dollar.
2. How is economic growth different from economic development?
• Economic growth is defined as a process where a country’s income increases
over a period of time.
• Economic Development however not only takes the increase of income into
consideration but also covers increase in economic welfare by reducing
poverty, unemployment and inequalities in the distribution of income.
3. What is HDI? How is it calculated?
HDI is a tool which is a measure of human capabilities such as educational
achievement, life expectancy rate and standard of living. HDI is used to rank the
countries and HDR is published by UNDP (United Nations Development Program)
HDI is calculated based on following parameters:
• Per Capita Income calculated in US $
• Life expectancy at birth
• Literacy Rate
4. Why is the issue of sustainability important for development?
• Development must happen considering the future needs of generations.
• Unethical exploitation of natural resources reduces the scope of development
for future generations.
• Sustainability makes it possible to share development opportunities amongst
the poorer sections of the society.
• It increases economic welfare for future generations.
5. Differentiate between Human Development Report and World Development
Report.
Human Development World Development Report
Report(HDR) (WDR)
The UNDP gives a report based on The World Bank gives a report on the
HDI. basis of PCI.
The main criteria used by UNDP to The main criteria used by the World
publish Human Development Report are Bank to publish World Development
the income, education, and health of Report is its per capita income.
people.
It focuses on quantitative and qualitative If focuses only on quantitative aspect of
aspects of development. development.
It is a broader concept It is a narrow concept
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