QUIZ 1 ECO 261
QUIZ 1 ECO 261 (27 JULY 2018)
Question 2: Explain the conditions that led to a country experiencing economic growth without development. What are the impacts to the country? What are the remedies should be taken to rectify the condition of economic growth without development?
Economic growth is defined as an increase in a country’s real national income or output, or per capita income, or the increase in amount of goods and services produced by an economy from one period to another. It shows an increase in the value of goods and services produced by every sector, compromising the primary, secondary and tertiary sectors of the economy. It is the ability of the economy to produce a greater level of goods and services annually, which is shown by the outward shift of the production possibility curve. On the other hand, economic development involved a rise in the level of production along with an upward movement of a country’s entire socio-economic structure, in terms of income, savings, investment, technological advances, improved institutional quality and improvement in living standards. Economic development is usually indicated by an increase in citizen’s quality of life which is often measured by using the Human Development Index (HDI).
There are multiple conditions that can lead a country towards experiencing economic growth without development such as environmental issues, corruption issues and incarceration issues. Among the issues that are very widespread and serious in the world, the one that is brought up the most is the environmental issue. With rapid economic growth, the increasing human activity is the major reason for air pollution, especially on global warming, acid rain and smog. For example, widespread acid rain and smog comes from burning large amount of oil and coal. All kinds of automobiles, factories, industrial boilers, power plants as well as heating devices of households emit thousand tons of sulfur dioxide, nitrogen dioxide, carbon dioxide and ozone into the atmosphere every day. When sulfur dioxide and nitrogen dioxide dissolves in rainwater and increase rainwater acidity, acid rain is formed. Acid rain can acidify many lakes and streams, kills all kinds of fish, and also erode soil and make plants die. Currently, in the eastern United States, eastern Canada, as well as Europe, the problem of acid rain is severe. Furthermore, these gases compound with water and dust in the atmosphere and then form smog. Smog usually stays in the high populated areas and contributes to lung disease. The impact of this human caused pollution to contribute to economic growth is threatening people’s health and the environment. This will automatically reduce the longevity of one’s life which shows life expectancy, implied by a choice to live a long and healthy life which is in contrast with the goals of economic development in a country.
The global environment has been changing overtime due to rapid economic growth. Thus, to rectify the condition of economic growth without development and reduce the world’s environmental problems, it is important to control economic growth and grasp the limitations of economic growth and provide for the best institutional environment in which the positive effects of economic growth can be achieved and distributed to all equally. In conclusion, it is important for a country to have both economic growth and development as economic growth is important because it lowers poverty and, allows living standards to rise and more people to find jobs. While the benefits don’t always get distributed evenly, it is generally seen as a starting point for improving household incomes. Meanwhile, economic development is important because it provides improved quality of life, economy fortification, job creation and industry diversification that can contribute to the well-being of a country and its citizens.