Tag: fundamental of economic development

The economic reforms have failed to keep fiscal deficits to the targeted levels, fully implement industrial deregulation and fully open the economy to trade.

The capital formations really signify a very significant part of economic development. This earnings manufacture and growth of more capital goods, such as machines, tools, factories, buildings, raw materials, fuels, etc., which are to be additionally used in producing more goods. 

Resources creation does not mean enlarge in money capital, but it actually refers to increase in physical capital, i.e., machinery, factories, transport equipment, bridges, power projects, dams, irrigation systems, etc. 

To sum up, capital formation implies the making of real assets. Low per capita real profits is one of the most defining qualities of developing economies. 

The correct answer is C.

The government controls economic activities under centrally planned economies A centrally planned economy, also known as a command economy, is an economic system in which a central authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products. Centrally planned economies are different from market economies in which such decisions are traditionally made by businesses and consumers.

In economic terms, constant returns to scale is when a firm changes its inputs with the results being exactly the same change in outputs (production). In other words, if a firm increases its inputs they will see a proportional increase in production (or outputs). 

The similar can be true if a firm decreases its inputs and that results in a proportional decrease in outputs. Constant returns to scale take place when increasing the number of inputs leads to an equivalent increase in the output.

Thus, the correct option is A.

If one unit of labour and one unit of capital give 200 units of output, two units of labour and two units of capital give 400 units of output and 5 units of labour and five units of capital give 1000 units of output then this is a case of Constant Returns to Scale.Constant Returns to Scale can be defined as a situation when an increase in inputs cause proportional increase in output.

Monopolies and Restrictive Trade Practices act, 1969 was enacted to prevent the concentration of economic power to common detriment, control of monopolies, and prohibition of monopolistic and restrictive trade practices and matters connected therewith. But after the New economic reforms, liberalization, privatization, and globalization it was necessary that there must be competition in the market for the survival of the fittest. Therefore, the MRTP Act 1969 was replaced by Competition Act in year 2002. 

In the data, as the factor increases by 1, the output increases by 15 consistently. This constant ratio of output to factor (15/1 = 30/2 = 45/3 = 60/4 = 75/5 = 15) indicates constant returns to scale.

Quantitative methods of credit control affects indiscriminately all sectors of the economy.Quantitative measures to control credit are also known as general measures. Quantitative instruments of control credit are those instruments which focus on overall supply of money in the economy. These measures are used in a manner such that overall supply of money in the economy is reduced during inflation and increased during deflation.

After a certain period of time, the demand of the people for agricultural output falls and for industrial output rises. Since the coming of industrialization, the demand for industrial products are risings which is a result of modern standard of living from the traditional one so people prefer industrial product over agricultural product.