Economic development has been defined in various ways. Generally, it refers to the economic well being of a nation. Economic development is the process whereby the real per capita income of a country increases over a long period of time subject to stipulations that the number of people below an absolute poverty line does not increase, and that the distribution of income does not become more unequal. In fact, economic development means a sustainable increase in the standard of living. Therefore, it refers not only to increase in per capita income but also the alleviation of poverty and reducing the gap between the rich and the poor. Moreover, it also incorporates other social issues such as, education, health, freedom, rights as well as environmental protection.
Generally, there are two fundamentally different ways of organizing an economy. Market and Command Economy. A market economy is one in which individuals and private firms make the major decisions about production and consumption. In a market economy, decisions are made in markets, where individuals and enterprises voluntarily agree to exchange goods and services, usually through payments of money. A system of prices, of markets, of profits and losses, of incentives and rewards determines the what (profits), the how (costs) and the form whom (reward for inputs). [Laissez-faire economy] A command economy is one in which the government makes all important decisions about production and distribution. In a command economy, the government owns most of the means of production; it also owns and directs the operations of enterprises in most industries; it is the employer of most workers and tells them how to do their jobs; and it decides how the output of the society is to be divided among ...
Comments
Post a Comment