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Problems in Economic Development 's - Assignment Example

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This is mainly in the coastal region as they have access to both internal and international trade. Therefore, population growth is a key factor to enhancing economic development.
c) According to (Easterly,…
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Download file to see previous pages... However, extensive stage of growth is where by growth in the economy is caused by intensive factors such as improved technology that help to increase production. As a result, economic growth is achieved. Developed countries experience this type of growth as they try to enhance production through improving technology.
3. a) Reversal of fortunes refers to the reversal of income distribution from the 1500 to the present. The richest civilizations in 1500 were the Aztec and the Incas. While the lowest civilizations were in North America, New Zealand and Australia, which were less, developed. However in present day, the US, Canada and New Zealand are richer than countries occupying territories of Mughal, Aztec and Incas. Therefore shows the reversal of fortune.
b) The Simple Geography Hypothesis states that the time invariant effects of geographic variables, like climate and disease, on work effort, productivity, and output. However, this is contrary to the reversal of fortune, as countries that were prosperous in 1500 should still be prosperous today, as geographical features do not change.
c) Europeans established these two institutions in their colonies. One was the extractive institutions, which concentrate power in the hands of small groups of elites and produce a high threat of expropriation for the mainstream population. The other was the institution of private property that are important for economic performance. They were established in the Aztec and the Incas empires.
4. a) Microfinance Institutions characteristics include: They offer small loans to start businesses. They also offer loans at lower rates than other financial institutions. Finally, the repayment dates are fixed and no negotiations are made unlike for other moneylenders.
b) Microfinance Institutions have been successful to some point as people have started businesses and purchased larger durable goods that they would not have bought without such ...Download file to see next pagesRead More
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