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Flashcards in Market oriented strategies Influencing Growth And Development Deck (7)
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1

What are market oriented strategies?

Market oriented strategies to focus of removing government intervention to enable a free market to function more efficiently

2

What factors can influence growth and development? (5)

1. Free trade
2. Free market supply side policies
3. Removal of government subsidies
4. Micro finance
5. Floating exchange rate

3

How does free trade enable growth and development
How does it prevent this

Enables countries to specialise in good where they have lower opportunity costs leading to lower prices

However free trade may mean developing countries only focus on primary products which limits development long term

4

How do free market supply side policies enable growth and development

How do they prevent it

Policies such as privatisation or deregulation improves efficiency

However deregulation may increase inequality and privatisation may lead to creating monopolies.

5

How does removal of government subsidies improve growth and development

How does it not

Government subsidies for firms encourage inefficiency

However depends on firm, if a firm create positive externalities then a subsidy can help

6

How does micro finance improve growth and development

How does it not

Helping people on very low incomes to gain access to credit

However depends on how Wel it is managed and directed

7

How does a floating exchange rate improve growth and development

How does it not

May cause temporary depreciation and cost push inflation. But it will increase competitiveness of export sector

However there is no guarantee it will solve e countries underlying problems