THEME 4 - Topic 6 - Promoting Growth & Development

Question 1

Define market-orientated strategy

Answer 1

A strategy for encouraging development that relies on enabling markets to work effectively.

Question 2

Give 3 examples of market-orientated strategies

Answer 2

1. Trade liberalisation
2. Floating ER
3. Privatisation

Question 3

Define interventionist strategy

Answer 3

A strategy for stimulating development that focuses on addressing market failure.

Question 4

Give 3 examples of interventionist strategies

Answer 4

1. Protectionism (Import substitution Industrialisation)
2. Health, education, transport
3. Buffer-stock system

Question 5

Name 3 other methods of development strategies

Answer 5

1. Aid
2. Debt relief
3. Fair trade

Question 6

Define a tariff

Answer 6

A tax imposed on goods and is used to restrict imports and raise revenue for the government.

Question 7

Define FDI

Answer 7

Investment undertaken in 1 country by companies based in other countries.

Question 8

Define MNC

Answer 8

A company whose production activities are carried out in a number of countries.

Question 9

State the 3 basic motivations for MNCs

Answer 9

1. Market seeking
2. Resource seeking
3. Efficiency seeking

Question 10

Define microfinance

Answer 10

Schemes that provide finance for small-scle projects in LDCs.

Question 11

What is the purpose of the Grameen Bank?

Answer 11

To bridge the savings gap (Harrod-Domar Model)

Question 12

Define buffer-stock

Answer 12

A scheme intended to stabilise the price of a commodity by buying excess supply in periods when supply is high, and selling when supply is low.

Question 13

Name the 6 types of official development assistance (aid)

Answer 13

1. Grants
2. Loans
3. Tied aid
4. Bilateral aid
5. Multilateral aid
6. Food aid

Question 14

Define official development assistance (ODA)

Answer 14

Aid provided to LDCs by countries in the OECD.

Question 15

What % of GNI should be devoted to ODA?

Answer 15

0.7%

Question 16

Define IMF

Answer 16

A multilateral institution that provides short-term financing for countries experiencing balance of payments problems.

Question 17

Define World Bank

Answer 17

A multilateral organisation that provides financing for long-term development projects.

Question 18

Define GATT

Answer 18

Precursor of the WTO, GATT organised a series of ‘rounds’ of tariff reductions.

Question 19

Define WTO

Answer 19

A multilateral body responsible for overseeing the conduct of international trade.

Question 20

Define HIPC initiative

Answer 20

An initiative launched in 1995 to provide debt relief for heavily indebted poor countries.

Question 21

What were the 3 headings under the Washington Consensus?

Answer 21

1. Fiscal discipline
2. Market liberalisation and privatisation
3. Trade liberalisation and the encouragement of foreign investment

Question 22

Define fair trade schemes

Answer 22

Schemes that set out to ensure that small producers in LDCs receive a fair price for their products.