Growth and Development Strategies

What is Diversification?

• Diversification is putting all your money in one investment
• Protectionist measures that are implemented to help a country become independent from imports from abroad.

• The strategy of increasing the variety of goods and services that a country produces and exports.

• Any policy that supports domestic industries so that they become exporting industries.

A type of economy that can bounce back from external shocks more easily.

What is Import substitution?

• Refers to protectionist measures that are implemented to help a country become independent from imports from abroad.

• Is any policy that supports domestic industries so that they become exporting industries.

• Is the strategy of increasing the variety of goods and services that a country produces and exports.

Social enterprises can be classified as a for-profit, but not non-for-profit organizations.

• True

• False

What are three examples of Market-Based Policies?

• Trade liberalisation

• Privatisation

• Deregulation

• Transfer Payments

What are two strengths of Privatisation and Deregulation

• Economic growth

• Allocative efficiency

• Increase employment opportunities

• May reduce equity.

What are Redistribution policies?

• Measures that are taken by governments to reallocate income and wealth more equitably in society.

• A form of Interventionist Policies.

• Goods and services that are beneficial for those who consume them and have positive externalities for society.

Answer explanation

Merit Goods are goods or services that are beneficial for those who consume them and have positive externalities for society.

Merit Goods are also a type of Interventionist Policies.

Foreign Direct Investment (FDI) is a ​long-term ​investment in a ​foreign country by multinational corporations.

• True

• Pickles

Answer explanation

If you picked Pickles, I thank you for committing to my attempt at being comedic.

Which of the following is NOT a strength of Foreign Direct Investments (FDIs)?

• Economic growth and employment.

• Efficiency and productivity.

• MNC dominance.

• Improved infrastructure.

• Skills and knowledge transfer.

Answer explanation

Multinational Corporations (MNC) such as Apple, IKEA, and Samsung, while being powerful sources of economic growth in the global economy, they have the ability to move their profits made in outsourced countries in order to pay shareholders and other groups back at home. In essence, less reinvestment will occur in the recipient country than if those firms were domestically owned.

Food aid is given to reduce hunger during times of emergency, but not for longer-term needs.

• True

• False