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Classical Economic Theory vs Modernization Theories
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Classical Economic Theory vs Modernization Theories

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Questions and Answers

What is the primary focus of Classical Economic Theory regarding production?

  • Specializing in goods a country can produce efficiently (correct)
  • Maximizing government intervention in the market
  • Promoting equal production capabilities across all sectors
  • Achieving balance between import and export rates

    • David Ricardo's theory of Comparative Advantage highlights which of the following?

  • A country should produce all goods it excels at
  • Global cooperation prevents trade imbalances
  • Only the most advanced economies can engage in international trade
  • Countries can benefit from trade even if one is more efficient in all products (correct)

    • How does the OTOP-Philippines initiative relate to Comparative Advantage?

  • It discourages local production to boost imports
  • It identifies and promotes specific products with local advantages (correct)
  • It mandates equal production from all regions
  • It focuses on providing foreign products to local markets

    • Which of the following is NOT a characteristic of the Classical Economic Theory?

    <p>Encouraging self-sufficiency in all nations</p> Signup and view all the answers

    What is the significance of the Global Division of Labor in Comparative Advantage Theory?

    <p>It allows countries to benefit from specializing in specific products.</p> Signup and view all the answers

    What role does the private sector play in the Classical Economic Theory?

    <p>It is the main actor responsible for production and market efficiency.</p> Signup and view all the answers

    What is a common misconception about Comparative Advantage Theory?

    <p>It suggests nations should always produce everything locally.</p> Signup and view all the answers

    Why is the Comparative Advantage Theory important for international trade?

    <p>It allows countries to achieve greater economic efficiency through specialization.</p> Signup and view all the answers

    What characterizes the Traditional Society stage in the Linear Stages Theory?

    <p>Dependence on agriculture with no technological access</p> Signup and view all the answers

    Which stage follows the Take-off Stage in the Linear Stages Theory?

    <p>Drive to Maturity</p> Signup and view all the answers

    What is a primary feature of the Drive to Maturity stage?

    <p>Diversification of industry</p> Signup and view all the answers

    What is the main transition that occurs in the Stage of Mass Consumption?

    <p>Declining need for basic necessities</p> Signup and view all the answers

    How does the Linear Stages Theory view economic development?

    <p>It is intended to take place in a capitalist context.</p> Signup and view all the answers

    What economic focus is prevalent in the Traditional Society stage?

    <p>Basic agricultural production</p> Signup and view all the answers

    Which of the following stages indicates a self-sustaining economic growth?

    <p>Take-off Stage</p> Signup and view all the answers

    Which characteristic best describes societies in the Stage of Mass Consumption?

    <p>Diverse industry and luxury demand</p> Signup and view all the answers

    What is the primary focus of modernization theories as described?

    <p>Transition from traditional economies to a service economy</p> Signup and view all the answers

    Which criticism is associated with linear stages theory in modernization?

    <p>External forces can hinder development efforts</p> Signup and view all the answers

    In the context of dualistic economy, which characteristic does the subsistence sector NOT typically exhibit?

    <p>High income elasticity of demand</p> Signup and view all the answers

    What does the transition described in the dualistic economy refer to?

    <p>Migration of surplus labor to modern capitalist structures</p> Signup and view all the answers

    Which descriptor aligns with the 'traditional agricultural sector' in the context of modernization theories?

    <p>Low growth opportunities</p> Signup and view all the answers

    Modernization theories emerged prominently in which decade?

    <p>1950s</p> Signup and view all the answers

    What potential outcome do proponents of modernization theories often overlook?

    <p>Importance of local cultural practices</p> Signup and view all the answers

    What is a common critique regarding the assumption of modernization theories?

    <p>They assume uniform progress across different nations</p> Signup and view all the answers

    What is a key principle of ecological sustainability?

    <p>Progressing development without significant environmental destruction</p> Signup and view all the answers

    What is the main focus of the Indigenous People’s Rights Act?

    <p>Recognizing and protecting the rights of indigenous cultural communities</p> Signup and view all the answers

    Which approach gained greater awareness of gender's role in development during the 1980s?

    <p>Gender and Development</p> Signup and view all the answers

    What requirement was mandated regarding the Gender and Development initiatives in the Philippines?

    <p>At least 5% of the total budget must be allotted to it</p> Signup and view all the answers

    What is a characteristic of Neo-Liberalism as discussed in the 2000s?

    <p>Perception of state involvement as detrimental to development</p> Signup and view all the answers

    Who are considered the main actors in a Neo-Liberal framework?

    <p>Non-governmental organizations and private sector entities</p> Signup and view all the answers

    What societal aspect is primarily examined by Gender and Development?

    <p>The roles, responsibilities, and expectations assigned to genders</p> Signup and view all the answers

    What does ecological sustainability emphasize for future generations?

    <p>Future livelihoods should not be threatened by current development</p> Signup and view all the answers

    What model suggests that Third World underdevelopment is due to unequal international capitalist relationships?

    <p>Neocolonial dependence model</p> Signup and view all the answers

    What is a significant consequence of the Tragedy of the Commons?

    <p>Depletion of shared resources</p> Signup and view all the answers

    Which theory emphasizes the role of historical advice from developed nations in the underdevelopment of the Third World?

    <p>False paradigm</p> Signup and view all the answers

    Which of the following is NOT considered a basic need according to the Basic Needs Approach?

    <p>Economic growth</p> Signup and view all the answers

    Who coined the term ‘ecosystem’ and promoted a holistic understanding of ecological interrelationships?

    <p>Tansley</p> Signup and view all the answers

    What does the Dualistic-development thesis primarily highlight?

    <p>The divergence between rich and poor nations</p> Signup and view all the answers

    Which approach suggests focusing on the minimum requirements for a decent life?

    <p>Basic needs approach</p> Signup and view all the answers

    What is the primary concern of Neo-Malthusian theories?

    <p>Controlling population and resource use</p> Signup and view all the answers

    Which figure is associated with the concept of the Population Bomb?

    <p>Paul Ehrlich</p> Signup and view all the answers

    What does the Basic Needs Approach advocate for in terms of government policies?

    <p>Addressing the needs of the poorest</p> Signup and view all the answers

    Study Notes

    Classical Economic Theory

    • Developed in the 1800s with comparative advantage theory
    • Focuses on the private sector as the main actor in a market economy.
    • Advocates for countries to concentrate on producing and selling goods they have a comparative advantage in due to their assets (land, resources, labor).
    • This leads to efficient production and a global division of labor.
    • David Ricardo, a British economist, provided an example of how England and Portugal could both benefit from comparative advantage, even if England was better at producing both cloth and wine.
    • Examples of comparative advantage in action include the One Town, One Product (OTOP) program in the Philippines, which promotes entrepreneurship and job creation by focusing on local products with a comparative advantage.

    Modernization Theories

    • Developed in the 1950s with the Linear Stages Theory (A Non-Communistic Manifesto)
    • Proposed by Walt Whitman Rostow, an American economist.
    • Views development as a process of moving from traditional agricultural societies to a modern, industrial, and service-focused economy in a capitalist context.
    • Outlines five stages of economic development: The Traditional Society, The Preconditions for Take-off, The Take-off Stage, The Drive to Maturity, and The Stage of Mass Consumption.

    Dualistic Economy

    • Developed in the 1950s
    • Describes the coexistence of a traditional, overpopulated rural subsistence sector with a modern industrial sector within a developing economy.
    • The traditional sector is characterized by low profitability, low income elasticity of demand, limited growth opportunities, and subsistence farming.
    • Development occurs when surplus labor moves from the traditional sector to the modern sector.

    Dependency Theories

    • Developed in the 1960s with the International Dependence Revolution.
    • Focuses on the role of unequal power relationships between developed ("core") and developing ("periphery") countries.
    • Three main streams of thought within the theory:
      • Neocolonial dependence model: Poverty in developing countries is due to historical exploitation by developed nations.
      • False paradigm: Developed countries provide faulty advice and resources that hinder development in developing countries.
      • Dualistic-development thesis: Rich and poor nations, and rich and poor individuals within those nations, experience increasing divergence.

    Basic Needs Approach

    • Developed in the 1970s.
    • Focuses on providing basic necessities like health, nutrition, literacy, food, water, sanitation, and housing to improve the lives of the poorest people.
    • Recognizes ecological sustainability as essential for future livelihoods.

    Ethno Development

    • Promoted in the 1980s.
    • Focuses on protecting and promoting the rights of indigenous peoples and cultural communities.
    • Examples include the Indigenous Peoples’ Rights Act, which safeguards the rights of indigenous communities in the Philippines.

    Gender and Development

    • Emerged in the 1980s.
    • Highlights the role of gender in development and advocates for gender equality and empowerment.
    • This approach involves implementing policies that integrate women more significantly into development processes.
    • Examples include mandatory gender-focused budgeting policies in some countries, such as the Philippines, which dedicates at least 5% of its budget to gender-related initiatives.

    Neo-Liberalism

    • Became a dominant force in the 1980s and continued into the 2000s.
    • Promotes the role of the private sector, non-governmental organizations (NGOs), and individuals in development.
    • Views state intervention as detrimental to development, advocating for a limited role for the government, primarily focused on providing a regulatory framework for businesses.

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    Description

    Explore the key concepts of Classical Economic Theory and Modernization Theories in this engaging quiz. Understand how comparative advantage and the Linear Stages Theory evolved to shape economic perspectives in the 19th and 20th centuries. Test your knowledge of influential economists and real-world applications.

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