Development and Economic Indicators Quiz

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Questions and Answers

What is a major limitation when using total income to compare national development?

It hides income disparity. (correct)

It considers only public facilities.

It does not account for population size.

It excludes non-economic factors.

Which country classification indicates a high-income status according to the World Development Report?

Per capita income of $2,000 per annum.

Per capita income of $49,300 per annum or above. (correct)

Per capita income of $10,000 per annum.

Per capita income of $3,000 per annum.

What does the Human Development Report primarily focus on?

Education, health, and income. (correct)

Environmental sustainability.

Government spending and policies.

Income distribution only.

Which of the following is NOT considered a public facility?

Housing market. Signup and view all the answers

What does national development ultimately seek to ensure for all individuals?

Fair and just paths for all. Signup and view all the answers

What aspect is considered essential for assessing the quality of life beyond income?

Health and education facilities. Signup and view all the answers

What does sustainability of development primarily refer to?

Meeting present needs without compromising future generations. Signup and view all the answers

What key factors are considered in comparing different countries according to the content?

Income, literacy rate, and infant mortality rate. Signup and view all the answers

What is one of the main criteria used by the World Bank for classifying different countries?

Average income per capita Signup and view all the answers

Why is Body Mass Index (BMI) not applicable for growing children?

Children's body compositions vary significantly with age Signup and view all the answers

Which factor is considered essential for the dignity of women in the workforce?

Job security and safety Signup and view all the answers

What defines sustainable development?

Development that ensures future generations meet their needs without compromising the environment Signup and view all the answers

What are limitations of using average income as a measure of development?

It only reflects economic performance Signup and view all the answers

Which example illustrates that development can be viewed differently based on individual needs?

The construction of a dam Signup and view all the answers

What is a key aspect of development that often gets overlooked when based only on economic measures?

Environmental sustainability Signup and view all the answers

Which of the following factors might deter women from taking up jobs?

Job location Signup and view all the answers

What is one primary function of Self Help Groups (SHGs)?

To organize rural poor into collectives Signup and view all the answers

Why can informal sources of credit be detrimental to borrowers?

They have no set repayment schedules Signup and view all the answers

What is a benefit of formal sources of credit compared to informal sources?

Better service conditions Signup and view all the answers

How do Self Help Groups benefit their members beyond financial savings?

They foster community discussion on various issues Signup and view all the answers

What is a common misconception about loans from moneylenders?

They provide loans without collateral Signup and view all the answers

What role do banks play in economic development?

They enable formal credit accessibility and support development Signup and view all the answers

What can happen if borrowers rely heavily on informal credit sources?

They often find themselves in unmanageable debt Signup and view all the answers

Why is it important for banks to increase their lending facilities in rural areas?

To improve access to credit for the rural poor Signup and view all the answers

What has been a significant factor in stimulating the globalization process?

Rapid improvement in technology Signup and view all the answers

Why did the Indian government impose barriers to foreign trade after independence?

To protect domestic industries from foreign competition Signup and view all the answers

What was one of the main reasons for the liberalization of trade policies in India since 1991?

To encourage competition among local producers Signup and view all the answers

How did communication technology contribute to globalization?

By enhancing connectivity and reducing the time for information exchange Signup and view all the answers

What event in the early 1990s prompted India to reconsider its trade barriers?

The economic crisis of 1990-91 Signup and view all the answers

What example illustrates the benefits of technological improvements in globalization?

Use of container shipping for trade Signup and view all the answers

What role did the WTO and IMF play in India's trade policy changes?

They supported India's efforts to reduce trade barriers Signup and view all the answers

What is NOT a consequence of removing barriers on foreign trade and investment?

Adequate protection for nascent industries Signup and view all the answers

What are the main components that comprise the terms of credit?

Interest rates, documents required, collaterals, and loan repayment mode Signup and view all the answers

How does formal sector credit differ from informal sector credit?

Formal sector credit terms are known to be genuine unlike informal sector credit. Signup and view all the answers

What is a potential consequence of high borrowing costs for an individual?

Debt traps leading to financial hardship Signup and view all the answers

What role does the Reserve Bank of India play in the banking sector?

It supervises loan distribution and cash balances of banks. Signup and view all the answers

Which of the following best describes the relationship between credit and economic development?

Credit can drive economic development by enabling enterprises. Signup and view all the answers

Which situation illustrates a negative aspect of credit?

A farmer facing challenges with an agricultural loan Signup and view all the answers

What does the phrase 'DO CO MO internet' relate to in the context of credit?

The essential components involved in terms of credit. Signup and view all the answers

Why is there a need for banks and cooperatives to increase lending in rural areas?

They currently meet only half of the total credit needs. Signup and view all the answers

Study Notes

Development Goals

Development varies among individuals and can lead to contradictory goals, e.g., dam construction may benefit some while harming others.
National development should focus on fairness and justice for all, considering both total and per-capita income.
Per-capita income classification by the World Bank: high-income countries (above 49,300)andlow−incomecountries(below49,300) and low-income countries (below 49,300)andlow−incomecountries(below2,500) as of 2019.

Multidimensional Measures of Development

Development encompasses not just income but also indicators like infant mortality, literacy, and attendance ratios.
Public facilities—healthcare, education, and Public Distribution System (PDS)—are essential for quality living.

Human Development

The Human Development Report by UNDP emphasizes education, health, and income, advocating for sustainable development that meets present needs without jeopardizing future generations.

Sustainable Development

Sustainable development must avoid environmental damage and reckless exploitation of non-renewable resources, ensuring future generations' needs are met.

Credit

Credit can have dual outcomes: it can empower borrowers or lead to debt traps depending on circumstances and risk assessment.
Terms of credit include interest rates, documentation, collateral, and repayment methods; these differ widely between formal (banks, cooperatives) and informal sectors (money lenders, relatives).

Formal vs. Informal Credit

Formal credit offers better terms and supervision from organizations like the Reserve Bank of India, while informal credit often exploits borrowers with high-interest rates.
Self Help Groups (SHGs) empower rural poor, especially women, fostering savings and decision-making.

Importance of Banking

Banks and cooperatives need to expand credit facilities in rural areas to enhance economic development and decrease reliance on informal credit.
Reserve Bank of India functions include regulating the banking sector to ensure stability and fair practices.

Globalization and Development

Communication technology significantly influences globalization, enhancing trade by improving transport and information exchange.
Post-1991, India liberalized trade to boost competitiveness among local producers, facilitated by economic crises and international support from organizations like WTO and IMF.

Barriers to Foreign Trade

Post-independence, the Indian government set trade barriers to protect nascent industries and prevent foreign competition, which were later reduced for economic improvement.

Summary of Important Questions

Study the impact of credit in economic development, the role of banks, terms of credit, and the significance of formal credit over informal sources.
Review globalization's factors, the government's protective postures, and how technology drives the globalization process.

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Description

This quiz explores various concepts of development and the indicators used to measure economic progress. It discusses the perception of development, the role of public facilities, and key metrics from the Human Development Report. Test your understanding of how economic indicators reflect disparities and contribute to a nation's progress.