Sukma Patria AW(125020107121017)

Chapter 4

Questions

1. What are some commond characteristic from LDCs ? Which of this characteristic are causes and accompaniment under developing?

2. What are the major characteristic of economic and political institution in low income economics?

3. What is the dual economic aare all LDCs characteristic by economic dualism?

Answer

1. Characteristic from LDCs - Income Distribution

Technology and capital levels

Saving rates

Export pattern

International Trade Dependence

Population growth

Literacy

Unskill labor force

Low saving rates

Relative size of agriculture and industry

Causes = International trade dependence because the developing country commodity and

market limited relative ( restrictive market )

Impact = Export pattern.

2. Major characteristics of economic and political institution in low income economies :

Personality politics, lack transparacy, rent seeking and insecure property rigt

Predatory rule ( nopatrimonial )

Expand social overhead capital ( need )

Material indocement

Institutional fondation of economy is degrades

Land, capital and insurance are poor developed

3. Dual economic is in less developing country

A dual economy is one in which a labor-intensive, subtitance, peasant agricultural sector exists side by side with a capital-intensive, consist of modern manufacturing snd processing operations, mineral extration and plantations agriculture. The modern sector produces for the market, use reproduable capital and new technology and hires labor commercially. No, not at all but most of them.

Chapter 5

1. Is Ricardian classical economic theory applicable to LDCs?

2. Choose one developed country (or one LDC that Rostow says has already experienced

takeoff). How well does Rostows stage theory explain that countrys

economic growth?

United States, Rostow characteristic that mention that US is already experienced takeoff is their economic growth is already 5-10% , Their industrial and manufacturing sectors grow rapidly, and political, social views is already modern and fastly to response or adapt. Rostow theory is clear enough to explain a country experience using his theory because it mention the country already facing take off when their economic growth are 5%-10%.

3. (17) What is the neoclassical theory of economic development? Theory of economic

growth? What are the policy implications of the neoclassical theory of development

and growth? How effective have neoclassical policy prescriptions been for

stimulating economic growth in developing countries?

Neoclassical theory in economic development is when the price is made by market, because the supply in demand in the market, market is as price maker. Theory of economic growth when increase of goods and services by an economy in over time. There are no government intervention in neoclassical theory, it makes the economic growth can increase or decrease depend on the market price when producer supply and the buyers demand making deal and the welfare is achieve so economic growth can be increase. Its not effective enough because there are no government intervention, so will have big impact between the rich and the poor because the poor people cant afford to buy but the rich people can collect all and satisfied their utility/ welfare achieve. By that in developing country there must be government intervention in making policy so the gap will not have wider, like government giving subsidy, BLT ( in Indonesia) so the poor people also can achieve their welfare, and giving them support like giving them a loan or chance to make small medium enterprises so the economic growth in developing country can also increase