Answer to Question #115842 in Economics for Nayanjyoti Sarma

Question

Define Economic development. Explain the various indicators of economic Development.

Answer 1

Economic development is the focus of local, state, and federal governments to improve the citizen’s living standards through the support of creation of new ideas, job creation, creating higher wealth, and overall betterment of quality of citizens’ lives. It is often defined based on four key indicators; Poverty level, Gross Domestic Product Per capita Income, Operational Pattern, and Social and Health Indicators.

The GDP is a fiscal value of a nation’s output of services and goods and it shows the strength of the country’s economy. A higher GDP per capita signifies a higher stage of economic development.

The poverty level for countries with a low GDP per Capita implies a higher proportion of individuals living in poverty. Low poverty level means that individuals accumulate more wealth.

Operation pattern shows a country’s economic backwardness. Countries whose most national income or national output is achieved from the primary sector (forestry, agriculture, mining, animal husbandry) are poor and underdeveloped.

Social and health indicators also indicate economic development. They portray the impact of poverty in poor nations. Infant mortality rate is high while life expectancy as birth is low. The percentage level of illiteracy in the total population is high and educational achievement of most individuals is modest showing low rates of investment in human capital.