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Economic Development Lesson 1

This document discusses the key concepts of economic development including the basic economic problems faced by all nations, how goods are produced and distributed based on different economic systems, and the meaning and classifications of economic development and growth. The three basic economic problems are what to produce, how to produce, and for whom to produce. Countries are classified as highly developed, intermediate/developing, or underdeveloped based on their gross national product. While growth can be measured, development involves both economic and non-economic changes that improve human conditions.

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Stanley Aquino
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768 views18 pages

Economic Development Lesson 1

This document discusses the key concepts of economic development including the basic economic problems faced by all nations, how goods are produced and distributed based on different economic systems, and the meaning and classifications of economic development and growth. The three basic economic problems are what to produce, how to produce, and for whom to produce. Countries are classified as highly developed, intermediate/developing, or underdeveloped based on their gross national product. While growth can be measured, development involves both economic and non-economic changes that improve human conditions.

Uploaded by

Stanley Aquino
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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REAL CONCEPT OF

DEVELOPMENT
LESSON 1 | ECONOMIC DEVELOPMENT
“A better quality of life has been the objective
of societies and nations.”
Basic Economic Problems
- Every nation, rich or poor, has economic problems.

- There are more serious and widespread in poor countries.

- Economic problems exist because:


◦ (1) Resources are limited; (2) Human wants are unlimited.
Basic Economic Problems
- Three Basic Economic Problems:
1. What goods to produce and in what quantities?
2. How to produce the goods?
3. For whom the goods are produced?
What goods are to be produced?
- It is not really possible to produce all the goods that
people want for their satisfaction.

- a system of priority has to be established.

- Basic needs or people are given top priority.


What goods are to be produced?
CAPITALISM
- Goods which command the highest price and profit.

COMMUNISM
- for service and not for profit, goods produced according to
the needs of the people.
What goods are to be produced?
SOCIALISM
- combination of capitalism and socialism. Production of
goods is based on needs and profits.
How are the goods produced?
- The ideal situation is to produce the goods with the most
efficient method.

- This involves machines, technology, management, and


skills.

- Many developing countries are deficient on these.


For whom are the goods produced?
- The distribution of goods is determined by the economic
system:

1. CAPITALISM
- Allocated in the market.
For whom are the goods produced?
2. COMMUNISM
- goods are distributed according to the needs of the
people. It is a classless society. There is equality.
For whom are the goods produced?
3. SOCIALISM
- both the market and the state determine the distribution
of goods.
- Essential and strategic goods are being allocated by the
government at cost.
- Goods that are given to the private sector are sold for
profit.
The Meaning of Economic
Development
- It is a progressive process of improving human conditions,
such as the reduction or elimination of poverty,
unemployment, illiteracy, inequality, disease and
exploitations.
The Meaning of Economic
Development
- involves both economic factors (capital, technology, and
market) and non-economic factors (culture, religion,
government, education)
Classifications of Countries
- The economy of a country is measured by its Gross
National Product (GNP).

- The basis of comparison is the economy of highly


developed countries.
Classifications of Countries
Highly Developed Countries (USA, Canada, Japan, Australia)

Intermediate/Developing Countries (Argentina, Spain,


Poland, Saudi Arabia)

Underdeveloped/Less developed Countries (India,


Philippines, Vietnam, Kenya)
Development and Growth
- Development is a progressive and dynamic process.
- Growth is the result of a process.
- Therefore: growth is the product of development.
Development and Growth
- Economic growth is visible and measurable.

Examples: roads, vehicles, houses, buildings, hospitals,


banks, schools, etc.
Development and Growth
- Development means more than imposing buildings,
beautiful houses, elegant cars, money or modern machines.

- It includes fundamental changes in society, ways of life,


values and institutions.

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