1. What are the characteristics of underdeveloped countries?

Ans:       The main characteristics of underdeveloped countries are as follows:-

1. Economic characteristics:-

• Unable to fulfill basic needs like clothes, food, etc.
• Lack of nutritious
• High infant/ child mortality rate
• Less earning
• Low literacy rate

2. Demographic characteristics:-

• The high growth rate of the population
• High dependency ratio

3. Socio-cultural characteristics:-

• Traditional labor division
• High expenditure festivals

4. High dependence on agriculture:-

• More than 70% of the active labor force is in agriculture
• There is no use of scientific techniques in farming
• Traditional based

2. Explain the indicators of economic development.

Ans:     some popular and common indicators of economic development are briefly are following:-

1. Per Capita Income(PCI):-

Per capita income is the average income of the individuals of a country. It is the first and important indicator of the economic development of a nation. So, all countries used PCI to measure the economic position of a nation. PCI of Nepal is $1047 which belongs to a low middle developing country.

2. Physical quality of life index (PQLI):-

The value of PQLI is the next important indicator of economic development. It contains on a scale of 0-100. If its value crosses 50, then we suppose the country is a developed country and its value lies below 50, then we suppose the country a developing country. It is a composite index which includes,

• Literacy rate
• Life expectancy at birth
• Infant mortality rate

3. Human Development Index (HDI):-

United Nations Development Program (UNDP) had introduced it in1990. Its value ranges from 0 to 1. The closer value to 0 means low economic development and the closest value to 1 means high economic development. It includes,

• Per Capita Income
• Literacy rate
• Life expectancy at birth

4. Basic human needs:-

It was first developed by the World Bank. Some basis evaluates it which are following:-

• Food
• Clothes
• Shelter
• Health
• Education
• Employment

 

3. Explain the process of capital formation?

Ans:     It includes various processes where all the processes are interrelated to each other. Therefore, the process of capital formation is into three stages which are as follows:-

1. Creation of savings:-

Saving is residual amount of income after consumption.

Saving (S) = Income (Y) – Consumption (c)

1. Ability to save:-

High income – High saving – High capital formation

Low income – Low saving – Low capital information

2. Willingness to save:-

High willingness – High capital information

Low willingness – Low capital information

2. Mobilization of savings:-

• Transfer to bank and financial institutions
• Invest in business

3. Investment of savings in real capital:-

• We should invest savings in productive channels such as agriculture, manufacturing industries, tourism, health, etc.

4. Explain the types of unemployment?

Ans:     Unemployment is the situation of the labor forces who are willing to do and able to work but unable to find a job. Especially, there are two types of unemployment which are the following:-

1. Voluntary unemployment:-

It is the type of unemployment where a person is not willing to do and not able to do.

2. Involuntary unemployment:-

It is the type of unemployment where a person is willing, able, and searching for the job but unable to get the job. There are various types of involuntary unemployment. Some of them are as follows:-

a) Frictional unemployment:-

It is transitional unemployment due to employee’s move between jobs. For example, the period of looking for teaching for a teacher.

b) Seasonal unemployment:-

Seasons affect Employment. For example, farmers, the tourism sector, building sectors may be out of work during the offseason.

c) Structural unemployment:-

Because of the capital labor-intensive structure, many people became unemployed. Besides, International products and imports of everything also cause the unemployment problem.

d) Hidden/ disguised unemployment:-

Especially this type of unemployment exists in agriculture, seasonal work, etc.

Reference:-

Principles of Economics of Grade 11

BUDDHA PUBLICATION

We hope it helped you to know a little bit about meaning and indicators of economic development.