Therefore, another requirement of economic development is to maintain stability by avoiding inflationary rise in the price level so as to check mis-allocation of resources along with its other evils. Obstacles or Constraints on Economic Development: Mixed economy- it is that type of economic system which exhibits the features of both market and centrally planned economy.
All these social forces are obstructing the path of development of these underdeveloped countries. Thus, over-population results poverty, inefficiency, poor quality of population, lower productivity, low per capita income, unemployment and under-employment and finally leads the country toward under development.
Thus this poor performance of agricultural sector is another major obstacle in the path of economic development of these underdeveloped countries. Growing concentration of income and wealth in the hands of few and political influence generally protects the richer section from higher rates of taxation and thereby the tax burden ultimately falls Different economic factors essay on the middle class and poorer sections of the society.
Social institutions, habits and attitudes are influencing the productive activities and expenditure patterns substantially, especially in the underdeveloped countries.
Thus due to market imperfections, the underdeveloped countries fail to reach the optimum production function due to lack of optimum allocation of resources. When individuals or businesses borrow money, they repay the amount they borrowed plus interest.
Most of the underdeveloped countries are facing the problem of rapidly growing population which hinders its path of economic development.
Huge volumes of information can be securely shared by means of databases thereby enabling vast cost reductions, and improvements in service. Simon Kuznets has rightly observed that during the period of modern economic growth, the share of agriculture and agro-based industries in aggregate output GDP has recorded a sharp decline, while the shares of manufacturing industries, public utilities and certain service groups like professional, government etc.
Removal of market imperfections is considered a very important pre-requisities for economic development as such imperfections create a lot of obstacles in the path of economic development of underdeveloped countries. In a global environment it is important that business strategies are designed keeping in mind the social and cultural differences that vary from country to country.
Existence of a stable strong, efficient and honest government machinery is considered another pre-requisite for economic development.
Here the problem has to be tackled in two ways. Growing population also results food problem, unemployment problem which forced the country to divert its scarce resources to meet such crisis. If you notice a trend towards less demand for your products, for example, look into why that is and make adjustments such as changing the product to increase its demand, or if the market is saturated with the product, begin working on a new one.
In order to attain a self-generating growth of the economy, the people of the country must have a strong and positive willingness to attain such development.
Stores are paying more per orange, so they raise their prices, too. Inflation is measured by indexes such as the Consumer Price Index, which tracks prices continuously.
In recent years, economic planning has been playing an important role in accelerating the pace of economic development in different countries.
Agriculture dominates the economy of most of the underdeveloped countries like India as it is contributing the major share of their GDP.
Thus education is working as an engine for economic development. Again, the modern economic growth has also paved the way for the emergence of joint stock companies and giant corporations in modern industrial set-up.
Inefficient and underdeveloped human resources are also considered another major obstacle towards economic development of underdeveloped countries. All these have led to diversion of resources and initiatives from developmental to non-developmental ends.
Due to abundant labour supply and scarcity of capital, such technologies become unsuitable for these countries. The people of a country must desire progress and their social, economic, legal and political situations must be favourable to it.
Moreover, the structural transformation of the economy indicates a shift away from agriculture to non-agriculture activities and from industry to services along with a change in the scale of productive units, and necessary shift from personal enterprises to impersonal organization of economic firms along with a change in the occupational status of labour.
People who were job hunting but gave up are not counted. When interest rates are higher, many investors turn to more secure vehicles, such as certificates of deposit, but when rates go down, some investors are willing to take on more risk through investments that lack government protection.
In these countries, the rate of savings is low due to low per capita income and higher marginal propensity to consume. The corporate tax structure in Delaware, for example, causes many firms to set up headquarters in that state, even though the primary business may be far across the country.
A whole hearted effort should be made to utilise its available limited resources in a most efficient and dynamic manner to its maximum extent. Legal factors - These factors that influence business strategies are related to changes in government laws and regulations.
But, the generally accepted types of inflation are demand-pull, cost-push and monetary. Another pre-requisite for economic development is to raise the capital absorption capacity of underdeveloped countries as they mostly suffer from lack of such capacity due to non-availability of co-operant factors.
When unemployment is high, employees want to hold tight to their jobs. Restaurants that use lemons for drinks, dishes and garnishes will save money on the cases of lemons they buy.
All these imperfections have resulted low level of output and low rate of productivity per worker. This is one of the main concerns over the initiatives to raise the U.Example Economics Essays. This essay discusses the ability of the governments in developing countries to promote and manage economic development.
In essence, the essay discusses the fact that 5 Pages (1, Words) Last Modified: 20th December, Invest in your future today Place an Order. Different economists pose theories as to the types of inflation.
But, the generally accepted types of inflation are demand-pull, cost-push and monetary. Demand-pull inflation is when the demand for products or services rises sharply and surpasses the available supplies of those goods.
Consumption is a topic on which a lot of reach has been carried out by the economist and psychologists to know what leads to different levels of satisfaction from consumption what factors lead to variation in consumption patterns of households with same income levels.
The economic environment consists of external factors in a business market and the broader economy that can influence a business.
You can divide the economic environment into the microeconomic. In this report I am going to describe the way that Cadbury are affected by different economic factors.
I will describe the influence of two contrasting economic environments on the. Socio-economic class or socio-economic status (SES) may refer to mixture of various factors such as poverty, occupation and environment.
It is a way of measuring the standard and quality of life of individuals and families in society using social and economic factors that affect health and wellbeing.Download