The role of government in economic development. (2023)

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Critically assess the role of the state in controlling the economy and economic development using national and international examples.

The state plays an important role in keeping the economy stable. Economic crises during extreme downturns such as World War II force governments to become involved in restoring the economy. In the 1980s, growth in many developing countries experienced a serious slowdown (Adelman, 1999). However, many Asian countries can maintain or even improve economic development with the support of their governments. His government found a way out by avoiding deflation and restrictions on imports and wages. Instead, they promoted their export capability, which allows foreign countries to trade and invest in their market.

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(Video) How Governments Can Support Economic Growth

The US federal government is another example of a government-controlled economy. By adjusting taxes, the money supply, or wages, governments are able to control the economy's growth rate, which affects the number of jobs and the price, which in turn affects demand and supply. During the Great Depression of the 1930s, the government faced economic downturns (Government's Role, 2010). Concerned about the slow growth, the government treated this situation as the "most serious". They lowered the tax rate and financed the money supply themselves. Later, in the 1970s, the government faced another problem, inflation. To deal with inflation, government leaders brought the situation under control by restricting the rate of demand, avoiding "tax cuts" and maintaining the growth of the money supply.

For decades, the Thai government has focused mainly on industrialization policies along with its economic situation. To stabilize economic development, they prioritize the industrial market. First, the government allowed the private sector to support industrial development. So they would avoid any investment that might compete with private industry support. These strategies are used to support the private sector, provide government support, and encourage people to compete. However, to participate in the competitive international market, the government would need to increase its productivity rate both qualitatively and quantitatively. Therefore, the government is increasing skilled workers and more advanced technologies to help the industry to raise the standard of its products. With the support of the State, we were able to cooperate with the Indochinese countries in their investments and international trade (Adelman, 1999).

(Video) Basics of the Government Role in the Economy

Q3 Consider the link between food production and climate. Write as an essay that includes a list of the different ways in which production, distribution and consumption contribute to or offset climate impacts.

One of the main factors that affect agriculture is the climate. Like climate change, it causes serious damage to soils, crops, livestock, pests or even disease. Therefore, we humans tried to find solutions that could neutralize this damage.

Policies are being developed to address the problems arising from climate change. First, the policy called “Agricultural Subsidy and Trade Policies” (Antle, 2010). This method has been established since the 1930's; It encourages the farmer to grow funded crops instead of trying to adapt to climate change. This directive controls the activity of the farmer. It ended up distorting the international market. The second policy, or “Production and Income Insurance and Disaster Relief Policies” (Antle, 2010), is a method of insurance against long-term disasters. This policy guarantees that the farmer will receive a partial payment in return if his farms are damaged but a natural disaster. The third policy is called “Soil and Water Conservation and Ecosystem Services Policies” (Antle, 2010). This policy protects soil and water fertility in a given area. Orders are issued to remove crops and replace them with trees. However, these policies, while promoting “environmental value” (Antle, 2010), do not meet the desire to adapt to climate change. The next policy is “fiscal policy” (Antle, 2010). Since taxation affects almost everything, it gains control of adjustment by accelerating “wealth depreciation” or encouraging green investment. However, taxes can only support agriculture indirectly. It is more effective in other areas of the economy, so this policy is often overlooked. The fifth policy is the “energy policy” (Antle, 2010). We are increasingly concerned about our climate. Therefore, we are more interested in “non-fossil energy” (Antle, 2010). Food production can also help solve this problem. Plants or waste can be converted into energy. The cost of this method is also very low. “Environmental policies and agricultural land use” is another policy contributing to climate change (Antle, 2010). This policy manages the amount of land used as climate changes vary in different areas. Animal waste, for example, was consolidated in a specific location so that the location could be used later.

Unknowingly, food production or farming can be useful to help the environment. Since climate change cannot be prevented, all available resources are used to slow it down. From animal waste to taxation, they all have their own values ​​for adapting to climate change.

Q4 Where is future energy demand likely to be greatest and why? Which energy sources are expected to dominate in the near future? Long-term? Should we be bullish or pessimistic on the short- and long-term energy outlook?

India is home to more than 15% of the world's population (India Energy Data, 2010). With a rapidly growing economic rate, they consume a large amount of energy resources equivalent to developed countries like the US or Japan. In the future, the demand will tend to increase due to the increase in population and the vehicle rate. As the fifth largest consumer of energy in the world, India consumed 3.7% of the world's commercial energy (Shanker, undated). In contrast, resource availability is low; It is likely that one day the resources will not be enough. According to statistics, an 8% growth in the DGP rate would also require higher commercial energy such as coal from 3.7% to 6.1% and primary energy supplies such as fossil fuels from 2.2% to 5.1 % (Shanker, undated). However, every resource is limited, especially when it comes to coal. In addition to being scarce in quantity, they also provide low-quality energy, even harming the environment.

Knowing that one day we will be consuming all these non-renewable resources, we also discovered other reliable energy sources such as solar energy. Many scientists assure that solar energy may be the No. 1 source of energy in the near future (What Solar Energy Will Need to Dominate in the Future, 2010). With an unlimited amount of energy, the sun has the potential to generate enough solar energy to meet the needs of every human being. Furthermore, the energy provided by the sun is clean enough and requires no maintenance (Future Uses of Solar Energy, 2009). However, this energy resource is still incomplete. Solar energy does not have the power to supplement fossil fuels. It is also expensive to harvest this energy and more research is needed. Despite the incomplete factors of solar energy, this type of energy is likely to dominate for the foreseeable future.

Nuclear energy is unsurpassed in energy production. Like solar energy, nuclear energy leaves no traces of carbon (Liptak, 2009). The amount of energy it is capable of is extremely high. However, nuclear energy has its own disadvantages. Start with the cost of unstable uranium. The needs of the nuclear power plant can be estimated at around four million tons. At the current price of uranium ($50/lb), it could one day suddenly rise to twice its original cost (Liptak, 2009). The other downside would be your risk factors. Nuclear energy is dangerous and its toxic waste is highly contaminated. The scientist has not yet researched how to stay safe. But usage is already plentiful today; provides energy for more than 7.5% of total consumption (Liptak, 2009). So now it's slowly getting to peak long-term energy.

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One can expect solar and nuclear power. I believed that they are capable of replacing existing non-renewable resources such as fossil fuels. Future science and technology can reduce the cost of these energies. After all, it will be worthy and safe.

Q5. "Regionalization versus Globalization" will discuss how globalization has led to regionalization and the tensions that have arisen between these two forces as they engage with current trends towards the formation of continental trading blocs and trade regimes. Compare and contrast the protectionist trends of the 2000s with those of the 1930s.

The economy of many countries has tried to expand its market internationally. The process of globalization has taken them all over the world. However, it sometimes encourages these countries to invest in the smaller space. Barriers between cultures can affect the market (Clancy, 2009). Therefore, it is more convenient to invest in areas with the same lifestyle or beliefs. Because of this, some countries are changing their method from globalization to regionalization. Trading with neighbors is obviously easier than trading with distant foreigners. The price also varies between locations. For example, textbooks used by a Thai university cannot be sold in the US. Why is that? The price ratios between Thailand and the United States are so different that prices for books manufactured in the United States are prohibitive for Thais. That's why the books were printed here just for us and are strictly prohibited by the US.

It is more difficult for Southeast Asian countries to trade with the United States than with neighboring countries. These countries built their own market with neighboring countries to strengthen themselves. ASEAN is one of them. With cooperating countries, trading with distant countries is much easier.

In the early 1930s, protectionism kept US trade inaccessible to the outside world. With few international trading partners and fewer 'economic tools', this period was known to be catastrophic (Clancy, 2009). In the 2000s, the United States seems to have learned its lesson. Protectionist tendencies are fading and world trade is booming. When the money supply is stable, investors regain confidence in the market, hence economic growth. Most people agree that protectionism is not the way out. This method risked the market into a state of depression in both periods.

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(Video) Economic Roles of Government

F6. Describe and explain the differences in the age composition of the population in advanced and less developed countries. What economic and social problems does each of these population characteristics cause?

The different ages of the population are noticeable in the different living environments. The fertility rate is a factor that determines population size (World Population Prospects, Volume III). In developed countries, due to technology and medicine, the fertility rate is higher than in developing countries. For this reason, the age composition differs in these two environments.

In advanced countries, the proportion of elderly people is much higher than in less developed countries. According to statistics, the rate of people over 65 years old tends to increase from 15.3% in 2005 to 25.9% in 2050, while the population of young people under 15 years old decreases slightly from 17% to 15.6 % in the same period. In less developed countries, the elderly population will increase from just 3.2% to 6.6%, while the population under 15 is expected to fall from 41.5% to 28.9% due to lower fertility rates. However, these children will not simply disappear, as over time the proportion of the population aged 15-64 will increase from 55% to 64.5% during this period (World Population Prospects, Volume III).

As the overall youth population rate decreases while the elderly rate increases, the dependency rate will also increase. During the period 2005-2050 in developed countries, the dependency ratio per 100 workers increased from 47.7 to 71.2. This will obviously lead to independence issues for people over 65, as the number of employees declines relative to retirees. In contrast, dependency rates per worker in less developed areas fall from 81.8 to 55.1, which means that children in these regions are entering working age while the elderly (retired) are dying (World Population Prospects, Volume III).

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The level of care not only affects people's lives, but also their economic performance. As the number of employable people grows, so does the per capita income of this group. In less developed countries, economic growth is driven by an increase in the “working-age” population (World Population Prospects, Volume III). As per capita income grows, people tend to spend more, which motivates an active economic market. During this period, the working-age population drives economic growth rates. However, rates differ in developed countries. As the working-age population declines, countries' economic growth will lag far behind.

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