Answer

Economic Development

The implied growth rate is 4%

#2

Projects must be appraised to know the impact of every project on the organization. This implies that project appraisal is performed to determine the amount of money the organization has invested in the project and the return investment.

#3

The Washington Consensus is a collection of economic policy suggestions comprised of reform packages encouraged for crisis-ridden for developing nations and Latin America, specifically by the IMF, World Bank, and the American Treasury Department. The prescriptions comprised macro-economic stabilization policies, market forces expansion in the domestic economy, and economic opening in both trade and investment. The Santiago consensus calls for deeper regional integration and improved investment among Latin American nations.

#4

By reducing corruption, a developing country benefits economically through economic growth and sustainably high revenues. Also, decreasing crime is a component of the anti-poverty approach. The poorest populace pays massive portions of their incomes in bribes and other extortion forms, which is evident in Ecuador. Reform mechanisms are fruitful at the local level, mostly in a country like Uganda, to supervise local health facilities.

#5

A factor endowment signifies the number of resources a nation has at its disposal used for manufacturing like entrepreneurship, cash, land, and labor. Countries with different factor endowments usually are more prosperous and can generate more goods than nations whose factor endowments are small. Likewise, factor endowments impact the opportunity expense of specializing in producing specific goods comparative to others. Hence, these diverse categorizations of capital and labor ascertain a nation’s comparative advantage and specialization in an economy. For instance, a factor endowment concerning land is natural assets like oil—nations with more oil export it hence re-directing internal assets towards generating the factor they have in quantity.

#6

(a) Traditional commodities often undergo massive price variations

(b) In traditional commodities, less developed nations have a comparative advantage

(c) The traditional commodities terms of trade fall over time as per the Prebisch-Singer thesis.

#7

The three-country features that support economic integration are the same economic structures, development levels, and places, whereas those that deter are the same comparative advantage, same resources, and nationalism.

#8

An over-valued exchange rate means that the domestic currency value is superior to its importance at the foreign exchange market equilibrium point (Todaro & Smith, 2015). One possible cause for this is the central bank’s insistence on preserving fixed exchange rates during massive domestic inflation.

#9

Capital flight is a massive migration of financial resources and capital from a country because of political or economic uncertainty, capital controls enforcement, or currency devaluation. Hence capital flight can be legal, for example, when money is repatriated back to the home country by foreign investors or illegal, which happens in countries with capital controls that limit assets transfer out of the nation. Capital flight can enforce a harsh burden on poorer countries because the absence of capital hinders economic development and might cause lower standards of living. 

#10

Balance of Payment (BOP) offers comprehensive information concerning the supply and demand of a nation’s currency (Todaro& Smith, 2015). Also, BOP data are used in evaluating a country’s performance in worldwide economic competition. For instance, if a government has recurrent BOP deficits, it might indicate that its industries lack competitiveness. One needs to look at the current account deficit because a deficit implies that a nation is importing more products and services than its exporting.  What to look at are (i) Current account; (ii) Surplus and deficit; (iii) Cash account

#11

It implies that a country has a high debt service/exports ration

#12

Tied aid can be bound by a source such as loans or grants with a stipulated purchase of donor-nation products and services or by the project, which are monies used for a prescribed project. In both situations, the aid value is lessened since the stipulated source is likely to be a high-priced supplier or the project is not of the highest priority.

#13

Advantages

• Fosters financing to developing nations
• Encourages secure, long-term lending
• Expands investment portfolios

Disadvantages

• Impediments to domestic investment
• Economic non-viability
• Not appropriate for strategically significant industries

#14

Donors give aid for economic motivations and self-interest and also for technical assistance (Todaro & Smith, 2015).  It is a method to extend the impact of donor nations’ economic and political interests on recipient countries. For example, aid amid the war on terror was concentrated on countries in need of growth but not on countries on the war frontlines. George Bush’s government’s Millennium Challenge Account (MCA) and PEPFAR both omitted frontline countries in the fight against terrorism, and enhanced development is to priority position in American foreign policy.

#15

Even though MNCs give capital, they might reduce domestic savings and investment proportions by exchanging private savings, suppressing competition via exclusive production pacts with host nations, failing to re-invest most of their revenues (Todaro & Smith, 2015). Likewise, they raise an enormous portion of their capital locally, resulting in crowding out of the investment in domestic firms.

# 16

• Immigrants remittances
• Private FDI
• Private foreign portfolio investment
• Foreign aid

#17

• The employment conditions are fixed and steady in the organized market, whereas in an unorganized market, employees are paid daily.
• Government directives control an organized market, whereas an unorganized market has no government control.

#18

• Interest rates caps
• Government ownership or regulation of domestic banks
• development or preservation of captive domestic market for government debt
• Directing credit to specific firms
• Restrictions on financial industry entry

Financial liberalization encourages unrestricted capital glow hence encouraging economic growth and savings.

#19

Central Banks (CB) typically has three monetary program roles, monitoring of banking and payment structures. These roles are the same between advanced and developing countries; however, the manner and instruments are dissimilar. In terms of monetary policies in developed nations, capital markets are created. CB does open market functions to operate short-term interest charges in the economy’s financial markets and liquidity. Third-world governments lack bond markets, so CB does their operations by integrating liquidity and banks’ credit volumes and exchange rates. 

#20

Development banks function to finance projects that enhance the material welfare of persons living in poverty. They have had no massive success because of a lack of checks and balances, hindering the banks from making bad investments. Some global development banks have been accused of enforcing policies that eventually destabilize the recipient nations’ economies.

#21

Benefits

• When functions are privatized, new, private sector directors’ revenue-seeking conduct will lead to cost-reduction and massive attention to client satisfaction.
• Tax reduction
• This leads to streamlining and downsizing of the government.
• Enhanced service quality
• Increased competition

Cost

• Challenge of controlling private monopolies
• Disintegration of industries

Privatization is most advisable if the government will raise revenue from the sale.