Factors Affecting Economic Development Quiz

Population density is not typically considered a direct factor affecting economic development, unlike factors such as education, infrastructure, and political stability.

GDP measures the total economic output of a country, including goods and services produced within its borders, providing a key indicator of economic performance.

A developed economy is characterized by advanced industrialization, infrastructure, and a high standard of living.

Money is not considered a factor of production; traditional factors include land, labor, and capital.

Inflation refers to a persistent rise in the overall price level of goods and services in an economy.

Neoclassical economics advocates for minimal government intervention, emphasizing the efficiency of free markets and individual decision-making.

Human capital theory emphasizes the importance of investing in education and healthcare to enhance the skills and health of the workforce, contributing to economic development.

A trade surplus occurs when the value of a country's exports exceeds the value of its imports.

Comparative advantage is the ability to produce a good or service with a lower opportunity cost, leading to more efficient production.

Open market operations, involving buying or selling government securities, are a common monetary policy tool used to regulate the money supply and interest rates.

In the Solow growth model, technological progress is identified as the primary driver of long-term economic growth, leading to increased productivity.

The Harrod-Domar model identifies savings and investment as crucial factors determining economic growth and development.

The full employment level of output is the production level where all available resources are efficiently utilized without causing inflationary pressures.