Question

There are two approaches for a developing country to promote development. If a country has a natural resource, such as petroleum, which is in considerable demand in the rest of the world, which is the more logical of the two approaches to development for that country?

Answer 1

Answer:

The more logical of the two approaches is the Neoclassical Approach.

Step-by-step explanation:

The two approaches are: the linear stages of growth model - theories and patterns of structural change, the international dependency revolution, and the neoclassical theories.

ECONCILING DIFFERENCES BETWEEN THE APPROACHES

• Each approach has strengths and weaknesses. However, the Controversies – ideological, theoretical or empirical –

makes the study of economic development challenging but the continous evolving patterns of insights and understanding foster conensus significance merits from each approach.

Summary:

1. LINEAR STAGE MODEL : crucial role of savings and investment

- Two-sector model: transfer of resources from low to high-

productivity activities, linkages between traditional & modern

- Dependence theory: importance of world economy and

decisions of developed world affecting developing economies.

2. NEO CLASSICAL : efficient production & proper price systems favourable for all Economies but especially for the developing economies like the instance in question for the maximum utilization of the resource using Global Best Practices.

Answer 2

International trade is better.

Self-Suffiency

Step-by-step explanation:

International trade is term that defines exchange of capital, goods and services across various international borders or countries.

The main purpose of international trade is for the countries to have access to goods and services that will be expensive to produce internally, compared to buying through importation.

Therefore, a developing nation promotes development by international trade the following ways:

1. Increased Economic Resources: through international trade, developing nation will be able to have access to economic resources such as labour and capital to produce goods and services needed in the country

2. Improved quality of life: this implies that developing nation can easily have access to readily available products that are expensive to produce internally.

3. Better foreign relations: this also means, developing nation will have access to military infrastructure or services, and politically get connected through international trade relations, thereby getting protected against internal and external threat.

4. Improved production efficiency: this means that developing nation can easily exchange or get new but efficient knowledge or education in terms of production or business administration that can help to promotes development in the country.

However, self sufficiency is a term that describes country trying to produce all the goods and services needed to thrive as a country. However, even developed nations can not be self sufficient in all sectors of the economy, not to talk of developing nation that only have natural but raw resources or materials as economic resources, without efficient production means or production of other needed economic resources.