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MAS2 Lesson 1

Economic development involves improving a nation's economic, social, and political well-being, focusing on enhancing living standards and sustainability rather than just financial growth. Key indicators for measuring economic development include GDP, HDI, and GPI, while globalization, outsourcing, and information technology play significant roles in driving growth. Traditional economic metrics have limitations, necessitating broader measures that consider social equity and environmental sustainability for a comprehensive understanding of progress.

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23 views3 pages

MAS2 Lesson 1

Economic development involves improving a nation's economic, social, and political well-being, focusing on enhancing living standards and sustainability rather than just financial growth. Key indicators for measuring economic development include GDP, HDI, and GPI, while globalization, outsourcing, and information technology play significant roles in driving growth. Traditional economic metrics have limitations, necessitating broader measures that consider social equity and environmental sustainability for a comprehensive understanding of progress.

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agnesbalderama1
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LESSON 1 in Economic Development

The Meaning and Measurements of Economic Development

I. Introduction

Economic development encompasses the comprehensive improvement of a


nation’s economic, social, and political well-being, going beyond mere financial
growth to enhance living standards, reduce poverty, and promote sustainability. This
report explores the meaning and measurement of economic development through
key indicators like GDP and the Human Development Index (HDI), while examining
the roles of globalization, outsourcing, and information technology as drivers of
growth and innovation. Additionally, it addresses the limitations of traditional
economic metrics, emphasizing the need for broader measures that account for
social equity and environmental sustainability. By analyzing these factors, the report
provides a deeper understanding of the complexities involved in fostering equitable
and sustainable progress.

Economics is a social science that studies the production, distribution, and


consumption of goods and services. It focuses on how individuals and societies
allocate scarce resources to satisfy unlimited wants, analyzing human behavior in the
context of resource management and decision-making.

II. Meaning of Economic Development

Economic development refers to the process through which a nation improves


the economic, political, and social well-being of its citizens. It involves enhancing
living standards, reducing poverty, and fostering equitable growth. Economic
development is not merely about increasing income but also about improving quality
of life and ensuring sustainable practices.

III. Measurement of Economic Development

Economic development is measured using various indicators, including:

- Gross Domestic Product (GDP): A primary indicator of economic activity.


- Human Development Index (HDI): Combines life expectancy, education level, and
per capita income.

- Genuine Progress Indicator (GPI): Adjusts GDP for social and environmental
factors.

- Poverty Rate: Measures the percentage of the population living below the poverty
line.

IV. Globalization

Globalization refers to the process by which businesses or other


organizations develop international influence or start operating on an international
scale. It increases interconnectedness of economies through trade, investment, and
technology transfer. It can stimulate economic growth by providing access to larger
markets and resources but may also lead to job displacement and income inequality
within nations.

V. Outsourcing

Outsourcing involves relocating business processes or services to countries


or companies with lower labor costs. Outsourcing helps the economy develop by
reducing operational costs for companies, allowing them to reinvest in growth and
innovation, which boosts productivity. It also create jobs in both outsourcing
destinations and domestically, fosters global trade relationships, and promotes skill
development across different regions.

VI. Information Technology

Information technology (IT) is a key driver of economic development as it


facilitate innovation, improves productivity, and enables access to information. IT
transforms industries by creating new business models and improving
communication, but it can also contribute to job displacement in traditional sectors.

VII. Limitations of Standard Economic Approaches

Standard economic approaches often rely on metrics like GDP that may not
fully capture the complexities of economic development. These measures can
overlook social factors such as inequality, environmental sustainability, and overall
well-being. Alternative indicators are necessary to provide a more nuanced
understanding of progress.

VIII. Conclusion

Economic development is a complicated process influenced by globalization,


outsourcing, and information technology. While traditional measures provide insights
into economic activity, they must be complemented by broader indicators that
account for social welfare and environmental sustainability to effectively gauge true
progress in society.

Citations:

[1] https://sites.google.com/site/economicsbasics/economics-definitions

[2] https://arts-sciences.buffalo.edu/economics/about/what-is-economics.html

[3] https://en.wikipedia.org/wiki/Socioeconomics

[4] https://www.econlib.org/library/Topics/College/whatiseconomics.html

[5] https://corporatefinanceinstitute.com/resources/economics/what-is-economics/

[6] https://www.investopedia.com/terms/e/economics.asp

Prepared by:

Angustia, Jeveth M.

BSA 1- BLK 2

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