Question

1. One factor frequently cited for slow growth in India until the 1990s is:

too little government intervention in the economy.

corruption among government officials.

reliance on the drug trade.

dependence of foreign capital flows.

2. If real GDP doubles in 12 years, its average annual growth rate is approximately:

6%

4%

3%

5%

3.When the government invests in building roads, ports, and a reliable power grid, it is investing in a nation's:

infrastructure.

private property.

human capital.

technological progress.

Answer 1

1. corruption among government officials.

High level of corruption slows the overall economic development and growth. Major consequences of corruption are delay in infrastructure development, inefficient allocation of resources, quality education and healthcare.

2. 6%

Rule of 70:

Number of years to double = 70/ Annual growth rate

12= 70/ Annual growth rate

Annual growth rate = 70/12 = 5.83

Annual growth rate = 6%

3. infrastructure.

Infrastructure sector is a key driver for any economy. Government spending on construction of roads, buildings and ports are investment in infrastructure. Infrastructure development increases the pace of economic growth.