Name: Arcele Jayme S.

Quinto

Course and year: 21-BSA-01

Date: 10/21/2020

MIDTERM ACTIVITY NO.1

Part I.

Explain the difference between economic growth and economic development.

Economic growth has a narrower scope or perspective than the Economic Development, it is because it
only measures the level of output which is caused by increase in quantity of resources on a specific time
period. On the other hand, the Economic Development is broader in a sense that it measures the
economic growth and the standard of living of a country. Whereas, there is an increase in the living
standard and more opportunities in the area of education, improvement in healthcare facilities, wide
employment of the citizens and taking into account the welfare and sustainability of the environment.
Economic Growth is measured through the Gross Domestic Product of the country or those output
produced within the country's borders, it is commonly used to measure progress for developed nations
but it can also be use to developing ones because growth is essential to measure development. Because
it uses GDP as a measurement, it measures progress quantitatively. While, the Economic Development
uses Human Development Index, wherein the country’s educational literacy and life expectancy are
taken into account, bringing both qualitative and quantitative changes because HDI varies from zero to
one. It also takes into account the environment condition, the depletion of natural resources, pollution,
congestion and disease with the belief that growth can’t be achieve without causing the environment be
damaged. Economic development is more relevant to measure progress in developing nations and
underdeveloped nations. Economic development emphasizes that meeting our needs at the present
need not to compromise our needs in the future.

Explain at least two methods used for measuring economic development.

Economic Development can be measured through Human Development Index (HDI) and Green GNP.
Human Development Index is a geometric mean of three components namely Life Expectancy, level of
educational attainment and the per capita income. The HDI score of a country varies from zero to one.
Those who have longer lifespans, higher educational level and higher Gross National Income (GNI) per
capita will have a higher HDI. Whereas, Green GNP is a measurement wherein national income is to be
evaluated while taking into account the depletion of the natural resources and environmental
degradation. The adjustment of national income has to include the cost of the damages incurred in the
environment such as pollution and global warming, thus deducting them to the national income. But
estimating this cost is difficult to determine. Compensating for the environment damages were
suggested by others in an idea that these shouldn’t be needed if the environment had not been
damaged.

Cite a country that experienced growth but not development. Discuss why.

A growth is possible to occur even without the presence of development or improvement in the quality
of life. Papua New Guinea is an example for this phenomenon. This country rich in resources specially in
minerals and has an increasing total income and income per capita. However, it continues to lag behind
on human development outcomes. According to United Nations Development Programme 2020, it ranks
156th out of 187 countries in the Human Development Index, with life expectancy of 63 years and ¼ of
the children are unable to attend school and 50% for the adult literacy. Very few has access to electric
grid and reticulated water system and even health centers lack or have no electricity and essential
medical equipment. The reason for this is because the government is not able to distribute the products
of the economic growth throughout the whole country and provides little opportunities to build or
rehabilitate healthcare facilities and infrastructures. Another reason is that Papua New Guinea ranks
136th out of 176 countries in the Corruption Perception Index, its government is said to be notorious for
corruption and the risk of turning the state into fully-fledged kleptocracy (The Economist)

Compare two nations on their level of development.

Japan has undeniably made its economy boom in an instant after World War II. From being a less-
developed country in 1952, it became the first country to move into developed country in the postwar
era. Japan was able to attained this because they adhered with the principles of International Monetary
Fund and General Agreement on Tariffs and Trade, making it the country with second largest economy
next to the United States and became one of world's six most important national sources between 1980
and 2007. They were able to achieve such because it prioritized strong regulation, anti-corruption
measures and avoiding debts while reserving capitals and savings. On the other hand, Philippines ranks
31st with the largest economy in the world, 13th on Asia and 6th richest country in Southeast Asia by
GDP per capita. Philippines is one of the developing countries who strives to be developed. It is one of
the countries with Tiger Cub Economy which follows the same economic model used by the rich
countries like South Korea and Taiwan. It in considered as a newly industrialized country, from being on
the based of agriculture to services and manufacturing.
Part II.

Choose one (1) image below and say something about it. (In relation with our lesson, introduction to
economic development.)

The image shows that the baker can not help the economy to grow by making bigger pies. It is because
the goods used or the intermediate goods used in making the pie such as flour, eggs, butter, sugar and
cinnamon cannot be included in computing for the Gross Domestic Product of a country because GDP
only accounts for finished goods within the borders of the country. It cannot take into account those
goods used to make another good except for those capital goods which are used for a long span of time.
If the baker makes a bigger pie, then it will require him to use numerous ingredients or the intermediate
goods making them excluded in the Gross Domestic Product of the country.