Misr Uni. for Science& Technology
Department: Economics
Faculty Of Business & Economics
Course: Eco. Growth& Development
Academic Year: Fall 2022/2023
Assignment No: 1
Student Name: Ammar Hany
Student ID: 88331
I. Indicate if each of the following statements is True (A)/False (B),correct the (F) ones:
1) Economics focuses on the study of people’s behavior.
(T)
2) Under command economic system, individuals take all the economic decisions.
CORRECT: do not take all
(F)
3) Ibn Khaldun argued that population increase eventually increase income.
CORRECT : Decrease income
(F)
4) The Mercantilists argued that industry is the most important economic sector.
CORRECT : trade and accumulation of wealth
(F)
5)
The Mercantilists believed that a government can improve the economy.
(T)
6)
The physiocrats were great believers in the institution of public property.
CORRECT: not great
(F)
7)
According to the laissez–faire policy, government should protect property.
(T)
8)
The Physiocrats advocated the laissez faire policy.
(T)
9)
Marx was interested in studying the nature and causes of the wealth of nations. ( F )
CORRECT: of capitalism and social class struggle
10) Economic growth refers to the process by which national output is decreased.
CORRECT: national output is increase
(F)
11) Adam Smith’s main contribution is related to his theory of population growth.
(F)
CORRECT: theory of invisible hand and free markets
12) Ibn Khaldun argued that population growth eventually leads to labor increase.
(T)
13) The concept of economic growth emerged in the early industrialization era.
CORRECT: before the early industrialization era
(F)
14) According to Mercantilists, trade is considered the most important occupation.
CORRECT: accumulating precious metals
(F)
15) Economic growth refers to the process by which national income is increased.
(T)
16) In the capitalist economic system, both government and individuals take economic decisions.( T )
17) Economics is a social science.
(T)
18) Microeconomics studies the economic decisions made by individuals and businesses.
(T)
19) Major topics of Microeconomics include unemployment and economic development.
(F)
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CORRECT: include supply and demand and market structures
20) Adam Smith was interested in the problems of income distribution.
CORRECT: interested in the benefits of division of labor and free markets
(F)
21) Malthus studied the relationship between population growth and economic growth.
(T)
22) Karl Marx is the founder of the socialism.
(F)
23) Economic growth refers to the process by which a nation’s wealth decreases over time.
CORRECT: increases over time
(F)
CORRECT: one of the founders of socialism
24) Kuzents referred to economic growth as the steady process by which the productive
capacity of an economy increased over time.
(T)
25) Economic growth has been defined by Arthur Lewis as the growth of output per person.
(F)
CORRECT: per capital not just output per person
II. Please define 3 only of the following of concepts:
1) Mercantilists view of economic growth
2) Ibn Khaldun’s idea of economic growth
3) Economic growth
4) Economic Resources
1- Mercantilists view of economic growth: Mercantilists thought that the wealth of a nation could be
increased by trade. They indicated that a nation can have more wealth by increasing its stock of gold and
silver obtained from trade. According to mercantilists, trade is the most important occupation in the
economy
2- Ibn Khaldun’s idea of economic growth: In the late 14th century (1377), the Arabian economic thinker Ibn
Khaldun provided one of the earliest de scriptions of economic growth in his famous Mukadimah. He stated
that: the growth of population leads to labor increase. This would increase income, and consequently the
need and desire for luxury goods increases. Manufacture activities are created to obtain luxury products. The
value of production increases, and profits are multiplied. That is how the wealth of a nation increases.
3- Economic growth : The concept of economic growth emerged in the early industrialization era, which
started and flourished in Europe in the mid 18th century. Economic growth generally refers to the process by
which a nation’s wealth increases over time. economic growth is related to a quantitative sustained increase
in the country’s per capita output or income accompanied by expansion in its labour force, consumption,
capital and volume of trade. In the context of this course, economic growth refers to the process by which
the productive capacity of an economy is improved over time leading to increasing levels of national output
and national income.
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III. Discuss the following issues:
1) Stimulating factors economic growth
2) Major components of economic growth
Q1-Stimulating Factors of Faster Economic Growth
1- Economic freedom as a precondition for growth
Economic freedom is a condition in which people are able to make personal choices, their private
property is protected, and they are free to buy and sell in markets. Economic freedom requires the
protection of the factors of production and goods owned by people.
2- Policies to achieve faster growth
a) Provide incentives for the private sector.
b) Encourage savings which increase investments and capital accumulation.
c) Encourage research and development.
d) Encourage international trade.
e) Improve the quality of education
Q2- Major components of economic growth:
For any society to achieve higher levels of economic growth, the following four factors should be
increased:
1- Population (labor force): A larger population is expected to increase the potential size of domestic
markets, and a larger labor force is expected to increase the productive manpower.
2- The growth of natural resources: Natural resources include arable land, minerals, energy sources,
water and forests. These different types of resources are considered a basic ingredient of agricultural,
industrial and services production. However, there are many countries which have limited natural
resources, but they were able to utilize whatever resources available and increase their output levels.
3- Capital accumulation: Capital accumulation occurs when the proportion of
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saved income is increased and invested. It leads to expanding the productive capacity of current
factors of production or, establishing new productive units (e.g. factories, farms, schools, etc.). This
increase improves the quality of physical and human resources, which leads to increasing national
output and national income.
4- Technological progress:
It results from new and improved ways of performing traditional productive tasks such as growing
agricultural crops, manufacturing cars, or building roads and housing
IV. Please compare between 3 only of the following pairs of concepts:
1) Microeconomics and macroeconomics
2) Free market economy and command economy
3) Positive and negative effects of economic growth
4) Simon Kuzents and Arthur Lewis definitions of economic growth
1The field of economics is generally divided into two broad subfields: microeconomics and
macroeconomics.
1) Microeconomics: it focuses on the choices made by individual decision-making units in the
economy—typically consumers, and firms; and the implications of such decisions on them. The key word
in microeconomics is individuals.
2) Macroeconomics: it studies the total or aggregate effects of choices made by economic units
(individuals, businesses, and government) on the national as well as global economies. Major topics of
Macroeconomics include inflation, unemployment, and economic development. The key world in
macroeconomics is aggregate
2-The Free Market System: in which economic decisions are left to individuals who act in response to
what is known as "the invisible hand". The main examples of that system are the United States and
Canada
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-The Command Economy: is one in which some central agency decides what is to be produced, how to
do each of the tasks in production, and how the output is to be divided. Germany under Hitler, Italy
under Mussolini, and Russia under the Communists are examples of that system.
3-Positive effects
a) Diminishing global income inequality
b) Rapid reduction in global poverty
c) Advancements in technology and science
d) Improving the human conditions of people
e) Increasing people's sense of happiness f)
Economies are driven by new technology such as faster computers and ongoing improvements in
efficiency.
-Negative effects
a) Growth has negative effects on the environment
b) Growth encourages the creation of artificial needs and wants
c) Although mean and median wealth has increased globally, the gap between the poorest and richest
countries has increased
d) Some critics argue that economic growth combined with globalization leads to the collapse of global
natural resources
e) Other critics argue that some cultures have disappeared because they grew beyond the ability to
support
41- Simon Kuzents's definition of economic growth:
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Economic growth refers to the steady process by which the productive capacity of an economy is
increased over time leading to rising levels of national output and income. The main components of
economic growth:
a) sustained increase in national output
b) advancing technology
c) institutional and ideological adjustments
2- Arthur Lewis's definition of economic growth:
Arthur Lewis defined economic growth as "the growth of output per head of population". According to
Lewis, economic growth depends on:
a) increasing economic activities;
b) increasing knowledge; and
c) increasing capital.
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