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Question

Which of the following hinders development of developed countries?


A
Population growth
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B
Cultural barriers
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C
Foreign debt
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D
All of these
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Solution

The correct option is C All of these

Population Growth: Population growth is one of the central problems of economic development. Some developing countries have population growth rates in excess of their GDP growth rates and therefore have negative growth rates of per capita GDP. Many developing countries have rates of population growth that are nearly as large as their rates of GDP growth. As a result, their standards of living are barely higher than they were 100 years ago

Cultural Barriers: Traditions and habitual ways of doing business vary among societies, and not all are equally conducive to economic growth. In developing countries, cultural forces are often a source of inefficiency. Sometimes personal considerations of family, past favors, or traditional friendship or enmity are more important than market incentives in motivating behavior.

Foreign Dept: Sharp increases in real interest led to increased debt-service payments and as a result, many countries could not make their payments. The lending banks had little choice but to reschedule the debt essentially lending the developing nations the money to make interest payments while adding to the principal of the existing loans.


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