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Assignment 1 ECO

Capital allocation involves a company's CEO deciding how to invest financial resources to maximize profits. Projects are evaluated based on measurable outcomes and return on investment. Information and technology are important drivers of economic development. Four main factors influence entrepreneurial activity in developing countries: economic development, culture, technology development, and education. A supportive economic environment positively impacts entrepreneurship the most. Sustainable development has become a common development goal but questions remain around its precise definition and implications for policy. While widely used, there is a risk it becomes just a rhetorical phrase without clear meaning. Central banks use tools like open market operations, interest rates, and reserve requirements to achieve monetary policy goals of full employment, growth, and price

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Eugene Alipio
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59 views

Assignment 1 ECO

Capital allocation involves a company's CEO deciding how to invest financial resources to maximize profits. Projects are evaluated based on measurable outcomes and return on investment. Information and technology are important drivers of economic development. Four main factors influence entrepreneurial activity in developing countries: economic development, culture, technology development, and education. A supportive economic environment positively impacts entrepreneurship the most. Sustainable development has become a common development goal but questions remain around its precise definition and implications for policy. While widely used, there is a risk it becomes just a rhetorical phrase without clear meaning. Central banks use tools like open market operations, interest rates, and reserve requirements to achieve monetary policy goals of full employment, growth, and price

Uploaded by

Eugene Alipio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Name: Eugene D.

Alipio 20193079
Assignment 1
ECOPE05: Economic Development Online

1. What criteria should be used to allocate capital between alternative projects? How
important are information and other technology in economic development?

Capital allocation is about where and how a corporation's chief executive officer (CEO) decides to spend
the money that the company has earned. Capital allocation means distributing and investing a
company's financial resources in ways that will increase its efficiency, and maximize its profits.

To evaluate alternatives, businesses will use the measurement methods to compare outcomes. The
outcomes will not only be compared against other alternatives, but also against a predetermined rate of
return on the investment (or minimum expectation) established for each project consideration. For
example, if there were three different printing equipment options and a minimum return had been
established, any printers that did not meet that minimum return requirement would be removed from
consideration.

2. What factors contribute to successful entrepreneurial activity in developing countries?

Entrepreneurship is influenced by four distinct factors: economic development, culture, technological


development and education. In areas where these factors are present, you can expect to see strong and
consistent entrepreneurial growth.

These conditions may have both positive and negative influences on the emergence of
entrepreneurship. Positive influences constitute facilitative and conducive conditions for the emergence
of entrepreneurship, whereas negative influences create inhibiting milieu to the emergence of
entrepreneurship.

Economic environment exercises the most direct and immediate influence on entrepreneurship. This is
likely because people become entrepreneurs due to necessity when there are no other jobs or because
of opportunity.

3. Are humankind’s economic policies sustainable over the next few centuries?

Sustainable Development (SD) has become a ubiquitous development paradigm—the catchphrase for
international aid agencies, the jargon of development planners, the theme of conferences and academic
papers, as well as the slogan of development and environmental activists (Ukaga, Maser, &
Reichenbach, 2011). The concept seems to have attracted the broad-based attention that other
development concept lack(ed), and appears poised to remain the pervasive development paradigm for a
long time (Scopelliti et al., 2018; Shepherd et al., 2016). However, notwithstanding its pervasiveness and
popularity, murmurs of disenchantment about the concept are rife as people continue to ask questions
about its meaning or definition and what it entails as well as implies for development theory and
practice, without clear answers forthcoming (Montaldo, 2013; Shahzalal & Hassan, 2019; Tolba, 1984).
SD therefore stands the risk of becoming a cliché like appropriate technology—a fashionable and
rhetoric phrase—to which everyone pays homage but nobody seems to define with precision and
exactitude (Mensah & Enu-Kwesi, 2018; Tolba, 1984).

4. What monetary and fiscal policies should a country use to achieve economic development
with price stability?

The usual goals of monetary policy are to achieve or maintain full employment, to achieve or maintain a
high rate of economic growth, and to stabilize prices and wages. ... The Fed uses three main instruments
in regulating the money supply: open-market operations, the discount rate, and reserve requirements.

The term “fiscal policy” applies to the use of public finance instruments to influence the working of the
economic system to maximize economic welfare. However, this is too vague a concept to be the focus of
specific policy measures. For this reason, policymakers concentrate on more specific objectives, such as
reduction of the rate of inflation, acceleration of the rate of growth, and redistribution of income. The
activities of the public finance authorities are generally classified under four broad functions: allocation
of resources, redistribution of income, stabilization of the economy, and the promotion of economic
growth.

5. How can LDCs export more and import less?

The LDC Package had been expected to become a very significant step towards better integration of
LDCs into the global economy and multilateral trading system. In the first decision, WTO members
reaffirmed their commitment to duty-free, quotafree (DFQF) market access for LDCs. Such market
access in principle would allow LDC imports to enter without paying tariffs. However, the actual value of
additional benefits that this confers remains questionable. Many developed countries have already
implemented duty-free access on 97 per cent of LDC export products, and the decision merely states
that countries not meeting this standard “shall seek to” improve the number of products covered. The
second decision was related to the adoption of guidelines on simpler Rules of Origin (RoO) for LDC
products. This issue was not part of original Doha mandate. The decision on DFQF and the simplification
of preferential RoO was taken at the Hong Kong Ministerial Conference in 2005. Studies have revealed
that origin certificates cost about 5 per cent of the goods’ value. Certain preferential trade agreements
are no longer used for preferential market access due to the high costs of issuance; importers prefer to
pay the most-favoured-nation (MFN) duty instead of requesting preferential treatment with submission
of proof of origin.

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