What is the unbalanced development strategy and how does this strategy create forward and backward linkages into the economy?
The unbalanced development strategy is a growth strategy that relies on initial government investments that
are small in size and scope, but that will trigger new demands and new supplies in the economy. Production
projects emerge to satisfy these new demands, and their outputs make other previously unfeasible projects
feasible. A forward linkage occurs when investments in one industry create opportunities for profitable
investments in other industries that use the goods produced in the first as inputs. A backwards linkage
occurs when investments in one industry create demands for inputs that induce investment in other
industries to produce those inputs.
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Additions to inventory are
A) not counted as an expenditure in GDP accounting. B) counted as an intermediate input. C) counted as a component of investment spending. D) subtracted from sales revenue in calculating profit income.
By referencing events in the news or something from your personal experiences, describe one example of each of the five foundations of economics discussed in this chapter.
Five Foundations of Economics: Incentives Trade-offs Opportunity cost Marginal thinking The principle that trade creates value