IGCSE Development Studies: Specimen Questions with Answers 57 - 58 of 98

Passage

Balance of Trade

Question 57 (7 of 7 Based on Passage)

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Differentiate between BOP and BOT.

Explanation

Differentiate between BOP and BOT
S. no

BOT

BOP

1.

Transactions concerning trade of goods only are recorded.

All transactions concerning goods, services and capital transfers are recorded.

2.

Transactions of capital nature are not included in Balance of Trade

Transaction of capital nature is also recorded in balance of payment.

3.

Balance of Trade is a part of current account of balance of payment

BOP is much larger as it has current and capital accounts which include BOP too.

4.

When exports of goods are higher than the imports of goods, BOT is considered as favorable.

When net balance of current account is in plus. BOP is considered as favorable.

Passage

Understand by HDI

Question 58 (1 of 7 Based on Passage)

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Short Answer▾

State the importance of HDI.

Explanation

The HDI examines three important criteria of economic development- Life expectancy, education level and income level. The importance of Human Development Index is-

  • The HDI gives an overall index of economic development
  • It does give a rough ability to make comparisons on issues of economic welfare- much more than just using GDP statistics show.

  • It gives idea regarding areas of development which requires improvement.

  • Statistics gives better decision-making areas having wide disparity.

  • More focus on social & human development rather than only capital accumulation and growth.