IGCSE Development Studies: Specimen Questions with Answers 83 - 84 of 98

Passage

Millennium Development Goals

Question 83 (7 of 7 Based on Passage)

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How does education helps developing countries?

Explanation

Education plays an important role in the reduction of poverty as lack of education causes poverty and slow growth of the economy especially in the developing economies. Every boy or girl in a country should have all the rights to get education so that they have better opportunities in the future in terms of employment and health. Education is a form of investment in a country as it reaps huge benefits to a country. It guarantees income for life time.

Role of Education in the Development of an Economy Are

  • It boosts the GDP and growth of the economy.
  • Education reduces infant mortality rate and increases human life expectancy.
  • Promotes peace and decreases the drop outs rate from schools and colleges.
  • It helps in making right decisions at the right time.

Question 84

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What do you understand by External debt?

Explanation

External debt or external loan is the total amount which the residents of one country owe to the other the country. In other words, it is the outstanding amount of the principal amount along with the interest by the debtor to the creditor.

  • It is the borrowing from foreign lenders through government, commercial banks, or financial institution. IMF keeps a record of a country՚s debt whereas, World Bank publishes the quarterly report on debt of a country.
  • In case of nonpayment of debts, a country faces financial crisis known as sovereign debts, Lenders of fund can withhold the assets of the borrowing nation in such cases leading to a fall in the value of the currency of the borrowing nation having an adverse effect on the growth of the economy.

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