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4.1.1 Name any TWO international benchmark criteria for regional development - NSC Economics - Question 4 - 2021 - Paper 1
Question 4
4.1.1 Name any TWO international benchmark criteria for regional development. 4.1.2 Why are liabilities added when calculating net direct investments in the financi... show full transcript
Worked Solution & Example Answer:4.1.1 Name any TWO international benchmark criteria for regional development - NSC Economics - Question 4 - 2021 - Paper 1
Step 1
Name any TWO international benchmark criteria for regional development.
Answer
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Free-market operation: This criterion emphasizes the need for an economic environment where businesses can operate without excessive government interference.
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Sustainability: This focuses on development that meets current needs without compromising the ability of future generations to meet their own needs.
Step 2
Why are liabilities added when calculating net direct investments in the financial account of the balance of payments?
Answer
Liabilities are added to the financial account because they represent a capital inflow or money flow from the foreign sector into the domestic economy. This inflow indicates external investments and financial contributions that support economic activities.