True false or uncertain? Why? The Rosenstein-Rodan theory of the ‘big-push’ emphasizes the importance of free...

True false or uncertain? Why?

The Rosenstein-Rodan theory of the ‘big-push’ emphasizes the importance of free markets in achieving an optimal level of private investment in developing countries.

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Expert Solution

First of all it is necessary to understand the meaning of big push propounded by Rosentein- Rodan. Thus, it is basically termed as the discontiuis or humps found in the econmy through which the development has to be puched forward to attain balance in growth. According to Rodan sprinling a liitle investment is not enough for the economy as it suggest to provide a substantial increase in the amount of investment. For this not only internal factors of the economy is sufficient but also the external factors like savings, capital etc. It also mainly focus on the factors of what the others firms are associated with and what they are upto. For example , there are two firms and if one firm lowers his amount of product to increase it's demand then it will impact the other firms supply production also.

Thus, it can be said that the statement given here is false as according to the theory it basicly focus on the activities of other firms also and not in the free market where every firm has it's distinct identity.

Rahul Sunny answered 1 year ago

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