Question

. A VERY BRIEF EXPLANATION ( FEW WORDS/1-2 LINES/RELEVANT GRAPH MUST BE PROVIDED FOR A TRUE (T) RESPONSE AS WELL.

(a) Legalizing all forms of illegal activities will have an effect on GDP and underground economy.

(b) “Star Wars: The Force Awakens broke all the records in terms of Gross earnings” But it was no “Gone with the Wind.

(c) Laissez Faire means “Let people do what they choose to do”. This means no role for government

(d) USA has the highest GDP in the world and therefore has the highest level of economic and social development.

Answer 1

1. All illegal monetary transactions are taking place in the underground economy such as smuggling, drugs dealing, traffic in humans beings, illegal gambling etc. These economic activities are undetected by the radar of government and these monetary transactions are not reflected in GDP. This sector is strong enough as the legalized sector. If this underground parallel economy is legalized all transaction in this sector will be included in the GDP measurement and we can see substantial increase in GDP of the economy.

2. Star War: The Force Awakens is the biggest box office record breaking film in U S which the nation have ever seen. It broke the record created by the Jurassic World of $208.8 million of opening weakened collection by gathering $247.9 million. But it could not break the gross earnings of ‘Gone with the Wind”. Gross inflation adjusted earning of ‘Gone with the Wind’ was $1,824,463,000 while the Star Wars: The Force Awakened gathered only $976,279, 300.

3. Laissez Fair is a French word meaning ‘let to do’ which is historically associated with Physiocrats during 18^th century. The classical economists were also strong supporters of this policy. The policy envisages non interference of the government in economic activity of the people. Leave and let alone the individual free in their economic matters is the basic idea behind this policy.

4. According to CIA Fact book report U S is the most economically powerful country in the world with precipitate GDP of $59,900 (2017 estimates). There is a close relation between the level of GDP and economic activity. Higher GDP is the result of higher level of economic activity. This higher level of GDP results in higher economic and social development.