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Discussion

According to Leibenstein, the favourable conditions in the path of Economic Development are known as :

  • A.Positive factors
  • B.Incentives
  • C.Capital
  • D.Growth agents

Answer: D

Leibenstein called them growth agents.

In his critical minimum effort thesis, Harvey Leibenstein argued that an underdeveloped economy needs a big enough initial stimulus to escape the low-income equilibrium. He distinguished growth agents (such as entrepreneurs, investors and innovators, and the activities that expand output) from zero-sum and negative-sum activities that do not raise national income.

Incentives, capital and 'positive factors' are part of the discussion, but the named concept for the favourable forces is growth agents.

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