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    Direction: Read the given passage carefully and answer the questions that follow. Certain words/phrases are printed in bold to help you locate them while answering some of the questions.

    Small and medium-sized rural towns are an integral part of the local economic landscape. A significant and increasing proportion of the rural population lives in these locations, which also host a very large share of local non-farm activity (Satterthwaite and Tacoli, 2003b). The employment opportunities available in such locations and the standard of living of its population are therefore important dimensions of local economic development. In addition, much economic activity in small and medium-sized towns is closely interrelated to the surrounding village economy through consumption, production, employment and financial linkages, and various types of economic and social service provision. Hence, whilst an expansion of the small town economy is intimately dependent on development dynamics at village level, the reverse is also true. In other words, the nature and extent of economic linkages between rural towns and their hinterland, and between the former and the wider economy, constitute key factors shaping local development dynamics and potential. Hence, policies and interventions aimed at developing the local economy must account for existing patterns of interaction between the 3 villages and town economies, and seek to reinforce synergetic links and mitigate adverse impacts arising from resource flows and exchanges between both types of locations. Clearly, a neglect of the urban aspects of the local economy undermines its development potential. The view that the urban economy plays a parasitic or extractive role, based on unequal exchanges with rural areas supported by policies biased towards large urban centres, has been very influential in development thinking (see for example Lipton, 1977). However, since the late 1970s and early 1980s there has been a re-thinking of the nature and impact of rural-urban linkages, with much emphasis placed upon the mutual dependency of rural and urban areas, and the critical role of town and city networks in the process of regional and local economic development (see for example Satterthwaite and Tacoli, 2003a; Satterthwaite and Tacoli, 2003b; Kammeier, 2002; and Douglass, 1998). According to this perspective, the development of small and intermediate urban centres is intimately dependent on the growth, not stagnation, of the surrounding village economy. This growth translates into an increase in the demand for goods and services produced within towns, as well as an expansion of the village surplus available for processing and/or marketing in these centres. Consequently, an expansion of small and medium urban centres is regarded as a consequence of a dynamic rural economy, rather than a cause or byproduct of its under-development. The issue policy-makers need to address is how to promote the symbiotic development of the local village and town economies, rather than whether to prioritise the development of one at the expense of the other.

    According to the passage, on which of the following is the view that the urban economy plays a parasitic or extractive role based?
    1) Unequal exchanges with rural areas
    2) Loss in job opportunities
    3) Loss in technology opportunities

    Options :-

    1. Only 1
    2. 1 & 2
    3. Only 3
    4. 1 & 3
    5. All of these
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