#1.3 : Solving Socioeconomic Problems with Applied Economics Flashcards
Difference of growth and development
Growth is quantitative (ex. GDP), while, development is qualitative (ex. quality of life).
It discusses the nature of development and describes tools and strategies that lead to development.
Theories of Economic Development
A factor that is measured by the GDP/GNP, and focuses on the material wealth.
Level of Production
A factor that considers the significant change in the citizens.
Quality of Life
A factor that considers the impact of human activities in the environment.
Sustainable Development
Underdevelopment is a combination of:
low production + low quality of life
Development is based on historical stages. (theory)
Linear Stages of Growth
Manufacturing sector is born to allocate resources. (theory)
Structural Change Model
Small countries being dependent to developed countries = underdevelopment. (theory)
International Dependence
Follows the idea of capitalism, and more freedom to business. (theory)
Neoclassical Theory
Improvement of technology = development. (theory)
New Growth Theory
One sector can affect the other sectors = underdevelopment.
Theory of Coordination Failure
Investment of human capital (skilled w/ high wages) = development. (theory)
O-Ring Theory
Refers to population is only able to meet its basic subsistence needs (food, clothing, and shelter)
Poverty
Refers to unequal access to wealth and income
Inequality
Refers to the severe deprivation of basic human needs.
Absolute Poverty
Refers to the portion of the labor force who is willing to engage in productive activities yet fails to do so.
Unemployment
4 types of unemployment
frictional, cyclical, seasonal, and structural
State of an individual being employed but his/her talents and expertise are underutilized or are not matched to the job.
Underemployment
2 types of underemployment
visible and invisible
Sustained and continual increase in the prices of goods and services.
Inflation
2 types of inflation
hyperinflation and stagflation
labor force who are willing and able to work, and are awaiting deployment
Labor Supply
total available job vacancies from previous cycle or year up to the present
Labor Demand
Refers to the payments made in exchange for the time and effort exerted or given by an individual who was able to produce a good or service
Wages
supply increase + demand constant = wage _____
decrease
supply decrease + demand constant = wage _____
increase
supply constant + demand increase = wage _____
increase
supply constant + demand decrease = wage _____
decrease
unemployment and minimum wage = wage _____
increase
It is the conversion of a urrency into an international currency (i.e. Philippine peso to U.S. dollar).
Foreign exchange
Labor migration in a way helped our problems of ___________, as opportunities to work abroad provided jobs for Filipinos and also boosted our economy through their remittances.
unemployment
OFWs help in the economy using _______.
remittances
