3.1.1 growing economies Flashcards
Why has WW2 changed global trade significantly?
It has increased trade massively, as it saw the rise of emerging markets in previously communist nations such as China.
Why has production of manufactured goods shifted to countries such as China
Countries such as the UK have been deindustrialised, and so has shifted.
What did India’s share of textiles and clothing fall from between 1995 and 2005?
From 35% to 16%.
What does India’s manufacturing sector seem to produce more of now?
More engineered goods than clothing + textiles, which has resulted in UK manufacturers selling fewer manufactured goods abroad.
What has happened to the balance of trade between the US and China since 2006?
The US trade deficit has narrowed, and China has reduce their trade surplus too.
What has China changed their export-led growth to?
They have planned the change to growth fuelled by domestic consumption.
What does India’s poor irrigation system result in?
It makes it difficult to sustain food grain production if there is low rainfall, hurting the poorest communities and leads to rising food prices.
What do regular power cuts in India result in?
The lack of a continuous supply of electricity affects transport, communication and healthcare.
How much money is estimated to need to be invested into Indian power to meet development goals?
$400 billion.
Who leads the Asian Infrastructure Investment Bank (AIIB)?
China.
What does the AIIB fund? [3]
Asian energy, transport and infrastructure.
Who are the founding members of the AIIB? [4]
- UK
- Germany
- Australia
- South Korea
What does the UK’s involvement in the making of the AIIB mean?
That they should give British firms an opportunity to invest in fast growing economies.
What is the top priority for the Chinese government?
Infrastructure development.
How many Chinese people benefited from improved power and telecommunications from late 1990s-2005? Why?
100 million.
Employment can be boosted with improved roads, railways and airport constructions.
What do economics argue is the cause for the development gap between China and other emerging economies?
Due to its focus on infrastructure projects, with China investing 9% of their GDP in infrastructure in the 1990s and 2000s, whilst most emerging economies only invested around 2-5%.
How much of China’s cumulative foreign aid did Africa receive by the end of 2009?
45.7%.
What is Africa’s saving rate compared to the average for middle income countries? What does this mean?
Africa’s is 17%, whilst others is 31%.
It makes it more expensive for the African public and private sectors to get funds since they have higher borrowing costs, hindering capital investment.
What accounts for just over 60% of South Africa’s exports? What relies on this?
Mining, and their ability to pay foreign debts and for imports relies on this.
What are the costs of economic growth for consumers? [3]
- Economic growth does not benefit everyone equally. Those on low + fixed incomes might feel worse off if there is high inflation and inequality could increase
- There is likely to be higher demand-pull inflation, due to higher levels of consumer spending
- The benefits of more consumption might not last after the first few units, due to the law of diminishing returns which states that the utility consumers derive from consuming a good diminishes as more of the good is consumed
What are the benefits of economic growth to consumers? [2]
- Average consumer income increases as more people are in employment and wages increase
- Consumers feel more confident in the economy which increases consumption and leads to higher living standards
What are the costs of economic growth to firms? [2]
- Could face more menu costs (expenses incurred when changing its prices such as printing new menus etc) as a result of higher inflation. This means they have to keep changing their prices to meet inflation
- Firms supplying inferior goods are likely to see a fall in sales
What are the benefits of economic growth to firms? [4]
- Might make more profits, which might in turn increase investment. This also driven by higher levels of confidence
- Higher levels of investment could develop new technologies to improve productivity and lower average costs in the long run
- As firms grow, they can take advantages of the benefits of economies of scale
- If there is more economic growth in export markets, firms might face more competition, which will make them more productive and efficient, but it will also give them more sales opportunities
What is the cost to the government of economic growth?
Might increase their spending on healthcare if consumption of demerit goods increases
